On this page
Before you submit an application to register in the ETS, make sure:
- you understand the implications for you or your organisation
- your land is eligible
- you understand the differences between post-1989 forest land standard forestry and permanent forestry, and how you earn and pay units for these
- it would be cost-effective for you to join the ETS, and if the number of units you would receive would make it worthwhile
- you understand what liabilities you might face if you decide to leave the scheme
- you seek professional advice if it is needed.
These topics are explained below on this web page, with links to other relevant information.
Your responsibilities if you register in the ETS
If you register in the ETS, you'll have some responsibilities. People and organisations registered in the ETS are known as "ETS participants" under the law. They must, for example:
- report the amount of carbon in forest land in emissions returns at certain times
- keep records of their forest management
- keep records of any calculations of the amount of carbon gained or lost in the forest
- tell us if the situation changes, for example, if there is a change in who owns the forest.
If you register and then don't meet your ETS responsibilities, you may receive a penalty or an infringement notice and fee.
You may also be prosecuted. If you are convicted of a criminal offence, you could be liable to pay a fine or face imprisonment.
Before you apply, make sure the land is eligible
If you plan to apply to register in the ETS with post-1989 forest land, make sure your land is eligible. There are 2 aspects of land eligibility to consider.
- Requirements that define "forest land" in the ETS based on its species, size, crown cover, and proximity to other forest in the application.
- Rules that decide what sort of ETS forest land it is – based on when it was planted or established and what was on the land before.
If you can't work out if you have eligible post-1989 forest land, you could:
- consider hiring and asking a consultant for advice
- apply for an emissions ruling about your forest land eligibility.
Decide whether the post-1989 forest land will enter the ETS as standard or permanent forestry
From 1 January 2023, you can decide whether your post-1989 forest land will enter the ETS as:
- standard forestry
- permanent forestry.
If you register and the post-1989 forest land enters the ETS as standard forestry:
- you’ll earn and pay (surrender) New Zealand Units (NZUs, units) based on averaging accounting in your emissions returns
- because the forest land enters the ETS under averaging accounting, you’ll only earn units during the first rotation of your forest until the ETS-specified average age of the forest
- under averaging accounting, there are specific rules for determining what is the first rotation of forest land in the ETS
- there are no restrictions on harvesting if you replant the forest so that the land isn’t considered deforested under ETS rules
- you can remove the land from the ETS at any time, although you must pay (surrender) any units received for the land if you do.
If you register and the post-1989 forest land enters the ETS as permanent forestry:
- you’ll earn and pay (surrender) units based on stock change accounting in your emissions returns – these units are tagged to show that they come from this kind of forest
- limited selective harvesting of permanent forests is allowed without penalty - more than 30% tree crown cover must remain in each hectare of forest.
For 50 years, you can only remove areas of permanent forestry from the ETS:
- with approval from the Minister for Climate Change who must be satisfied certain conditions are met, or
- if a natural event permanently damages the land so that you cannot re-establish forest land, or
- if exempted under secondary legislation by Order in Council, or
- by deforesting the land, paying (surrendering) units for the deforestation, and accepting the clear-fell penalties.
After 50 years in the ETS, you’ll have some options. You can choose to keep the land in the ETS as standard or permanent forestry, or remove the land from the ETS completely.
There is some preparation involved in applying to register in the ETS. This section explains what's needed.
You can choose to appoint a representative to apply to register on your behalf. Representatives can advise you about ETS rules and help with your decision-making. They can also help with other ETS applications and other ETS responsibilities.