Issue 5 - 14 October 2008
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Forestry in a New Zealand Emissions Trading Scheme: an update
The Climate Change Response (Emissions Trading) Amendment Act 2008 received the Royal Assent on 25 September 2008. This means that the New Zealand Emissions Trading Scheme (ETS) is now live. The new legislation amends the Climate Change Response Act 2002 (which is the principal piece of legislation).
Forestry is the first sector to enter the scheme (effective 1 January 2008) because it plays a core role in managing New Zealand’s carbon footprint.
Under the legislation:
• Forest landowners who deforest pre-1990 forest land any time from 1 January 2008 incur emissions liabilities
• New Zealand Units (NZUs) can be earned for net increases in carbon stocks in post-1989 forest land from 1 January 2008, at a rate of one NZU per one tonne of carbon dioxide.
Key points of the scheme
Forest landowners and certain other persons will either automatically or may voluntarily become participants in the ETS depending on:
• the date the forest was established
• the type of forest owned, leased, or held under a forestry right
• whether there has been any deforestation.
Forest land is defined as being at least one hectare with forest species that have, or are likely to have at maturity:
• a crown cover of more than 30 percent on each hectare
• a crown cover with an average width of at least 30 metres.
Forest species are tree species capable of reaching at least five metres in height at maturity in the place they are growing.
There are two forest classifications: pre-1990 forest and post-1989 forest.
Pre-1990 forest land is land that contained predominantly exotic forest species on 31 December 1989 and 31 December 2007. Pre-1990 forest landowners may apply to be allocated NZUs under the Forestry Allocation Plan (see ‘Draft Forestry Allocation Plan released for consultation’ below).
Some pre-1990 forest may be eligible for exemption from the ETS if the land holding is less than 50 hectares of pre-1990 forest land or includes deforestation of tree weeds. However exempt pre-1990 forest land will not be eligible for an allocation of NZUs. Exemptions are not automatic and must be applied for.
Indigenous forests established before 1 January 1990 are not included in the ETS. Owners of these forests have no liabilities under the ETS, even if they deforest. Equally, they are not entitled to an allocation of NZUs.
Post-1989 forest land is land that contained exotic or indigenous forests established after 31 December 1989 on non-forest land. Post-1989 forest landowners and certain other persons can choose to enter the ETS. If they do, they become Participants and are entitled to receive NZUs for net increases in carbon sequestered in their forests as they grow. Participants may choose to register part or all of their forest area in the ETS, at their discretion. Additional forest areas can be added at any time.
As part of their obligations under the ETS, post-1989 forest landowners will be required to report to MAF at least once every five years on the change in the amount of carbon stored in their registered forest area. If the net carbon stored in their forest falls (for example, due to harvesting), they may be required to surrender any units previously allocated to them.
Essential information
MAF has launched new web pages specifically for Sustainable Forestry and the ETS (Forestry): www.maf.govt.nz/sustainable-forestry.
These pages contain information about the forestry sector’s involvement in the scheme, including:
"A Guide to Forestry in the Emissions Trading Scheme "
This is a comprehensive booklet detailing how the ETS applies to the forestry sector. It includes information on forest classification, carbon sequestration, carbon measurement approaches, allocation of New Zealand Units, deforestation issues and tax treatment. Hard copies of this guide can also be obtained by calling 0800 CLIMATE (254 628).
"Tools and information "
A webpage devoted to tools and information around the ETS (Forestry) and other sustainable forestry initiatives including the Climate Change (Forestry Sector) Regulations 2008, fact sheets, carbon sequestration rates, measurement information, key dates and frequently asked questions.
Additional guides and user manuals and standards
The detailed administration of the ETS (Forestry) will be covered in a series of guides and user manuals and standards. These documents will provide guidance to, and in some cases, further detail of, the prescribed rules and procedures that a Participant must follow in order to comply with the ETS and related legislation.
These manuals and standards will be progressively available from December 2008 at www.maf.govt.nz/sustainable-forestry:
1. The Land Eligibility Guide will give practical guidance on how to determine whether an area of forest is pre-1990 or post-1989 forest land under the Act.
2. The Mapping Manual and Standard will describe how to define an area of forest using either the online mapping tool or by submitting existing data in electronic form, for example, shapefiles.
3. The Look-Up Table Guide will describe how to use tables to determine the amount of carbon (the ‘carbon stocks’) within a Participant’s forests.
4. The Field Measurement Manual and Standard will describe how to carry out standard forest inventory field measurements to provide data that can be used to assess forest carbon stocks using an online Carbon Calculator supplied by MAF.
5. The Carbon Calculator Guide will describe how to calculate the carbon stocks and how these change over time within a Participant’s forests based on data obtained by Field Measurements.
