Joining the ETS with forest that was funded by a grant
If you receive a grant from the Crown to plant forest on an area of land, you enter into a contract. The terms of your contract may specify a period where you:
- cannot enter that forest land into the ETS, and/or
- cannot earn New Zealand Units (NZUs or units) for carbon absorbed by that forest land.
If neither of those terms are in your grant contract, you may enter your eligible post-1989 forest land into the ETS at any time. The rest of this web page does not apply to you.
If these terms apply and the post-1989 forest land planted under a grant is eligible to enter the ETS, it can only do so after the period specified in the contract.
Forest land is no longer considered funded by a grant for the purposes of the ETS if:
- the grant is paid back during the period specified in the contract, or
- the grant was paid back before October 2022.
Earning units for grant-funded forests in the ETS
You can earn units for forest land in the ETS as the forest grows and stores carbon. To earn units, you must report on the carbon storage. There are regular reporting periods called "mandatory emissions return periods". At the end of each mandatory emissions return period, you must submit an emissions return. This is how you know how many units you are entitled to earn or must pay (surrender).
How grant contracts affect emissions returns
When you enter forest land into the ETS, you can usually earn units for the whole of the current mandatory emissions return period, even if you enter partway through. However, your contract may state that you can’t earn units for the forest land during a specific period. Even if this period has ended when you complete your emissions return, if it covers time that the land was under the grant contract, you cannot earn units for that time.
If a grant-funded forest cannot earn units for a specific period of the emissions return, the calculations you’ll need to do for the emissions return are more complicated.
When you complete your emissions return for this forest land, you must calculate how much carbon it stored:
- in the period specified in the grant contract, and
- over the whole emissions return period.
You’ll then need to subtract the amount calculated for the period specified in the grant contract from the amount calculated for the whole period.
Creating carbon accounting areas with grant-funded forest
Carbon accounting areas are areas of forest land in the ETS. When post-1989 forest land is registered in the ETS, the person registering it must create 1 or more carbon accounting areas. There may be fewer calculations if you put your forest land with a different grant funding status in a separate carbon accounting area. You can discuss how to arrange your carbon accounting areas with a forestry adviser or consultant.
Sub-areas and grant-funded forests
If you have post-1989 forest land in the ETS, you must calculate changes in carbon for your emissions return. To do this, you must identify sub-areas of land with the same characteristics, within each carbon accounting area. If you received a grant that restricts when you can earn units for forest land, the land covered by the grant cannot be in the same sub-area as land that wasn’t funded by a grant.
Who to contact
If you have questions about forestry in the ETS:
- email email@example.com or
- freephone 0800 CLIMATE (0800 25 46 28) and select option 2.