Permanent Forest Sink Initiative is closing
From 1 January 2024, the Permanent Forest Sink Initiative (PFSI) will be closed. The new category of "permanent forestry" in the Emissions Trading Scheme (ETS) is available from 1 January 2023 to replace the PFSI. The permanent category is for forests that won't be clear-felled for at least 50 years.
If you have a permanent forest sink covenant, you can apply to move your eligible land into the ETS from 1 January 2023. If you do, you have 2 ETS categories to choose between. If you're still part of the PFSI on 1 January 2024, you will be automatically moved into the permanent category.
We will consider requests to cancel permanent forest sink covenants if you do not want to move the land into the ETS. To discuss cancelling your covenant, email pfsi@mpi.govt.nz
Find out more about your options and transitioning into the ETS
Your obligations in the Permanent Forest Sink Initiative
As a permanent forest sink covenant holder, you must meet the terms of your covenant. Each covenant has its own specific terms. Typically, these include restrictions on harvesting.
You must regularly submit a request for New Zealand Units (NZUs or units). This is called a "reconciliation". You will earn units based on the increase in carbon in your forest. You must complete this for each commitment period. They are usually 5 years long. To find out when your unit reconciliation is due, check your covenant or contact us at pfsi@mpi.govt.nz
Use the "Unit reconciliation" form to submit your mandatory return. Send your completed form to pfsi@mpi.govt.nz
Unit reconciliation form [PDF, 323 KB]
Requesting your units
You can submit a voluntary request for units once a year. The number of units you receive is based on calculations of the amount of carbon in your forest. Your covenant provides instructions for how to do these calculations.
Use the "Annual request for units" form to submit your annual request for units. Send your completed form to pfsi@mpi.govt.nz
Annual request for units form [PDF, 298 KB]
Units will be paid into your New Zealand Emissions Trading Register (NZETR) holding account.
Selling land under your permanent forest sink covenant
If you sell land that is included under your covenant, your covenant moves with the land. This means the new landowner becomes responsible for the terms in the covenant.
You must tell us if ownership of the land under a permanent forest sink covenant changes. Use the "Change of ownership of land under covenant" form to tell us. Send your completed form to pfsi@mpi.govt.nz
Change of ownership of land under covenant form [PDF, 290 KB]
What happens to the New Zealand Units when land under a permanent forest sink covenant is sold
When land in the PFSI is sold, the units that have been paid to a PSFI landowner stay with the landowner who earned them. These units will have been paid into the landowner's holding account. However, the "unit balance" belongs to the land. This is the net total number of units earned for the land since the covenant was registered. This balance stays with the land when it's sold.
Changing the area of land covered by your covenant
When you registered your permanent forest sink covenant, it covered a certain area of land. In some cases, you may be able to remove small areas from your covenant. This is called a "covenant variation".
To discuss changing the area of your covenant, email pfsi@mpi.govt.nz
If you remove land from your covenant, you will need to surrender some units. This amount is based on the area of land you remove.
Areas of land that are yet to be established as forest
When you registered your permanent forest sink covenant, you may have designated areas that didn't yet have forest growing on them. These are known as "yet to be established" areas. If forest has since been planted or self-seeded on this land, you can change your covenant area to include it. This means you'll be able to earn units for this forest.
If these areas don't have forest growing on them, they won't be able to move into the ETS when the PFSI ends.
Who to contact
If you're currently in the PFSI and you have questions:
- email pfsi@mpi.govt.nz, or
- phone 0800 25 46 28.
