The battle lines for a renewal of the logging wars in south east New South Wales are being drawn as environmental groups dispute the State Government's commitment to protecting newly-created flora reserves.

The Mumbulla, Murrah, and Tanja State Forests and half of the Bermagui State Forests have been gazetted as Flora Reserves, protecting koalas in those areas from logging, and putting the forests under management of the National Parks and Wildlife Service (NPWS).

But Noel Plumb, convenor of the South East Forest Alliance (SEFA) said the forests should have been gazetted as national parks.

"The government has delivered flora reserves to keep open the option of logging."

Member for Bega, Andrew Constance confirmed that possibility.

"In the future, depending on circumstance, ultimately that could occur," he said.

He said NPWS was monitoring "what is a very, very small population of koalas, based on the advice that's been given to government, and hopefully protect those koalas."

However, Mr Plumb said these management arrangements were only as good as the political will of the day.

"We simply don't think this is appropriate for genuine long-term protection."

Concern that other state forests to be logged more

With Forestry Corporation locked into timber supply contracts under 20-year Regional Forest Agreements (RFA), the ban on logging in the newly created flora reserves has raised the prospect of more intensive logging in other state forests to take the volume of timber that would otherwise be taken from the newly created flora reserves.

That is a prospect that Mr Plumb is strong opposed to.

"To imagine they're going to intensify the logging in these areas is outrageous," Mr Plumb said.

However, Forestry Corporation's Manager of Hardwood Forests, Dean Anderson, denied there would be an intensification of logging.

Mr Anderson said they would have harvested 40,000 cubic metres of sawlog timber and 10,000 tonnes of pulpwood timber per year from the areas now gazetted as Flora Reserves.

They will now harvest that timber from state forests further north around Narooma and Batemans Bay, part of a Forestry area that extends to south of Sydney.

Map of the Murrah Flora Reserves ( NSW Office of Environment and Heritage )

However, Mr Anderson said over the last 10 years in that area there had been a cumulative undercut of 90,000 cubic metres of sawlog timber as measured against the RFA quota, while pulpwood timber has dropped from 100,000 tonnes per annum to 35,000.

"So there's plenty of headroom," Mr Anderson said.

Grant to subsidise additional transport costs

It will cost more for Forestry Corporation to transport the timber the greater distance south to the Eden mills so it will receive a Environmental Trust grant to off-set additional costs.

Far South Coast National Parks Association president, Dave Gallan, said there was "something rather perverse about using Environmental Trust money to subsidise fuel for log trucks".

However, Andrew Constance justified the $2.5m grant as a "balanced approach…which secures timber jobs in Eden and at the same time puts environmental protections in place".

SEFA's Noel Plumb called the grant amount "outrageous" and "not necessary" as it would have "simply been an option for the government to buy out part of the quota".

End of forest agreements 'a circuit breaker'

"The announcement [of the flora reserves] could have been one of great significance if it had heralded the end of logging in native forests," Mr Gallan from the NPA said.

"With the coming expiration of Regional Forest Agreements (RFAs) it is time to start the transition of native forests from an extraction industry into a more ecologically sound reserve for wildlife and carbon storage."

Protesters block the road to the Eden woodchip mill in the early 1990s. The conflict led to the creation of the South East Forests National Park and 20 year Regional Forest Agreements. ( David Gallan )

However, Mr Constance said that the government's position was to see a continuation of the Wood Supply Agreements after the Eden region RFA expires in 2019.

"I'd like to see them enhanced if we can. The [flora reserve] arrangement … shows that the government is willing to find win-wins in all of this.

"We're very keen to make sure that the mills in the region, particularly at Narooma and Eden, thrive and survive into the future. I want to continue to see jobs being provided through this industry for the region."

Kel Henry, general manager of the Eden chipmill, the pulpwood customer at the centre of the logging conflict, said he was confident that future arrangements would not be dissimilar to what was in place now.

However, the chipmill changed hands in December 2015, and the new company, Allied Natural Wood Exports, had a "marketing direction that is completely different'.

Mr Henry said in the medium to long term they would be looking to source their supply from plantations rather than from native forests.