Forest land in the Emissions Trading Scheme
Forest land has a specific meaning under the Emissions Trading Scheme (ETS) and is classed into 2 types. Your obligations under the ETS depend on which type you have.
What forest land is
The ETS has a specific definition for forest land that separates:
- land being managed as a forest
- other trees in the landscape.
Under the ETS, forest land must be at least a hectare in size and have (or will have) tree crown cover:
- of more than 30% in each hectare from forest species
- with an average width of at least 30m.
Forest species in the ETS are those that can reach at least 5m in height when mature. This doesn't 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 or post-1989 forest land.
The Kyoto Protocol set 1 January 1990 as the international baseline date for net emissions. Forests established before 1990 are considered part of New Zealand's baseline emissions and removals. They cannot be counted as additional carbon storage in the ETS. Forests established after 1989 are considered new carbon sinks. They can be registered in the ETS to earn units for that carbon storage.
Download our guide to find out more about the Kyoto Protocol.
Pre-1990 forest land
This is land that:
- was forest land on 31 December 1989
- remained forest land on 31 December 2007
- contained mostly exotic forest species on 31 December 2007.
Land that was indigenous forest land on 31 December 1989 and remained so on 31 December 2007, is not pre-1990 forest land and doesn't have ETS obligations.
Up to November 2011, owners of pre-1990 forest land were given the option to apply for a one-off allocation of New Zealand Units (NZUs), in recognition of the impact of the ETS deforestation rules. They do not receive further NZUs if their forest's carbon stock increases.
Pre-1990 forest landowners can harvest and replant their forest without any liability. But if the 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 forests are forests first established after 31 December 1989. To be considered a post-1989 forest, the land must currently be 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.
Post-1989 landowners, or holders of registered forestry rights or leases, can apply to register as ETS participants at any time. Once registered, they can:
- claim NZUs for the amount of carbon stored as the forest grows
- apply to add or remove forest land in the ETS at any time.
- account for the changes in carbon stock in your forest using one of the carbon accounting methodologies
- file an emissions return once for every mandatory emissions return period to account for changes in your forest's carbon stock
- 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)
- surrender the total number of units transferred for the forest land since registration (regardless of who received the units) if the land is withdrawn from the ETS
- use the Field Measurement Approach (FMA) if you have more than 100 hectares.
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Find out more
- The NZ Emissions Trading Scheme Review – 26 July 2017 announcement
- An overview of forestry in the Emissions Trading Scheme
- Climate Change Response Act 2002 – NZ Legislation
- Climate Change (Forestry Sector) Regulations 2008 – NZ Legislation