Annual service charges paid by forest owners with trees in the Emissions Trading Scheme (ETS) will be cancelled for the 2023 – 24 year. New Zealand Forestry Minister Hon Todd McClay announced the ETS change while outlining the Government’s vision to grow forestry as part of his address to the Fieldays Forestry Hub. Source: Timberbiz
Minister McClay said the government wanted to rebuild confidence in forestry, noting that the charges imposed on growers for administering the ETS felt excessive, with insufficient transparency around them.
The introduction of a series of initiatives supporting forestry and wood processing’s growth was also announced by the Minister during his address, including four key priorities to drive more positive outcomes across the supply chain.
These included encouragement of economic growth through forestry and wood processing jobs and exports, delivering low emission solutions and products, supporting land use resilience, adaptation, biodiversity and social benefits; and providing carbon removals to support climate goals.
New Zealand Forest Owners Association chief executive Dr Elizabeth Heeg welcomed the news removing the ETS charge and supported a more collaborative relationship with the Government to grow forestry in New Zealand.
“We look forward to working with officials to ensure that the setting of ETS charges is done with transparency, efficiency and reasonableness,” Elizabeth said. “It has been a challenging time for forest owners. The encouragement from government to add more value domestically and address the climate crisis will go a long way in helping the sector grow revenue and jobs for New Zealand.
“New Zealand’s forests – plantation, native or otherwise – are the only tangible means we have at present for mitigating climate change and meeting our 2050 emissions target.
“Amendment to the administrative costs forest owners face for forests entered into the ETS will ensure forestry continues to be part of the solution to reducing our nation’s emissions.
“We agree with the Government that transparency and collaboration is key and we look forward to helping them deliver their priorities.”
The Forest Industry Engineering Association (FIEA) also backed the move.
“With our sector delivering the most carbon-friendly set of exports and benefits to land use all while reducing New Zealand’s carbon emissions compared to other materials, it’s great to see Government showing it wants to grow the sector. Everything we do for industry aligns with the intent of today’s vision from the Minister,” FIEA events director John Stulen said.
Government’s vision to grow the forestry sector aligns well with FIEA’s events:
- Spurring economic growth through jobs and exports; (ForestTECH)
- Delivering low emission solutions and products; (Wood Residues)
- Supporting land use resilience, adaptation, biodiversity & social benefits; (Wood Residues and Environmental Forestry)
- and
- Providing carbon removals to support climate goals. (Carbon Forestry) Annual service charges paid by forest owners with trees in the Emissions Trading Scheme (ETS) will be cancelled for the 2023 – 24 year.
Ekos a New Zealand company that works with environmental financing also welcomed the statement by Forestry Minister McClay.
“This is a good day for native forests. By removing this crazy service fee on native forests in the NZETS we can now restore more habitat with carbon funding,” Ekos CEO Sean Weaver said.
Ekos specialises in using carbon credit revenues to pay for restorative forestry projects. In this way it can finance forest conservation without needing government grants or philanthropy. Ekos forest restoration projects have been hampered in recent years by changing government policy and a new service fee imposed in 2023.
“I could never understand why the government encouraged native plantings one minute and the next minute would financially penalise native projects and make them harder to get off the ground”, Weaver said.
“Native reforestation projects are financially difficult enough as it is because native trees tend to grow quite slowly. But this service fee – we called it the ‘MPI Bull**** Tax’ in our spreadsheets – just made everything much worse and stopped many of our projects from being financially possible.”
