A carbon farming company's plans to establish plantation forest on thousands of hectares in the Hunter Hills may not proceed.

In April, Environment Canterbury granted a consent allowing New Zealand Land Leasing Ltd to plant 4230 hectares of radiata pine and douglas fir on Kaiwarua Station.

But a representative of a Christchurch-based company contracted to manage the plantation said this week it was unclear whether the project would go ahead.

Evan MacClure, director at Forest Management Ltd, said planting Kaiwarua had not yet started and it was possible the property would not be planted but sold instead.

He declined to elaborate on reasons for the delay. A representative of New Zealand Carbon Farming, the applicant's parent company, did not return a request for comment.

The declining carbon market had caused difficulty for many involved in New Zealand's carbon industry, Mr MacClure said.

The price for New Zealand carbon credits had fallen from a high of about $20 a tonne last year to around $5 a tonne and had been undercut by cheaper imported foreign credits.

"[Forest Management] has properties that we're planting based on contracts with last year's prices and we will still be doing some reasonable planting compared with what the national total planted area will be," he said.

"The carbon trading business stimulated a lot of this . . . and [the changes] are probably going to take a lot of the investment that went into carbon back out."

New Zealand Carbon Farming also owns Fairview Station, a 1451ha property in Oamaru, which was planted in trees earlier this year.

Planting at Fairview was completed in August.

"Now we'll wait until next year to see if there are any failures that need to be replanted," Mr McClure said. "At the moment we're just sitting back and watching it grow."

Kaiwarua Station, along the north branch of the Waihao River, encompasses Crown land that went into freehold in 2009 through the tenure review process.

By mid-2010 the property owners had listed it for sale for $10 million.

New Zealand Carbon Farming bought the land to establish plantation forest on 5585 ha of the 5915-hectare property, according to consent application documents.

The company's website states the property will be planted between 2013 and 2015.

The ECan consent allowed forestry planting on 4230ha of the property, a 1355ha reduction from the amount sought in the consent application.

Much of the reduction is because of conservation covenants placed on about 800ha of the property during the tenure review process. The land bound by the covenants can be used only as grazing for sheep and cattle. Mr MacClure said he was unsure whether New Zealand Carbon Farming was aware of the covenant restrictions at the time it submitted the consent application.

- © Fairfax NZ News

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