The longer term future of forestry in the states is unclear, with millions of hectares burnt out this summer.

In East Gippsland, it is feared up to 40 per cent of the state forest allocated to be harvested had been destroyed.

The chip stack at the woodchip mill in Eden on the NSW Far South Coast has been on fire for at least 10 days, with NSW Fire and Rescue crews and Australian Defence Force personnel still working to get the blaze under control.

Prime Minister Scott Morrison will announce a support package for businesses impacted by fires on Thursday.

But Professor David Lindenmayer from the Australian National University's Fenner School of Environment and Society said these areas should use the fires as a trigger to transition away from logging.

"The extent of the areas burnt that were planned for logging has been so substantial, that really there is no alternative but to transition out of those industries almost directly," Professor Lindenmayer said.

"There is no resource left to run the industry. The Eden woodchip mill has been burnt, so the outlet for those resources from north-eastern Victoria and south-eastern NSW is basically gone.

"What happens is there needs to be an economic restructure package to basically help move those people out of the industry, and fast, because there's no resource left."

Professor Lindenmayer said reviews had demonstrated logging operations made so-called "wet" forests more likely to burn with higher severity fires.

"That effect lasts for about 40 years after the fire," he said.

"The bottom line there is that we should not be logging anywhere near anywhere near any of these regional towns."

Professor Lindenmayer also said the logging industry was "uneconomic".

"In Victoria, 87 per cent of all the native forest logging that's done in Victoria goes to the woodchip and paper pulp stream and it loses significant amounts of money for the state every year so East Gippsland's logging operations lose more than $10 million every year for the state of Victoria," Professor Lindenmayer said.

Instead, logging forests should become carbon sinks, Professor Lindenmayer argued.

In 2017, researchers estimated the carbon sequestration potential of native forests in Victoria's Central Highlands could be worth $49 million, compared to $12 million for native timber production and $30 million for plantation timber.

"What Australian forests are really good at doing is storing very large amounts of carbon and so in a carbon constrained economy, where we want to make a serious difference tackling climate change by storing large amounts of carbon, our forests become really important carbon stores," he said.

"And because of the huge demand from around the world for safe carbon stores, then clearly Australia is the place to go to do that."

But Mr Morrison said the business support package would be driven by what local communities required.

"They know their towns, they know their economic futures and the sort of things you're talking about [carbon sinks] I don't think would be a stranger to their considerations. But we're going to take our lead from the local communities about how they want to rebuild," Mr Morrison said on Wednesday.