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Managing exotic afforestation incentives by changing the forestry settings in the NZ Emissions Trading Scheme

Update – 1 November 2022

From 14 March to 22 April 2022, the Government consulted on proposals to exclude exotic forests from permanent forestry in the New Zealand Emissions Trading Scheme (NZ ETS). Cabinet has made final decisions on this proposal and agreed to redesign the permanent forestry activity to better support the Government’s objectives for forestry. In the interim while the activity is being redesigned, permanent forestry will be available to all eligible post-1989 forest land from 1 January 2023.

The Government also consulted on whether to adjust how carbon accounting applies to forests on remote and marginal land. Cabinet agreed that further consideration of a long rotation option will be undertaken alongside work on the future design of permanent forestry in the ETS.

The summary of submissions, Regulatory Impact Statement and other documents are now available.

Documents related to this consultation

Cabinet paper: Next steps on the New Zealand Emissions Trading Scheme’s permanent forest category [PDF, 1.3 MB]

Cabinet minute: New Zealand Emissions Trading Scheme: Next Steps on the Permanent Forest Category [PDF, 748 KB]

Regulatory Impact Statement: Managing Permanent Exotic Afforestation Incentives [PDF, 2.9 MB]

Afforestation Economic Modelling – Impact of carbon price on forest management [PDF, 1.8 MB]

Summary of submissions [PDF, 3.2 MB]

Afforestation economic analysis [XLSX, 962 KB]

Area-weighted FMA table 2021 ETS averaging consultation [XLSX, 13 KB]

Background to this consultation

The Government sought feedback on proposals to achieve better outcomes from afforestation. This included:

  • excluding exotic forests from the permanent post-1989 category in the New Zealand Emissions Trading Scheme (NZ ETS)
  • whether to adjust how carbon accounting applies to forests on remote and marginal to harvest land
  • opportunities for improving incentives for indigenous afforestation.

Submissions opened on 14 March and closed at 5pm on 22 April 2022.

In March, the Ministry for Primary Industries (MPI) and the Ministry for the Environment (MfE) held 3 webinars with key stakeholders, iwi/Māori, and other interested parties to discuss these proposals.

Recordings of the webinars

The options proposed for managing afforestation

Afforestation is a key pathway for New Zealand meeting its climate change targets by offsetting carbon emissions, providing a source of bioenergy, and the replacement of high carbon materials. 

However, the increasing New Zealand Unit (NZU) price is driving higher rates of afforestation, particularly fast-growing permanent exotic forests. This is raising concern amongst some industry groups and community organisations on the risk of permanent exotic forests displacing pastoral farming, and production and indigenous forests.

To manage these risks, the Government consulted on:

  • whether to prevent exotic forests from registering in the permanent post-1989 category in the NZ ETS. This to ensure any legislative changes can be passed by Parliament before this category commences on 1 January 2023.
  • a proposal to adjust how the new carbon accounting method in the NZ ETS (averaging accounting) applies to remote and marginal land for harvesting. This is to reflect the later harvest age and extra carbon stored in some forests on remote and marginal to harvest land.
  • opportunities for improving incentives for indigenous afforestation, following on from the Emissions Reduction Plan consultation late last year.

The discussion document provided information on these topics. 

Discussion document

Managing exotic afforestation incentives: Proposals to change forestry settings in the NZ Emissions Trading Scheme [PDF, 1.5 MB]

Regulatory impact statement

Regulatory impact statement: Managing permanent exotic forestry [PDF, 602 KB]

Questions and answers (added 20 April)

Managing exotic afforestation incentives consultation: questions and answers [PDF, 380 KB]

Related documents (added 12 April 2022)

Area weighted Field Measurement Approach (FMA) table [XLSX, 13 KB]

Transitioning exotic plantations to native forest: A report on the state of knowledge (2021) [PDF, 10 MB]

Transitioning exotic plantations to native forest: Practical guidance for landowners (2021) – Canopy

Opportunities and limitations of exotic Pinus radiata as a facilitative nurse for New Zealand indigenous forest restoration (2019) – NZ Journal of Forestry Science

Other research papers – preview or summary only

You may need to log in, pay, or make a request to see full copies of the papers.

Mitigating an organisation's future net carbon emissions by native forest restoration (2001) – JSTOR

Artificial canopy gaps accelerate restoration within an exotic Pinus radiata plantation (2015) – ResearchGate

Webinars held for public, stakeholders, and iwi

Webinar 1: For the public and stakeholders

Date: 23 March 2022

Webinar 2: For the public and stakeholders

Date: 29 March 2022

Webinar 3: For iwi – Māori specific

Date: 30 March 2022

No video from webinar 3 was available before the consultation closed.

Submissions are official information

Note that all, part, or a summary of your submission may be published on this website. Most often this happens when we issue a document that reviews the submissions received.

People can also ask for copies of submissions under the Official Information Act 1982 (OIA). The OIA says we must make the content of submissions available unless we have good reason for withholding it. Those reasons are detailed in sections 6 and 9 of the OIA.

If you think there are grounds to withhold specific information from publication, make this clear in your submission or contact us. Reasons may include that it discloses commercially sensitive or personal information. However, any decision MPI makes to withhold details can be reviewed by the Ombudsman, who may direct us to release it.

Official Information Act 1982 – NZ Legislation