Forestry in the Emissions Trading Scheme

Forestry is important in helping New Zealand meet its international climate change obligations. By putting a price on greenhouse gases, the Emissions Trading Scheme (ETS) encourages landowners to establish and manage forests in a way that increases carbon storage. If you own or have rights to forest land, you may be able to earn carbon credits through the ETS. You must also meet specific obligations.



Changes to application processing

If you are applying to add land or register post-1989 forest land in the ETS, you need to be aware of some changes to our registration process.

ETS transactions system outage

Due to system maintenance the Online ETS Transactions site will be offline between 5pm on Friday, 20 October and 8am on Tuesday, 24 October 2017. We apologise for any inconvenience this may cause.

If you have any questions:

About the ETS

The New Zealand Emissions Trading Scheme (ETS) puts a price on greenhouse gas emissions. The primary unit of trade is the New Zealand Unit (NZU). NZUs are also called carbon credits.

  • Certain entities within the ETS that emit greenhouse gases must pay units to the government.
  • Entities that remove greenhouses gases, like those in forestry, can earn units from the government, which they can sell to companies that emit.

MPI administers the ETS for forestry, along with the Ministry for the Environment (MfE) and the Environmental Protection Authority (EPA).

Forest owners and the ETS

Forest owners and landowners participate in the ETS in 2 ways:

  • voluntarily – owners can apply to register their post-1989 forest land into the ETS to earn NZUs
  • mandatorily – owners become participants when non-exempt pre-1990 forest land is deforested.

Forest land in the ETS

Forest land has a specific definition under the ETS. It must be at least a hectare in size and have (or will have) tree crown cover:

  • from forest species of more than 30% in each hectare
  • with an average width of at least 30 metres.

Forest species in the ETS are those that can reach at least 5 metres in height at maturity. They do not include trees grown primarily for fruit or nuts.

Two classes of forest

Forest land is classified differently depending on when it was first established – pre-1990 and post-1989 forest land.

Pre-1990 forest land

This is land that:

  • was forest land on 31 December 1989, and
  • remained forest land on 31 December 2007, and
  • contained predominantly exotic forest species on 31 December 2007.

Note, land that was indigenous forest land on 31 December 1989, and remained so on 31 December 2007, is not pre-1990 forest land and is not subject to ETS obligations.

Up to November 2011, owners of pre-1990 forest land were given the option to apply for a one-off allocation of NZUs, in recognition of the impact of the ETS deforestation rules. They do not receive further NZUs if their forest's carbon stock increases.

Obligations

Pre-1990 forest landowners can harvest and replant their forest without any liability. But if the pre-1990 forest land (that is not exempt) is deforested, the landowner or a third party who had deforestation rights must:

  • notify MPI of deforestation
  • submit an emissions return, and pay units for deforestation.

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Post-1989 forest land

Post-1989 landowners, or holders of registered forestry rights or leases, can apply to register as ETS participants at any time. Once registered, participants can:

  • claim NZUs for the amount of carbon stored as the forest grows
  • apply to add or remove forest land to the ETS at any time.

Post-1989 forest land is land that is currently forest land and either:

  • wasn't forest land on 31 December 1989
  • was forest land on 31 December 1989, but was deforested between 1 January 1990 and 31 December 2007, or
  • was pre-1990 forest land that was deforested on or after 1 January 2008, and any ETS liability has been paid.

Find out how to register post-1989 forest land

Obligations

You must:

  • file an emissions return once in every mandatory emissions return period to account for changes in your forest's carbon stock
  • pay units if your forest's carbon stock decreases
  • tell the government if you transfer some or all of your registered post-1989 forest land to another person or entity (for example, if you sell your forest)
  • repay units transferred to you for the forest land if the land is withdrawn from the ETS
  • use the Field Measurement Approach (FMA) if you have more than 100 hectares.

Find out about:

Keep informed with the Sustainable forestry bulletin

The Sustainable forestry bulletin keeps people with an interest in forestry informed. Topics include forestry in the ETS and carbon forestry.

Disclaimer

The information on this website about the ETS should not be relied on as a substitute for the wording of the Climate Change Response Act 2002 or Climate Change (Forestry Sector) Regulations 2008. We suggest you seek independent advice before making any decisions relating to registering or managing a forest under the Emissions Trading Scheme.

Find out more

Who to contact

If you have questions about forestry in the ETS:

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