Stump-to-pump strategy aims to make use of the fact that sawdust and forest residues could generate "about 10% of our crude oil requirements".
Manufacturing sector staff cuts will be even higher if the government takes the purist approach turged by opponents.
Currency intervention as advocated by a business group and opposition parties would cut New Zealand living standards, the government says.
The newsprint producer has confirmed it is halving capacity at its Tasman mill in Kawerau.
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