ETS costs cut 66% for forest owners – McClay

Forestry Minister Todd McClay says the decision will be beneficial to all forest owners.

McClay says that the previous government had forest owners paying $30.25 per hectare per year, something he says is "excessive" and forced the sector to take legal action.

"We're lowering that, for a second time, to $10.25," he says.

"This represents a 66% reduction in the annual charge since the National-led Government took office," McClay adds.

Consultation on the reduction opens today and is the result of a second review into operational costs of the scheme.

McClay says he requested the first independent review in 2024, which resulted in an initial reduction to $14.90 per hectare.

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Key proposed changes include lowering the annual charge for post-1989 forest land from $14.90 to $10.25 per hectare per year and introducing eight new service fees for activities that deliver specific private benefits to the participants.

"The changes aim to ensure cost recovery reflects the true costs of administering forestry in the ETS while upholding high service standards," McClay says.

The consultation also seeks feedback on an alternative reduced annual charge option for forests that no longer need to report carbon stock changes, to apply for a limited period.

“Today’s announcement delivers on the Government’s promise to rebuild confidence in the forestry sector and support its role in achieving New Zealand’s exporting and emissions targets,” he concludes.

Updated settings are expected to take effect from mid-2026.