Information document: New Zealand Emissions Trading Scheme Draft Forestry Allocation Plan and Deforestation Exemption Policies for Pre-1990 Forest Land
Background
Forestry in the NZ ETS
The NZ ETS is New Zealand’s main price-based means of reducing greenhouse gas emissions and encouraging forest carbon sinks. Forestry is New Zealand’s largest potential carbon sink.
The NZ ETS has now commenced with the forestry sector being subject to the Act from 1 January 2008.
The Kyoto Protocol creates a distinction between forests established before and after 1 January 1990. The NZ ETS maintains that distinction and therefore includes different rules for pre-1990 and post-1989 forest.
Pre-1990 forests:
Deforestation of more than 2 ha of any pre-1990 forest land in the 5 year period between 1 January 2008 and 31 December 2012 (and any subsequent 5 year period) is automatically included in the NZ ETS, unless an exemption is obtained. In most cases, landowners are responsible for any emissions that occur as a result of the conversion of forested land to non-forest uses, such as farmland.
Pre-1990 forest landowners will not be responsible for the emissions that occur when a forest is harvested and then replanted or allowed to regenerate. Similarly, they will not be eligible to receive credits if they increase the levels of carbon stored in their forests. They will however be eligible to apply for an allocation of NZUs free of charge, as explained later in this document.
Note that the term ”Pre-1990 forest land” specifically relates to exotic forest species only. Unlike post-1989 forest land, indigenous species are not included under this definition, therefore if you are an owner of indigenous forest, you are not eligible to apply for either an exemption or allocation under the legislation or the Forestry Allocation Plan process.
Post-1989 forests (exotic and indigenous):
Owners of land that became forest on or after 1 January 1990 (known as post-1989 forest land) can join the NZ ETS if they wish, and will gain credits and incur liabilities for carbon changes in their forests. This applies to both exotic and indigenous post-1989 forest land. Where they choose to join, landowners will be entitled to receive one NZU for each tonne of carbon dioxide built up in their forests after 1 January 2008, and in turn will be required to surrender a unit for each tonne released when harvesting or as a result of any event such as fire or windthrow. The NZ ETS (like the Kyoto Protocol) does not recognise carbon stock increases or decreases that occurred prior to 1 January 2008 (the start of the Kyoto Protocol’s first commitment period).
Where post-1989 forest landowners choose not to join the NZ ETS, the Crown will retain all credits and liabilities for these forests, including for deforestation.
Unlike pre-1990 forest landowners, these post-1989 forests are not eligible to receive a free allocation of NZUs. This is because, unlike pre-1990 forests, participation is voluntary, and they are able to earn NZUs for carbon stock increases.
Contact for Enquiries
Emissions Trading Scheme
Ministry of Agriculture and Forestry
PO Box 1127
Wellington
Or call us on 0800 CLIMATE (254 628)
