ETS forest from trees

Te Uru Rākau – New Zealand Forest Service is committed to ensuring that farmers, foresters and others can make the most of the Emissions Trading Scheme (ETS) and maximise their economic returns, while helping to offset greenhouse gas emissions.

The ETS provides an excellent opportunity for farmers, foresters and investors. Far from displacing sheep and beef farming, the vast majority (88%) of forest land registered in the ETS is on land use classes 6 and 7. As such, the ETS provides landowners with the opportunity to maximise their economic returns on more marginal land.

By doing so, forestry is helping New Zealand meet emissions budgets and international climate change commitments. Between 2018 and 2022, ETS registered forests are expected to remove a net of 48.7 million tonnes of carbon dioxide from the atmosphere. Petrol cars will emit around 35 million tonnes of carbon dioxide during this time.

We understand carbon accounting can be complex. New Zealand is the first and, so far, only country in the world to put forestry into its ETS so it can earn and surrender units. So, it’s important we make adjustments to the system to ensure it operates well.

Our guiding principle is to make it easier for landowners to decide whether participating in the ETS is right for them. The good news is that there are changes afoot to the ETS. 

Recent alterations to the Climate Change Response Act 2002 are intended to deliver a range of improvements to the scheme. These reforms include reducing operational complexity and providing additional pathways to support forestry participants and Te Uru Rākau – New Zealand Forest Service to quickly resolve issues.

Most of the new forestry provisions will come into force on 1 January 2023 and have been thoroughly tested with an external group of expert ETS forestry practitioners.

 In addition, we are in the process of transforming how forestry interacts with the ETS on a day-to-day basis. This work involves designing new services to support the legislative changes and implementing new rules. A draft of the rules will be released in July for comment, and I encourage people to have their say.

Another way the system is being strengthened is ensuring consultants and advisers used by people to ensure they meet their ETS obligations adhere to clear standards. From August 6, people providing forestry advice will need to register and meet regulatory standards, including complying with a code of ethics.

This includes people providing advice on forestry activities in the ETS. Registration for forestry advisers is intended to raise the quality and professionalism of forestry advice across the sector. It’s a way of ensuring people are getting the right and appropriate level of advice.

We acknowledge that understanding the ETS can be challenging, and we’ve got resources for people to use at mpi.govt.nz/ets.

Te Uru Rākau – New Zealand Forest Service is also in the process of building its advisory capacity to help people get the right on-the-ground information to meet their forestry needs.

We’re focused on improving processing efficiency and have increased staffing as more people consider entering the ETS and put marginal land to use. We have more than doubled our processing rates and are now getting through applications for around 10,000 hectares a month.

It’s important that people do their homework, provide the right information and seek appropriate advice about the ETS and the requirements it places on them. There can be financial consequences to ETS participation, so all parties need to be certain that everything is correct. This is essential to maintain the environmental integrity of the scheme and ensure that it works for participants.

Improvements will take time, but ultimately, we will have a scheme that better serves the needs of landowners while helping meet our climate change goals.

• Oliver Hendrickson is the director forestry and land management at Te Uru Rākau – New Zealand Forest Service