The Government announced early in March that new proposals to better manage carbon farming could result in future permanent plantings of exotic forests – such as radiata pine – being excluded from the Emissions Trading Scheme (ETS).
Forestry Minister Stuart Nash and Climate Change Minister James Shaw at that time released a public discussion document to prompt feedback on ideas to better manage afforestation.
The Government wanted to encourage afforestation to help meet the country’s climate change targets, offset carbon emissions, and help farmers, landowners and investors diversify their income streams, Stuart Nash said.
From 2023, under current rules, a new permanent forest category of the ETS would allow both exotic and indigenous forests to be registered in the ETS and earn New Zealand Units (NZU).
Under the new proposal, exotic species would be excluded from the permanent forest category.
“We want to encourage the right tree, in the right place, for the right reason. We intend to balance the need for afforestation with wider needs of local communities, regional economies, and the environment.”
Increased plantings of exotic forests at that time were being driven by rising carbon prices as landowners and investors sought higher returns.
The NZU price had more than doubled over the previous year, from around $35 in late 2020 to over $80 in February 2022.
But concerns were growing that huge pine plantations were gobbling up productive agricultural and horticultural land and adversely transforming rural communities.
The ministerial statement moreover noted that permanent exotic forests like radiata pine had potential environmental and ecological risks, such as pests, fire, damaged habitats for native species, biodiversity threats, and a relatively short lifespan compared to well-managed mixed indigenous forests.
The consultation was an opportunity for anyone with an interest in the future of forestry to have their say.
James Shaw said:
“We particularly want to hear from Māori landowners. Iwi-Māori have significant interests in permanent forestry and we want ensure they are not unfairly impacted.”
Media reports in recent days suggest the Government has decided to keep exotic forests in the Emissions Trading Scheme.
The government, in a consultation process that is still ongoing, had proposed to remove exotic trees, such as pine, from the ETS to encourage native forest planting.
It came after a backlash from the farming sector that too many beef and sheep farms on productive land would be converted to pine, thus hurting rural communities.
But the moves incensed some Māori landowners, and they formed the group, Ngā Pou a Tāne / the Māori Forestry Association, off the back of it.
Some iwi rely heavily on forestry to get income from their last remaining lands, and they argued that to change the ETS would kill that income.
Yesterday, the government confirmed a partial backdown, with climate change minister James Shaw and forestry minister Stuart Nash writing to landowners to say the change is now unlikely.
“While we consulted on options to prevent exotic forests from registering in the permanent forest category by the end of the year,” they wrote, “we have now decided to take more time to fully consider options for the future direction of the ETS permanent forest category.
In a statement to RNZ on Friday evening, James Shaw said the concerns of Māori landowners had been heard, and more time was needed to make sure that feedback was properly considered.
“Work will continue, with ongoing input from technical experts, stakeholders and Māori. On that basis, the permanent forestry category is unlikely to be closed to exotics from January 2023, as was proposed,” Shaw said.
“Final decisions will be taken by Cabinet in due course.”
The chair of the Climate Change Forestry Māori Leaders Group, Chris Karamea Insley, said the government’s letter was encouraging, but it did little to clear confusion.
The chief executive of Beef and Lamb NZ, Sam McIvor, said he was left baffled by the letter.
His organisation today released a statement on its position:
Beef + Lamb New Zealand (B+LNZ) says the Government’s announcement that exotic trees will no longer be removed from the permanent category of the Emissions Trading Scheme (ETS) is a step back from addressing the deeply concerning sale of sheep and beef farms for carbon farming.
B+LNZ is calling on the Government to urgently clarify its plans to address this issue.
B+LNZ chief executive Sam McIvor says last week’s decision came out without context. “In March this year the Government released consultation material that acknowledged significant concerns about carbon farming, specifically the amount of whole sheep and beef farms being sold into carbon-only farming where exotic trees are planted with no intention to harvest.
“While we didn’t think their proposal to change the permanent category in the ETS would fix the problem, at least it was a step in the right direction.
“Now all of a sudden the Government has done a u-turn and we have no indication of how they intend to address an issue they’ve previously acknowledged. The lack of information is deeply concerning.”
McIvor says it seems the Government may be concerned about issues raised during the consultation process. “There were legitimate concerns raised, including by B+LNZ, about missed opportunities under the proposals but we strongly believe these could have been addressed through an exemptions regime.
“In the meantime, however, the rate of whole-farm sales and conversions is out of control. We keep hearing of more and more whole-farm sales for the purposes of carbon farming and this is gutting rural communities and jeopardising the $12 billion income per year our sector generates for New Zealand.
“That’s why in our submission we supported the Government’s option of a proposed moratorium on the entrance of exotic forestry in the permanent category of the ETS to provide time to get the settings right.
“The decision is particularly baffling given that in the same week the Climate Change Commission clearly stated that the Government needs to urgently curtail forestry offsets as too much is already happening. The Commission said 60,000 hectares are likely to be planted in forestry this year alone – that’s far in excess of the 25,000 hectares a year they’ve said is sustainable and necessary.”
McIvor says the solution is likely to involve a range of responses but one key issue must be addressed.
“We urgently need limits on the number of forestry offsets available in the ETS to fossil fuel emitters, in line with what happens in other countries internationally. New Zealand is the only country to allow 100 percent offsetting.
“The irony is that fossil fuel emitters can offset all their emissions without making genuine emissions reductions, but farmers don’t currently get adequate recognition for the carbon-sequestering vegetation on their farms. This is something we’re fighting to get addressed under the He Waka Eke Noa emissions pricing system proposal, although it’s worth noting that farmers won’t get 100 percent of their sequestration recognised under that system either.”
B+LNZ is urgently calling on the Government to make clear how it now intends to deal with the issue of wholesale conversion of sheep and beef farms for carbon farming.
Sources: RNZ; Beef and Lamb NZ