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Forestry Programmes Decision Flowchart

25 February 2008
Based on the Climate Change (Emissions Trading and Renewable Preference) Bill 187-1

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Note: The New Zealand Emissions Trading Scheme (NZ ETS) depends on legislation that is currently before the Finance and Expenditure Select Committee being passed. The other schemes outlined above - the Afforestation Grants Scheme (AGS), Permanent Forest Sink Initiative (PFSI) and the East Coast Forestry Programme (ECFP) - are all operational.
Details of these schemes are provided below.

¹ Put simply, a forest is defined as greater than 1ha in area, greater than 30m wide, 30% tree canopy cover per ha and with the potential to grow 5m in height at maturity in situ.

Key Features

NZ ETS Pre-1990 Forest

(does not currently include indigenous forests)

• Obligation to surrender NZUs if deforesting more than 2ha of non-exempt pre-1990 forest over the period 2008-2012.
• No obligations to surrender NZUs if harvesting and replanting or allowing forest to regenerate.
• Opportunity to apply for one-off free allocation of NZUs.
• No NZUs earned for carbon sequestration/tree growth.
• Opportunity to apply for exemption from NZ ETS if less than 50ha total pre-1990 forest holdings on 1 September 2007.
• Exemption runs with land.
• Opportunity to apply for exemption from NZ ETS obligations if deforesting weed trees.

NZ ETS Post-1989 Forest

(exotic and indigenous forests)

• Voluntary participation in the NZ ETS.
• Participants have obligations to surrender NZUs for decreases in carbon stored in the forest (e.g. from harvesting, deforestation and fire). However, liability will not exceed NZUs earned.
• NZUs earned for forest growth from 2008.
• No NZUs for forest growth from 1990 - 2008.
• Can exit NZ ETS at any time if NZUs are repaid.
• Eligible for ECFP at reduced grant rate.
• If not in NZ ETS - no liability for harvesting or deforestation.
• Participation will transfer with the sale of the land or forestry right.

PFSI (Permanent Forest Sink Initiative)

• Can earn Kyoto Protocol assigned amount units (AAUs).
• Covenant registered against land title.
• Limited harvesting allowed.
• Liabilities for deforestation.
• Option to exit after 50 years provided units repaid.
• Eligible for ECFP (grant rate not reduced)
• Can transfer to NZ ETS as post-1989 forest within 18 months of NZ ETS legislation becoming law.

AGS (Afforestation Grant Scheme)

• Government grant to establish new forests.
• Government retains responsibility for credits and liabilities.
• No harvesting restrictions.
• Forest must be maintained for at least 10 years.
• Not eligible for ECFP, NZ ETS or PFSI on the same area of land.
• Minimum area 5ha

ECFP (East Coast Forestry Project)

• Government grant for soil conservation on North Island East Coast region only.
• ECFP grant recipients may participate in the PFSI with no change in their grant.
• ECFP grant recipients may participate in the NZ ETS but the grant will be adjusted.
• 50 year covenants registered against title.

Contact for Enquiries

Sustainable Land Management and Climate Change
MAF
Pastoral House
25 The Terrace
PO Box 2526, Wellington
Tel: 0800 CLIMATE (254 628)
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