Govt limits forestry conversions

Announced today, Agriculture and Forestry Minister Todd McClay says the changes deliver on an election commitment to protect food production for farmers while providing ETS certainty for foresters.

“They also address the previous Government’s failed ETS policies that incentivised large-scale conversion, created ETS complexity, and undermined our world-best primary producers,” he says.

Included in the rule changes are:

• A moratorium on exotic forestry registrations for Land Use Classification 1-5 actively farmed land.
• An annual registration cap of 15,000ha for exotic forestry registrations on LUC 6 farmland.
• Allowing up to 25% of a farm’s LUC 1-6 land to be planted in forestry for the ETS, ensuring farmers retain flexibility and choice.
• The ability for landowners to have their LUC categorisation reassessed at the property level
• Excluding specific categories for Māori-owned land from the restrictions, in line with Treaty obligations, while ensuring pathways for economic development.
• Transitional measures for landowners currently in the process of afforestation who can demonstrate an intent to afforest prior to 4 December 2024.

“These measures help to protect our most productive farmland while allowing room for sustainable forestry growth,” McClay says.

“Landowners will retain the ability to make smart land use decisions, enhancing both profitability and environmental outcomes,” he adds.

Meanwhile, Climate Change Minister Simon Watts says the changes provide much-needed clarity for participants in the ETS.

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“These reforms ensure a credible ETS whilst protecting rural livelihoods,” Watts says.

He says forestry and agriculture both play a significant role in the Government’s climate strategy.

“It’s important we are incentivising the right balance so New Zealand can have prosperous communities, increasing primary production and exports, and a thriving economy while meeting our climate goals,” he says.

McClay says the Government is also working to progress policy with the private sector to plant trees on Crown land with low environmental and farming value.

“Together these policies will strike the right balance of afforestation, maintaining farmer flexibility, and creating more productive value from Crown assets,” he says.

Federated Farmers forestry spokesperson Toby Williams says the announcement is “great news”.

"Federated Farmers made rethinking News Zealand’s ETS Forestry rules and climate targets one of our 12 key policy priorities in the lead-up to the last election,” Williams says.

"We’re really pleased - and farmers across the country will be too - that the Government is taking action today to address those concerns.

"Federated Farmers also welcome the cap on carbon farming on Class 6 land as a further step to safeguard against large-scale carbon farming."

He says New Zealand’s rural communities bear the brunt of what he labels as misguided climate change targets, with over 200,000ha of productive beef and sheep land planted in carbon farming over the past five years.

"Alarmingly, we’ve seen sheep numbers in New Zealand fall 4.3% in just the last 12 months, and this comes on the back of decades of reductions.

"We’re seeing schools close, rural bus runs stop, and local clubs fail as jobs are lost from communities across rural New Zealand,” Williams says.

Importantly, Williams says, people can still plant forestry on their lands should they wish to do so, meaning there is no impact on property rights.

"However, the Government simply won’t incentivise this behaviour by allowing these forests to earn carbon credits through the Government’s ETS.

"We understand these changes are also not retrospective, so won’t affect existing forests."

While today’s announcement addresses current ETS settings, the underlying issue remains the way our international climate targets continue to rely on huge levels of carbon farming to be achieved, Williams says.

"While it is a great announcement today, it’s also the case that the Government is currently doing a three-week consultation on what New Zealand’s next target should be under the Paris Agreement.

"Past governments have set targets that can be achieved only with huge levels of forestry planting, and that has put New Zealand in our current situation."

"To truly address the drivers of carbon farming, the Government needs to distance itself from such plans and make sure the new Paris Target it’s set to announce can be achieved without swamping rural communities in carbon farming and threatening food production in the process." 

Legislation will be introduced in 2025 and is intended to enter into force from October 2025.