Independent Forestry Services Ltd, NZ Emissions Trading Scheme


Home \| About Us \| New Zealand Forestry Investment \| Forestry Establishment \| Forestry Tending \| Forest Harvesting \| Forest Consulting \| Forest Mapping \| Carbon Consulting \| IFS Redwoods \| Contact IFS \| Resources/Links \| carbon credit trading \| how to earn carbon credits from your land \| NZ Emissions Trading Scheme \| New Zealand Emissions Trading Scheme (NZ-ETS) The government has announced the introduction of the New Zealand Emissions Trading Scheme which was implemented from 1 January 2008. Business' will have an obligation to hold emission units that match their total emissions. The NZ-ETS will involve the devolution to land owners of both the credits and liabilities for forestry. Forestry in a New Zealand Emissions Trading Scheme After consultation the government has agreed in principle that it must encourage the planting of forests and the development of forest sinks. It will do this through the Emissions Trading Scheme (NZ-ETS), the Afforestation Grant Scheme (AGS) and the Permanent Forest Sink Initiative (PFSI). New Zealand Emissions Trading Scheme (NZ-ETS) The forest industry will be able to participate in the NZ-ETS from 1 January 2008. Under the NZ-ETS, forestry land owners will be able to gain credits and associated liabilities for post-1989 forest that leads to the removal from the atmosphere of the main green house gas, carbon dioxide. In line with the Kyoto Protocol NZ-ETS rules will vary according to when a particular forest was planted. -Pre-1990 Forest Forest that already existed before the end of 1989 (pre-1990 forest) will not earn credits, but if it is deforested (the land converted to another use like agriculture) after 1 January 2008 its owners will be liable for the carbon dioxide emitted. However, if the forest is harvested then replanted it will not incur any liabilities. There are exemptions for forests under 50ha and weed control. The government will assist owners of pre-1990 forests who are affected by these provisions by issuing them with free credits, these are called New Zealand Units (NZUs). NZUs will be the units traded in the New Zealand Emissions Trading Scheme. If you continue to keep the land in forest these NZUs (valued at around $720/ha to $1200/ha depending on when the land was purchased) will be a windfall. But if you decide to deforest the land the recompense is relatively small. Indigenous (native) forests established before 1990 will not be included in the NZ-ETS. -Post-1989 Forest Owners of land that became forest after the beginning of 1990 (post 1989 forest) can choose to join the NZ-ETS, and can apply from 1 January 2008. They will gain credits and the associated liabilities. Participants will be entitled to receive one NZU for each tonne of carbon dioxide stored in their forest. Obligations for liabilities and credits will rest with the landowner or, where a forestry right or registered lease is involved, with the holder of that right or lease. Those who choose to join will have to submit a carbon stock assessment at their own cost at the end of the period 2008-12 and perhaps on an annual basis during that period. Any carbon stock changes, e.g. harvesting, during this period will need to be reported to the administering agency. The Permanent Forest Sink Initiative (PFSI) Landowners will be able to earn Kyoto Protocol AAUs (as opposed to NZUs) for permanent forests established post-1989. These AAUs can be claimed and transferred throughout the period 2008-2012. All eligible post-1989 forests exotic and native can participate. 99 year covenants protecting a baseline carbon stock are required to be signed. PFSI participants can terminate their covenants after 50 years if they choose. However all units are to be repaid and any associated liabilities or costs met. Afforestation Grant Scheme (AGS) Under the AGS foresters can receive a government grant for the planting of new forests on previously unforested Kyoto compliant land (land that was unforested as of 31 December 1989). Participants will own the new forests and earn income from the timber while the Crown will retain all credits and liabilities. Initially AGS grants will generally be made through a competitive tendering process. Investment Opportunities Carbon trading will provide an additional income stream for forestry investors. Under the governments climate change programme forestry investors have multiple options for extra income including entering the NZ-ETS, the Permanent Forest Sink Initiative or the Afforestation Grant Scheme. Contact IFS to investigate these opportunities.

New Zealand Emissions Trading Scheme (NZ-ETS)

The government has announced the introduction of the New Zealand Emissions Trading Scheme which was implemented from 1 January 2008. Business' will have an obligation to hold emission units that match their total emissions. The NZ-ETS will involve the devolution to land owners of both the credits and liabilities for forestry.

Forestry in a New Zealand Emissions Trading Scheme

After consultation the government has agreed in principle that it must encourage the planting of forests and the development of forest sinks. It will do this through the Emissions Trading Scheme (NZ-ETS), the Afforestation Grant Scheme (AGS) and the Permanent Forest Sink Initiative (PFSI).

New Zealand Emissions Trading Scheme (NZ-ETS)

The forest industry will be able to participate in the NZ-ETS from 1 January 2008. Under the NZ-ETS, forestry land owners will be able to gain credits and associated liabilities for post-1989 forest that leads to the removal from the atmosphere of the main green house gas, carbon dioxide.

In line with the Kyoto Protocol NZ-ETS rules will vary according to when a particular forest was planted.

-Pre-1990 Forest

Forest that already existed before the end of 1989 (pre-1990 forest) will not earn credits, but if it is deforested (the land converted to another use like agriculture) after 1 January 2008 its owners will be liable for the carbon dioxide emitted. However, if the forest is harvested then replanted it will not incur any liabilities. There are exemptions for forests under 50ha and weed control.

The government will assist owners of pre-1990 forests who are affected by these provisions by issuing them with free credits, these are called New Zealand Units (NZUs). NZUs will be the units traded in the New Zealand Emissions Trading Scheme. If you continue to keep the land in forest these NZUs (valued at around $720/ha to $1200/ha depending on when the land was purchased) will be a windfall. But if you decide to deforest the land the recompense is relatively small.

Indigenous (native) forests established before 1990 will not be included in the NZ-ETS.

-Post-1989 Forest

Owners of land that became forest after the beginning of 1990 (post 1989 forest) can choose to join the NZ-ETS, and can apply from 1 January 2008. They will gain credits and the associated liabilities.

Participants will be entitled to receive one NZU for each tonne of carbon dioxide stored in their forest.

Obligations for liabilities and credits will rest with the landowner or, where a forestry right or registered lease is involved, with the holder of that right or lease. Those who choose to join will have to submit a carbon stock assessment at their own cost at the end of the period 2008-12 and perhaps on an annual basis during that period. Any carbon stock changes, e.g. harvesting, during this period will need to be reported to the administering agency.

The Permanent Forest Sink Initiative (PFSI)

Landowners will be able to earn Kyoto Protocol AAUs (as opposed to NZUs) for permanent forests established post-1989. These AAUs can be claimed and transferred throughout the period 2008-2012.

All eligible post-1989 forests exotic and native can participate.

99 year covenants protecting a baseline carbon stock are required to be signed. PFSI participants can terminate their covenants after 50 years if they choose. However all units are to be repaid and any associated liabilities or costs met.

Afforestation Grant Scheme (AGS)

Under the AGS foresters can receive a government grant for the planting of new forests on previously unforested Kyoto compliant land (land that was unforested as of 31 December 1989). Participants will own the new forests and earn income from the timber while the Crown will retain all credits and liabilities.

Initially AGS grants will generally be made through a competitive tendering process.

Investment Opportunities

Carbon trading will provide an additional income stream for forestry investors. Under the governments climate change programme forestry investors have multiple options for extra income including entering the NZ-ETS, the Permanent Forest Sink Initiative or the Afforestation Grant Scheme. Contact IFS to investigate these opportunities.