The Tasmanian Government is stumping up money for rail and keeping open Hobart's Macquarie Wharf for wood exports after a report found there was "no silver bullet" for Tasmania's southern forest residues issue.

Key points: Report finds no easy answer for wood product residues in state's south

Report finds no easy answer for wood product residues in state's south Hobart port identified as only viable deep water port in the region

Hobart port identified as only viable deep water port in the region Calls for log truck and heavy freight movements to be reduced on public roads in favour of rail

Tasmania has not had a long-term, viable option for hundreds of thousands of tonnes of southern wood waste and logs since the Triabunna woodchip mill closed in 2011.

The state Liberals came to power in 2014, vowing to rebuild the forest industry and stop subsidies.

Initially, the Government subsidised the forest residues being transported north to Bell Bay, but later awarded a five-year contract to Majestic Timber to export logs from Hobart using a Federal Government container subsidy.

Majestic Timber stopped exporting last year when Swire Shipping pulled out of Tasmania.

Another business, Southwood Fibre, abandoned its plans for a woodchip export facility south of Dover last year.

Now, a government-commissioned report by Evan Rolley, the chairman of Private Forests Tasmania, has found there is "no silver bullet" for southern residues.

Mr Rolley found the most suitable port for export of forest products, excluding woodchips, was Hobart and that upgraded rail would be key to move residue pulp logs for processing for woodchip markets.

In response to the report, Resources Minister Sarah Courtney said the Government would keep Hobart's Macquarie Wharf open for containerised and break-bulk exports, but not for woodchips.

"It has been made very clear to me that a range of companies across Tasmania will invest further if they have access to this port," Ms Courtney said.

Ms Courtney said the state and federal governments were committing $2 million for a new TasRail loading facility at Parattah, near Oatlands, and freight wagons at Brighton to provide a link to Bell Bay.

Of that, $1.6 million is from state coffers.

"It will allow participants to be able to get their wood products to the north of the state more cheaply, via accessing rail, and this is a great alternative to be able to get log trucks off the road," the Minister said.

Not much of an option: White

Residues from Tasmania's southern forests have been a contentious issue since the closure of the Triabunna woodchip mill. ( ABC News: Gregor Salmon )

Greens Leader Cassy O'Connor said the total cost to TasRail was not clear.

"She's confirmed that taxpayers' money will be used to subsidise the transport and export of wood products out of the south of the state," Ms O'Connor said.

"And it's our understanding Macquarie Wharf was only ever intended to be a temporary solution for the export of wood products out of the south, that's why they commissioned Evan Rolley."

Opposition Leader Rebecca White said the Government had no solution to challenges in the forest industry, despite vowing to fix the southern residues problem when first coming to power.

"This isn't much of a solution given that the magic wand the government said they could wave five years ago has resulted in little more than a bit of puff," Ms White said.

Ms White said the Government should be focusing on local processing options.

"It's not good enough for the government to think that a solution is to export this product," she said.

The Premier is currently on a trade mission to Japan, with forestry stakeholders.

Concerns over more truck movements

Mr Rolley's report recommended a $38 million upgrade of the Plenty Link Road between the Huon and Derwent valleys for a "private freight route", including a single lane "freight only" bridge over the Derwent River.

It also called for a northern roadway access from the Domain to the Macquarie port berths to reduce truck movements, and a Government spokesman said that was under consideration.

Ms White said extra freight trips to the port, which is right next to the Macquarie Point redevelopment, would be worrying.

"We've seen no solution from the Government with how to tackle traffic congestion and now they're talking about adding more truck movements to that — I think a lot of people would be wondering about what the Government's priorities are here," she said.

Heater pellet mill on hold

The Southwood site is out of action because of damaged caused by January's bushfires. ( Supplied: The Mercury )

The company that abandoned plans for a southern woodchip facility has proposed another residues solution, but those plans may have been affected by bushfires.

Neville Smith Forest Products (NSFP), which owns Southwood Fibre, had proposed to build a $25 million mill to turn forestry residues into heater pellets.

But the Riveaux Road fire has put the Southwood site at Lonnavale out of action temporarily, with no power and the Ta Ann section of the site damaged.

NSFP spokesman Andrew Walker said the company was still looking into the idea.

"We're still conducting feasibility on that project, particularly on the back of the bushfires we're looking at all ways to utilise that resource," he said.