B.C. introduces innovative, flexible forest licence

October 28, 2014, Victoria, B.C. – The B.C. government has
created a new type of forest licence that allows emerging, innovative forestry
companies to more effectively respond to fluctuations in the supply of wood
fibre.

The new supplemental forest licence allows companies to
harvest wood only when traditional, business-to-business fibre supplies are
reduced. This helps ensure that licence holders – bioenergy companies, pellet
producers and secondary manufacturers – have ongoing access to the fibre supply
they need to operate.

“The supplemental forest licence is an innovative approach
that will help small forestry companies be more responsive to the day-to-day
demands of the industry,” says Forests, Lands and Natural Resource Operations
Minister Steve Thomson. “It's part of our ongoing strategy to be more flexible
as we help B.C.’s Interior weather the impacts of the mountain pine beetle
infestation.”

The new licence also allows the Province to include
conditions in licences that encourage the harvesting of less marketable and
harder to access wood, helping to make greater use of the existing allowable
annual cut.

“The new licence gives companies in B.C. a flexible option
that allows them to address temporary supply shortages,” says Gord Murray,
Executive Director of the Wood Pellet Association of Canada. “This is critical
for an industry like ours, which has to respond to an ever-growing global
market quickly, effectively and reliably. Greater certainty gives us more
confidence as we move forward and promote the role of wood pellets in the
Canadian and global markets.”

The legislation follows up on a recommendation made by the
Special Committee on Timber Supply in its 2012 report, and is consistent with
strategies identified in the Province's 2012 Mid-Term Timber Supply Action
Plan.

The new licence is not available to sawmills, which
traditionally have more stable supplies of wood.