Forestry and carbon credits: farm leaders press for clear plan to address climate impacts

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. Continue reading

New advice from commission on ETS unit limits and price control settings

The Climate Change Commission’s first advice on updating the Emissions Trading Scheme unit limits and price control settings for the next five years was released today, triggering the posting of expert comments from the Science Media Council.

The advice on updating NZ ETS settings will now be delivered annually to the Minister by the Commission.

Under the ETS, businesses that emit carbon must surrender a carbon credit – or unit – for every tonne of pollution they emit.

Commission Chair Rod Carr said confidence in the stability and predictability of the scheme was key to making it effective.

“It needs to be kept up-to-date, so that it aligns with the country’s emissions reductions targets,” Dr Carr says.

“Aligning NZ ETS settings up with our emissions reduction targets will make it easier and cheaper to achieve those goals, and guide us towards a thriving, low emissions, climate resilient economy.”

Compared to current settings, the Commission recommends: Continue reading

Last chance for farmers to have their say on emissions pricing

Beef and Lamb New Zealand is reminding farmers that consultation on the alternative emissions pricing options to the Emissions Trading Scheme (ETS), developed by the He Waka Eke Noa partners, closes this Sunday.

An online form must e completed before Sunday night, 27 March.

Feedback will be analysed in April and May and used by He Waka Eke Noa partners to finetune recommendations.

He Waka Eke Noa partners will provide recommendations to Government by May 31.

After that the government will consider the advice.

If the Government agrees that the ETS is not the place for managing agricultural emissions, farmers will get a further opportunity to provide input on pricing as part of further consultation before the final framework is put in place in 2025. Continue reading

ETS proposals show progress on carbon farming issue

The Government’s announcement of consultation on proposed changes to the Emissions Trading Scheme (ETS) in response to concerns about carbon farming has been welcomed by Beef + Lamb New Zealand as an indication of genuine progress on the issue.

The Government is seeking feedback on proposals to achieve better outcomes from afforestation. This includes:

  • excluding exotic forests from the permanent post-1989 category in the New Zealand Emissions Trading Scheme (NZ ETS)
  • whether to adjust how carbon accounting applies to forests on remote and marginal to harvest land
  • opportunities for improving incentives for indigenous afforestation.

B+LNZ chief executive Sam McIvor says the proposals are the result of sustained pressure from B+LNZ and other groups, including 50 Shades of Green.

District Councils and Local Government New Zealand have also been calling for urgent action. Continue reading

New rules proposed for carbon farming of exotic forests – but ACT wants govt to go further

A shift in government thinking about carbon farming and the Emissions Trading Scheme is reflected in a discussion paper on forestry management issues.

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 scheme and earn New Zealand Units (NZU).

The government is now proposing to exclude exotic species – such as pinus radiata – from the permanent forest category.

Forestry Minister Stuart Nash and Climate Change Minister James Shaw today released a public discussion document that seeks feedback on ideas for better forest management.

Afforestation is a key element of New Zealand’s strategy to meet its climate change targets by offsetting carbon emissions, providing a source of bioenergy, and the replacement of high carbon materials.

But the increasing New Zealand Unit (NZU) price is driving higher rates of afforestation, particularly fast-growing permanent exotic forests. This is raising concerns among some industry groups and community organisations about the risk of permanent exotic forests displacing pastoral farming, and production and indigenous forests. Continue reading

Discussion paper outlines carbon farming threat to sheep and beef sector

A discussion paper released today calls for urgent national policy changes to ensure the increase in carbon farming to meet New Zealand’s climate change obligations does not come at the expense of the country’s rural communities.

The Green Paper by former Hastings Mayor and MP Lawrence Yule, titled Managing Forestry Land-Use Under the Influence of Carbon, calls for a more strategic approach to planting trees and outlines policy areas for urgent investigation to address the issue.

The paper has been released ahead of a workshop next month involving a range of key stakeholders including Forestry Minister Stuart Nash, councils, forestry interests, Beef + Lamb New Zealand (B+LNZ) and Local Government New Zealand.

