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Forestry in the ETS: Second set of proposed cost recovery fees and charges


4 October 2023 – Cabinet papers and related documents released

Approval to consult on new proposed fees and annual charge for forestry cost recovery – Cabinet paper [PDF, 891 KB]

Tranche Two Changes to Cost Recovery Settings in the Forestry Component of the New Zealand Emissions Trading Scheme – Cabinet paper [PDF, 740 KB]

Climate Change (Forestry) Amendment Regulations 2023 – Cabinet paper [PDF, 739 KB]

21 September 2023 – Changes to ETS cost recovery settings published

Public consultation closed on 3 May 2023. Following cabinet approval the new fees and charges were published on 21 September 2023. These changes take effect on 19 October 2023.

Consultation background

The Ministry for Primary Industries sought feedback on changes to cost recovery settings for the forestry in the Emissions Trading Scheme (ETS).

For this consultation, we've looked at introducing new fees for 22 services and an annual charge for 6 services.

The invitation was about making a submission about these fees and charges between 22 March and 3 May 2023.

This is the second set of changes to ETS cost recovery settings. We consulted on the first set in September and October 2022 and the changes came into effect in January.

Consultation document

Forestry in the ETS: Proposed updates to cost recovery tranche two [PDF, 738 KB]

Related closed consultation held in 2022

Forestry in the ETS: Proposed updates to cost recovery settings

A summary of the proposals and the reasons for them

We were looking at introducing:

  • new fees for 22 services
  • an annual charge for 6 services.

The charges will recover the costs of running Te Uru Rākau – New Zealand Forest Service's new operating model for the forestry ETS. In recent years, participation in the ETS has grown rapidly because of increases in the carbon price and the profitability of participation. A new operating model and technology solution was needed to properly manage this growth.

Growing participation and the introduction of the new operating model have meant that the costs of maintaining the forestry ETS have increased significantly over the past several years. These costs are currently being paid for with taxpayer funding. These new charges will reduce the impact on taxpayers and ensure that those who benefit from the forestry ETS are paying the costs for maintaining it.

The proposed new fees will cover services that provide direct benefit to individual participants, such as adding Carbon Accounting Areas or applying to offset deforestation. The annual charge will cover services that provide benefits to participants as a whole, such as the new IT system and the administration and management of general enquiries.

Many of the fees that carry a higher cost cover bespoke services that apply to specific, optional situations. It is expected that most participants, particularly smaller forest holders, will not need to use these services.

The annual charge is proposed to be based on the total area of post-1989 forest land that the person is recorded as a participant for at the point in time. It is considered that the initial annual fee will be charged at the earliest opportunity following the Regulations coming into effect and will be pro-rated based on the number of months remaining in the year.