Forests are a key component of the effort to reduce emissions because trees absorb carbon dioxide as they grow, lowering levels of greenhouses gases in the atmosphere. The amount of carbon dioxide stored in the forest can be accurately predicted and measured, resulting in carbon forests that represent long-term, quantifiable, physical removal and storage of atmospheric carbon dioxide.

New Zealand is the only country to date to include forestry in an Emissions Trading Scheme, allowing landowners with eligible forest of any type to earn carbon credits in return for storing carbon. If you have an area of land that was farmed in 1990 and is no longer farmed, is scrub or regenerating bush, or has been planted in exotic forest you should be banking credits. We guide forest landowners through the options open to them under the New Zealand Emissions Trading Scheme and Permanent Forest Sink Initiative, including carrying out the mapping and forest inventory work required to claim your carbon credits. Despite the current review of the ETS, forestry carbon credits can be claimed now.

Carbon credits from forests can be used to generate annual cashflow, as an investment, to offset emissions from agriculture or energy use, or as a hedge against future carbon prices. Contact us now to get started on putting carbon to work for your business.

Post-1989 ETS forests

Under the New Zealand Emissions Trading Scheme (NZ ETS), exotic forests planted after 1 January 1990 are known as post-1989 forests. Membership of the Emissions Trading Scheme is voluntary for post-1989 forest owners. The number of carbon credits that can be claimed from the forest is in proportion to forest growth and associated carbon sequestration (storage) rate; the carbon sequestration rate varies according to tree age, species, climate and so on. Fast-growing species will absorb more carbon than slow-growing ones, and trees absorb different amounts of carbon at different stages of their life cycle.

Claiming carbon credits from post-1989 forests creates a range of opportunities for forest owners, ranging from increasing the flexibility of the forest asset from a single-use asset based on long-term timber production to a multi-use asset that can return an annual dividend in the form of carbon credits, to using forests to manage emissions from related businesses to achieve 'carbon-neutral' status.

We work in partnership with forest owners to design a carbon forest strategy that complements both long- and short term objectives, as well as maximises returns and streamlines costs. We aim to provide an intelligent, responsive service that allows forest owners to move ahead in the carbon business with confidence.

These credits are taxed in the year that they are sold but do not attract an interim tax obligation if they are held for sale or offsetting in future years.

Under the New Zealand Emissions Trading Scheme (NZ ETS), exotic forests are divided into pre-1990 forests and post-1989 forests. The short story is that pre-1990 forests are not eligible for carbon credits and post-1989 forests are eligible for carbon credits, but there is a one-off opportunity for owners of pre-1990 forests to claim some carbon credits under the Forestry Allocation Plan. To claim credits from pre-1990 exotic forests, landowners need to register their forests and submit an application before a deadline (not yet set) early in 2010. We help with forest registration and carbon claims on a commission basis - we get paid when you do. Contact us to get the credit you deserve from your pre-1990 forests.

Under the current Forestry Allocation Plan, a total of 55 million NZU carbon credits will be issued to pre-1990 forest owners. These credits have a current market value of about 1.1 billion NZ dollars (at $20/NZU).

21 million NZUs will be issued and can be used immediately to offset emissions liabilities (from changing land-use from forestry to grazing land, for example) or to sell.
34 million NZUs will be issued at the same time but will be post-dated so that they cannot be used or sold until after 2012.

Although pre-1990 carbon credits have the appearance of a wind-fall, fewer carbon credits will be issued per hectare than forest owners will be required to hand back to MAF if the land is deforested. These credits are tax-free.

The Permanent Forest Sink Initiative is a scheme designed for long-term carbon storage in permanent forests. Unlike the Emissions Trading Scheme, there is no allowance for large-scale harvesting of the forest and forest registration includes a 99-year contract for carbon sequestration. Both indigenous and exotic post-1989 forests are eligible to earn credits.

Because timber production is only a minor contributor to forest value over the long term, Permanent Forest Sink forests often include slower growing, but long-lived, tree species or a mixture of species. This scheme is well-suited to naturally regenerating indigneous forests, in which carbon sequestration goes hand-in-hand with increased biodiversity, erosion control and water quality improvements.

To be eligible for credits, the land must be retired from farming and have, or be likely to have, at least 30% cover of forest species that will reach a height of five metres at maturity. For example, if a gorse- or tussock-covered hillside were left to grow, we can expect that in time (over decades) we will see species like manuka and beech come through, thus allowing us to claim carbon credits from it immediately.

We actively evaluate your property and measure the carbon sequestration (storage) rate of your carbon forest. Once a measured carbon sequestration rate is established by scientific work, a revised claim can be filed that covers previous years for which the number of carbon credits have been under-estimated.