On Island Processing Program
The Tasmanian Government has committed a total of $15 million the On-Island Processing Program (the Program) to grow the Tasmanian forestry sector’s on‑island processing capabilities. The first round of the Program was launched in 2021, which funded seven projects.
The 2025 Round 2 of the Program commits $8 million of grant funding to four projects across the state to unlock more than $50 million in private investment in modern processing and production facilities.
These projects will grow Tasmania’s on-island processing capabilities, increase the value of Tasmanian wood, expand the state’s sovereign capabilities, reduce the need for imported forest-based products, and create employment opportunities.
A particular focus of Round 2 is increasing the value of Tasmania’s new plantation hardwood resource as it enters the supply chain in increasing volumes.
Successful projects (Round 2)
Recipient | Project | Funding Amount |
|---|---|---|
Britton Brothers | Retooling and processing expansion to transition from the existing native hardwood resource to plantation timbers including investment in new drying and steaming technology, a new processing line for sawn timber and a laminating press for increased recovery. | $2 million |
Forico | Construction of a new and modern sawmill for processing hardwood plantation logs, primarily for pallet grade sawn timber. This is a value-add project for a resource that is currently exported from Tasmania as either woodchips or whole round logs. | $2 million |
Neville Smith Forest Products | The addition of specialised small log processing equipment to facilitate the processing of smaller diameter plantation logs which will create significant opportunities for southern Tasmanian plantation growers, converting pulpwood to a higher value fully manufactured pallet. | $2 million |
Western Junction Sawmill | Installation of an automated continuous laminating line to produce solid timber panels, staircase components and mid-sized sections of glue laminated hardwood utilising plantation Eucalyptus nitens (shining gum). | $2 million |
Contact
Any queries can be directed to the Resources Policy Branch via email: forests@stategrowth.tas.gov.au.
Links
Frequently Asked Questions
Does the Department provide a business case template for applications?
We have not provided a standard template for a Business Case for the OIPP2 as the information can vary depending on the nature and complexity of each project. The information you provide must be sufficient to meet the requirements of the guidelines, including supporting your claims of project viability.
How will Right to Information requests be handled for the OIPP2
The Program Guidelines state “Information provided to State Growth may be subject to disclosure in accordance with the Right to Information Act 2009 (the Act)”. Each right to information request (and any related relevant information which is located in our records) is assessed by an independent delegate, who determines whether information is to be released or whether it can be exempt. If information about a business is located, in response to a request under the Right to Information Act 2009, the Act contains a requirement to consult with third party businesses if information about their business affairs is considered for release. This means under the Act a business which has applied for the OIPP2 would have an opportunity to comment on the release or withholding of their business information. While the final decision is yours as to the information you provide, applicants should closely read the program information and guidelines (at https://www.stategrowth.tas.gov.au/oipp2) to ensure all requirements are fully met for their project and the grant application.
The Act can be found at the link below for reference.
https://www.legislation.tas.gov.au/view/html/inforce/current/act-2009-070
What is the Assessment Process
The Program Guidelines specify the full assessment process:
Broadly, applications that meet the eligibility criteria will initially be assessed by a departmental assessment team, including a financial assessment, then forwarded to an assessment panel for final evaluation. The panel will consist of representatives from:
- Department of State Growth
- University of Tasmania
- An Independent expert with industry and subject matter expertise
The assessment panel will establish a merit list based on the assessment criteria. The panel will recommend funding for projects from this merit list.
Can a biomass to energy project be considered under the OIPP2
It may be possible for a biomass to energy project to be considered under the program if it meets all requirements of the guidelines.
Applicants should closely read the program information and guidelines (at https://www.stategrowth.tas.gov.au/oipp2) to determine if their particular project and feedstock would meet all program requirements.
Can the applicant’s required project funding contribution consist of in-kind expenses such as staff salaries?
It is intended that the applicant contribution be a financial contribution, not in-kind.
However, if a proportion of an employee’s salary and statutory payments is paid direct from the “project” it could meet the requirement. The Department and assessment panel would need to see the direct connection between the “employee earnings” and the project.
To show this connection for such costs to be considered, the applicant must clearly demonstrate in the application that the proposed expenditure is additional project expenditure that would not have been incurred without the project – for example a new employee to be engaged the manage the project.
When does the Program close for applications
Applications will close on Thursday, 31 July 2025 at 10.00am.
Any applications received after this time will not be accepted.
Does the Department have a preferred format in relation to the volume of feedstock
The Department does not have a preferred format, applicants can provide whichever option they consider most suitable – for example m3.
Where necessary the assessment panel will determine an appropriate conversion factor.
Is Sustainable Timber Tasmania on the Assessment Panel
STT is not involved in the administration of this grant. Information is sought in the application to address the assessment criteria.