Draft Forestry Allocation Plan released for consultation
The Minister Responsible for Climate Change Issues has given public notice of the "Draft Forestry Allocation Plan" and supporting "Information Document: New Zealand Emissions Trading Scheme Draft Forestry Allocation Plan and Deforestation Exemption Policies for Pre-1990 Forest Land" for consultation and submissions.
The "Draft Forestry Allocation Plan" outlines the proposed approach to allocating New Zealand Units to pre-1990 forest landowners under the ETS.
The supporting "Information Document: New Zealand Emissions Trading Scheme Draft Forestry Allocation Plan and Deforestation Exemption Policies for Pre-1990 Forest Land" explains the rationale for that intended approach in more detail and also outlines the intended approach for granting exemptions.
Under the ETS, all owners of pre-1990 forest land will need to decide in the first half of 2009 whether to:
• apply for an allocation of NZUs; or
• if eligible, apply to have land permanently exempt from the ETS (under the “less than 50 hectare” threshold exemption or the “tree weed exemption”).
The "Draft Forestry Allocation Plan" establishes criteria and process for allocations and exemptions.
Call for submissions
Submissions on the "Draft Forestry Allocation Plan" are due by 28 February 2009. Submissions can be made on the form attached to the Plan (see www.maf.govt.nz/sustainable-forestry) and submitted by email to FAPsubmissions@maf.govt.nz or sent to FAP Submissions, Ministry of Agriculture and Forestry, PO Box 2526, Wellington.
More information
The "Draft Forestry Allocation Plan" and supporting "Information Document: New Zealand Emissions Trading Scheme Draft Forestry Allocation Plan and Deforestation Exemption Policies for Pre-1990 Forest Land" can be downloaded from www.maf.govt.nz/sustainable-forestry.
Copies are also available from the Climate Change contact centre – 0800 CLIMATE (254 628), MAF’s head office, 25 The Terrace, Wellington, or the head office of the Ministry for the Environment, 23 Kate Sheppard Place, Wellington, (tel +64 4 439 7400).
Public workshops about forestry and the ETS will be held around the country early in the New Year. The workshops will include details of the "Draft Forestry Allocation Plan" and the pre-1990 forest land exemption policies. Dates and venues will be provided in future issues of the "Sustainable Forestry Bulletin" and posted on www.maf.govt.nz/sustainable-forestry.
Next steps
Once all submissions have been received (by 28 February 2009) the Director-General of MAF will prepare a report on the submissions for the Minister Responsible for Climate Change Issues. On the basis of that report, the Minister may amend the "Draft Forestry Allocation Plan". The Minister will then recommend to the Governor-General that a finalised Forestry Allocation Plan be issued by Order in Council.
It is proposed that the finalised Forestry Allocation Plan will be issued around April 2009. Forest owners will then have until 30 June 2009 to choose whether to apply for an exemption (under the “less than 50 hectare” threshold) or until 31 July 2009 (date to be confirmed) to apply for an allocation.
Forest owners have only one chance to apply, and cannot apply for both an allocation and an exemption on the same piece of land.
Proposed Timeline for Forestry Allocation Plan
| October 2008 | "Draft Forestry Allocation Plan" issued |
| January/February 2009 | Public workshops about forestry and the ETS around New Zealand – details to be announced |
| 28 February 2009 | Submissions on "Draft Forestry Allocation Plan" close |
| April 2009 (TBC) | Finalised Forestry Allocation Plan issued
Forest owners invited to apply for exemptions/allocations |
| 30 June 2009 | Closing date for exemption applications under the “less than 50 hectare” threshold |
| 31 July 2009 (TBC) | Closing date for allocation applications |
| August 2009 | Release of Draft Determination (for issue of NZUs) |
| October 2009 | Deadline for any forest owner who applied for an allocation to notify the Minister where they feel there is an error in the Draft Determination |
| December 2010 – April 2010 | Final Determination published and NZUs transferred |
Help us keep you informed
The "Sustainable Forestry Bulletin" is about keeping you and others with an interest in forestry informed. Please feel free to forward it on to others who might be interested.
To subscribe to the Bulletin, please email sustainableforestrybulletin@maf.govt.nz with ‘Subscribe: Sustainable Forestry Bulletin’ in the subject line and your contact details in the body of the email.
If you have any questions relating to anything in this Bulletin or other forestry matters, please email your enquiries to: climatechange@maf.govt.nz or ring 0800 CLIMATE (254 628).
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Contact for Enquiries
Emissions Trading Scheme
Ministry of Agriculture and Forestry
PO Box 1127
Wellington
Or call us on 0800 CLIMATE (254 628)
