New Zealand government implements forestry carbon trading system cost recovery scheme
On 21 September 2023, the New Zealand government announced its final decision on the proposed cost-recovery charges for the second phase of the Forestry Emissions Trading Scheme (ETS) service.
Despite strong and largely unanimous opposition from industry, including PF Olsen, the government decided to implement its original proposal almost unchanged. The only concession it made was to waive the new annual fee of $30.25 per hectare for native forests less than six years old.
This new annual fee alone represents a significant increase in the annual cost of ETS participation. Particularly problematic are ETS participants (both current and future) that are already on the verge of financial viability, such as shifting production forests and permanent native forests with little or no marketable carbon.
ETS participants wishing to avoid annual costs must apply by 18 October 2023 to remove all of their post-1989 woodlands from the ETS and repay the full balance of carbon credits issued to their woodlands, including any carbon credits that may have been been sold or retained by the previous owner.
Please note:
+ The option to opt out of the ETS will remain available until after 18 October 2023.
+ Forestry ETS participants who wish to remain in the ETS but wish to minimise the impact of the new annual charge may also choose to remove some of their post-1989 woodland from the ETS.
