Government proposes banning pine carbon farms from the ETS
The Government is proposing changing the rules so that permanent pine forests can’t earn credits under the Emissions Trading Scheme.
The change would not affect pine forestry for logging, which is managed under a different category.
A rising price for carbon offsets has made converting to carbon farming attractive on less profitable sheep and beef farmland, and a few carbon farming companies have become major landowners.
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Both farmers and environmentalists have expressed concern about what will happen to pine forests long term if the trees are left unharvested. Some companies plan to let their pine transition to permanent native forest, however the feasibility doing of that on a huge scale has been questioned by some forestry scientists.
A new category of permanent forest is due to enter the Emissions Trading Scheme next year, in a bid to make it easier for landowners who plant forests for their carbon-sucking powers.
Currently, the scheme doesn’t formally differentiate between species – but the financial incentives tend to favour pine, because it often grows faster and therefore earns more credits more quickly. Carbon farming companies say it isn’t currently feasible to plant natives from the outset, without significant subsidies.
Forestry Minister Stuart Nash and Climate Change Minister James Shaw have released a public discussion document proposing that from the first day of 2023, only native forest would be eligible for carbon credits under the permanent forest category.
“The government wants to encourage afforestation to help meet our climate change targets, offset carbon emissions, and also help farmers, landowners and investors diversify their income streams,” said a statement from Nash.
“We want to balance the risks created by new permanent exotic forests which are not intended for harvest. We have a window to build safeguards into the system, prior to a new ETS framework coming into force on 1 January 2023.”
Nash said permanent pine was more at risk from pests and fire compared with native forest.
“Increased plantings of exotic forests are being driven by rising carbon prices as landowners and investors seek higher returns. The [carbon unit] price has more than doubled over the past year, from around $35 in late 2020 to over $80 in February 2022.”
Public submissions are open from 14 March until 22 April 2022.
The Climate Change Commission’s zero carbon roadmap for New Zealand envisages large areas of new native forest between now and 2030, as well as smaller areas of new pine, to meet the country’s climate goals.