- Physical impacts and adaptation
- NZ greenhouse gas reports
- Doing our fair share
- Emissions trading
Under the New Zealand Emissions Trading Scheme (NZ ETS), owners of pre-1990 forest land will be required to surrender New Zealand Units (NZUs) if they ‘deforest’. Deforestation is the clearing of more than two hectares in each five-year period from 2008, followed by either a change in the use of the land, for example from forestry to dairy farming, or the land not being re-established in forest in specified timeframes. The requirement to surrender units is commonly called a ‘deforestation obligation’. Currently, forestry participants have the option of either purchasing NZUs, purchasing international units, or paying a fixed price of $25 per NZU to meet their deforestation obligations under the scheme.
‘Pre-1990 forests’ are areas that were forested as at 31 December 1989 and remained forested on 31 December 2007.
Under the NZ ETS, forest land is defined as being at least 1 hectare with forest species that has, or is likely to have, tree crown cover of more than 30 per cent on each hectare. Forest land does not include land that has, or is likely to have, tree crown cover with an average width of less than 30 metres.
In the NZ ETS, forest species are trees capable of reaching 5 metres in height at maturity in the place they are growing, excluding tree species grown primarily for the production of fruit and nut crops.
Deforestation obligations for pre-1990 forests apply only to exotic forests, not indigenous forests. Pre-1990 forest landowners do not face any deforestation obligations to surrender NZUs if they harvest the trees, as long as the land is replanted or regenerates into forest within specified timeframes.
Deforestation of up to two hectares is permitted.
Pre-1990 forest land is considered deforested (and subject to deforestation obligations for carbon emissions) if the forest has been cleared, and the following thresholds are not met:
The tests above are applied to the forest land on a hectare-by-hectare basis.
Deforestation of up to two hectares in each five-year period from 2008 is permitted.
Under the NZ ETS, owners of pre-1990 forest land have the option to offset their deforestation liability. This is known as forestry offsetting.
From 1 January 2013, forestry offsetting will be an option for pre-1990 plantation forest landowners. Forestry offsetting allows pre-1990 forest landowners to convert pre-1990 forest land to a better use without deforestation liabilities, It will remove the deforestation liability under the NZ ETS and therefore the requirement for a forest landowner to surrender units when they deforest, provided they plant a new carbon equivalent forest elsewhere.
The new forest must be established by direct planting (not natural regeneration) on land that would be eligible as post-1989 land. The new forest will also need to be of at least the same area and achieve the same carbon stock as the original cleared forest, within the usual rotation length of the cleared forest. The new forest land cannot be registered as post-1989 forest land and earn credits in the ETS.
In recognition of the benefits offered by offsetting, pre-1990 forest landowners who take up offsetting will need to surrender or repay NZUs equivalent to the second tranche of the forestry allocation for the land being offset.
Please visit Forestry in an Emissions Trading Scheme (Ministry of Primary Industries website) for more information.
Last updated: 19 April 2013