Post-Quake Farming Field day Adrian Loo Date: October 2019
Introduction www.forestmanagement.co.nz
One Billion Trees www.forestmanagement.co.nz
One Billion Trees Programme (1BT) www.forestmanagement.co.nz
1BT - Direct landowner grants www.forestmanagement.co.nz
1BT – Application process www.forestmanagement.co.nz
1BT Criteria Right tree, right place, right purpose Minimum size: Right to plant: you must be the owner of the land, Indigenous mix = 1 ha or Mānuka /kanuka, regeneration and Exotic = 5 ha you must have the right to plant on the land. Maximum planted area: 300 hectares in one year. Planting on forest land. The land must: • not be 'forest land' at the time of application Minimum canopy width: • not have been forest land for the Plantings/establishment must have an average last 5 years minimum canopy width of 30 meters. www.forestmanagement.co.nz
1BT farm eligibility Mapping is important! www.forestmanagement.co.nz
Emissions Trading Scheme (ETS) The Emissions Trading Scheme is a national response to climate change • Earn or pay for carbon credits (NZUS) • Purpose to reduce our emissions • 30% below 2005 levels by 2030 When NZU’s are awarded – they go into their NZEUR account. They sit in this ‘bank account’ with no value until the are sold to market. Emitters buy NZU’s to surrender to the Government • Industrial Processes ( Iron, Lime, Glass, Gold ) - EMITTERS • Liquid Fossil Fuels ( Petrol, oils, diesels, etc ) - EMITTERS • Stationary Energy ( Electricity generation ) - EMITTERS • Waste ( Landfills ) - EMITTERS • Processing, exporting animals ) - EMITTERS
Emissions Trading Scheme (ETS) NZUs are sold/brought on trading platforms • Usually large parcels • Can buy/sell at SPOT pricing or forward sell/buy NZU price has been historically volatile • Recently stabilised close to the $25 cap • Future projections have been positive for NZU prices
ETS – Land classification Forest Land is either “ Pre90 ” or “ Post-89 ” Post-89 is land that was not in trees after 31 st December 1989 Pre90 is land that was in trees before 1 st Jan 1990 ▪ ▪ Have a choice to enter the ETS ▪ Pre90 was given a one-off payment of carbon credits ▪ Not entering = zero risk = zero reward ▪ Have to replant Pre90 area, if not liable for a fine 2019 1989 2019 1989
Measuring Carbon Under 100 ha Over 100 ha
The new ETS – “Averaging” Due to the complexities and hesitance to sell NZUs – the ETS for forestry is changing…. • One-off allocation of NZUs • Each year up to age 18-20 Will you be in the new or old scheme? • All forests planted in 2021 will be in this scheme by default • Any forest planted 2019/2020 will have the option to stay under the existing or transition What will the average age be? ▪ Depend on species and harvest age ▪ Year 18 suggested for harvesting 25-35 year old radiata ▪ The longer you leave trees standing the higher the average
Averaging – Advantages/Disadvantages Advantages ▪ No requirement to pay back any loss of credits ▪ E.g. harvesting, fire, wind requires no pay back ▪ Only required to replant ▪ NZUs sit in the owners account and can be sold when it suits ▪ Reduced costs/complexity for Owners and Managers ▪ More likely to sell them Disadvantages ▪ Only receive carbon for part of 1 forest rotation ▪ Second rotation is a timber only investment
Confidence in the ETS Paris Agreement Ratified Zero Carbon Act when passed $25 Fixed Price Option to be removed 2020, when auctioning begins, no later than end of 2022 Introducing a Price Floor Productivity Report (300+ page report with projections) Forestry NZ’s ‘only easy fix’ 2 for 1 deal no longer
Thank You www.forestmanagement.co.nz
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