A quick update for land owners of Pre-90 forest, as it relates to the NZ Emissions Trading Scheme. By now you have received the second and final tranche of NZUs for your Pre 1990 allocation. These units have been transferred into your holding account from the Crown. If you are a Primary Representative on your holding account you would have received an email regarding this transfer. These NZUs, along with the first tranche of the allocation will remain in your holding account until you chose to sell or use them to meet a future liability. These Pre 1990 NZUs can be sold tax free.
What Happens Now?
Basically nothing further is needed or required unless you chose to deforest your forest. Please remember deforestation is a change in land use out of forestry and is NOT the same as harvesting. If you harvest your forest and then replant or let it revert naturally to a forest no action is required. However, following harvest if a forest is not re-established after a certain period and to a certain stocking deforestation may have be deemed to have occurred. Please refer to further information at this link on the definition of deforestation provided by Ministry of Primary Industries (MPI).
Changing Land Use/Deforesting
If you are looking at converting your Pre 1990 forest land to an alternative land use, such as pastoral farming now could be considered the time given the relatively low price of replacement units. Landowners of Pre 1990 forest that chose to deforest are required to pay units equivalent to the emissions from their forest and there is a deforestation obligation process to follow – this will be a lot more than the amount of units received under the allocation. Offsetting is another mechanism that provides Pre 1990 forest landowners the opportunity to convert their forest to another land-use without deforestation liabilities, provided they plant an equivalent new forest elsewhere. Feel free to contact Interpine if you are interested in finding out more about deforesting your forest and changing land use.
More Information
If you are interested in finding out more about selling your NZUs, deforesting your forest and changing land use, or you are looking at harvesting your trees and want to make sure you avoid accidently breaching the deforestation rules please contact Interpine or contact the Ministry of Primary Industries (MPI), formally MAF on 0800 254 628 (Option 3), or email at climatechange@mpi.govt.nz.