Mr Yule said the paper outlines the real risk that short-term land-use decisions will be made to the detriment of long-term land-use flexibility, rural communities and export returns. Continue reading

Understanding climate science and emissions pricing

Why does agriculture need to take action on warming? How do targets, metrics and pricing work? What would going into the Emissions Trading Scheme (ETS) mean?

As Beef + Lamb NZ gears up for the agriculture emissions pricing consultation in February, those questions and the application to policy of the issues surrounding them have been put to climate change scientists Dave Frame and Adrian Macey for discussion in a one-hour podcast.

The podcast addresses the fundamentals of climate science as they relate to the farm sector and key considerations such as applying GWP*, the metric that’s getting a lot of attention because its champioons contend it better accounts for the different warming behaviours of short-lived gases such as methane – unlike the GWP100 metric used in international agreements which uses carbon equivalence.

More about the GWP* metric was contained in an earlier story. Continue reading

New report confirms trend of land-use change from pastoral farming to carbon farming

Beef + Lamb New Zealand (B+LNZ) is tracking data on farm sales for conversion into forestry as concerns continue to grow over the unbridled ability of fossil fuel emitters to offset their greenhouse gas emissions by planting trees on productive sheep and beef farms.

These policy settings are estimated to have helped drive the loss of around 800,000 stock units. There are also worrying signs that carbon farming interests are spreading into new areas and onto more productive land.

The latest independent report by Orme & Associates shows that in the first six months of 2021, 14,219 hectares of sheep and beef farmland were purchased with the intent for planting into trees (11,585 hectares of exotic planting and 2,634 hectares of planting of natives for honey).

This data is provisional and is expected to be higher, given there is a long lag in farm sales being formalised and more sales are likely to have occurred in the first six months of the year but have not yet been formally reported. Continue reading

He Waka Eke Noa releases discussion document on farm emissions levies

Two options for how farmers could pay for their on-farm emissions have been released for discussion.

This is a consequence of the government’s announcement in 2019 that the sector would have to start paying for emissions from 2025.

As RNZ recalled in a report today, the industry was given time to develop a way to measure and price them.

The government said if no credible alternative was put forward agriculture would be put into the Emissions Trading Scheme.

RNZ says:

He Waka Eke Noa – The Primary Sector Climate Action Partnership which includes Beef and Lamb New Zealand, Federated Farmers and DairyNZ – today released a discussion document with two options. Continue reading

Investment fund seeks backing to develop carbon sinks

A new fund to develop carbon sinks on less productive agricultural land is being launched today, RNZ reported.

Carbon sinks are anything that absorbs more carbon from the atmosphere than it releases, like plants, RNZ explained.

The fund, known as the CQuest Forestation and Carbon Investment Fund, is seeking $15.2 million to buy up 1500 hectares of land to plant pine trees, and aims to give wholesale investors an opportunity to farm carbon credits.

It is being managed by MyFarm Investments, which said it would also look at opening to retail investment in the future.

MyFarm chief executive Andrew Watters said the plan was to do two things.

“In 20-25 years we will harvest those trees for timber and other products. But in the meantime, we’re doing this really important job of taking carbon out of the atmosphere and putting it into the wood product.

“The benefit from an investment perspective is, we can generate those credits and then sell those credits through the New Zealand Emissions Trading Scheme.”

Watters said there would be good cash-flow returns from year five or six, through to year 15 or 16.

He said the project would look to avoid the controversial practice of using productive land for planting.

“We’re operating on the margin with our activities. We’ll be careful with the properties we select and make sure they’re the lower quality properties,” he said.

Watters said demand for carbon credits was high and expected a good return for investors.

At the most recent auction in the government’s Emission’s Trading Scheme, the government set aside nearly 5 million units, with a price ceiling of $50 each.

But strong demand saw prices hit $53.85 per unit, forcing the government to release its reserve of 7 million extra units in a failed bid to keep prices in line.

MyFarm said it would initially invest in a 465 ha former sheep and beef property in the Tararua district, in the North Island.

It envisaged sequestering (removing) 480 tonnes of carbon per hectare from the atmosphere, generating carbon credits at a cost of between $20-25 per tonne.

As the trees grow to maturity, it aims to sell the credits on the secondary market, where carbon credits have recently been trading as high as $60 per tonne.

Initial property planting is expected for next year.

Source:  Radio NZ