Under the New Zealand Emissions Trading Scheme, for participants with less than 100 hectares registered, New Zealand Units (NZU’s) are allocated according to the standard Te Uru Rakau lookup tables. Pinus radiata forests receive units under regional averages while Douglas Fir, Exotic Hardwoods, Exotic Softwoods and Indigenous forest receive units under national averages (Figure 1).
Figure 1 – ETS Lookup Tables for NZU allocation per hectare (showing Bay of Plenty Pinus radiata and national averages for all other species).
All forests for each species receive NZU’s at the same rate regardless of how sparse or slow-growing they are if they reach the minimum definition of a forest:
“Forest land is at least one hectare of forest species. It has, or is likely to have:
- Tree crown cover of forest species of more than 30% in each hectare.
- Average width of tree crown cover of at least 30 metres.”
Poplar/willow plantings onto pasture will be eligible to enter the ETS as long as the area and spacing meet the minimum eligibility requirements. At these specifications, it is possible to continue livestock grazing with a minimal loss of productivity. These plantings also offer soil conservation benefits. Poplar/willow plantings are included under the exotic hardwoods category and therefore receive a high rate of NZU allocation relative to other species. After 35 years, a forest owner will have received 729 NZU’s per hectare. At today’s price of $35/NZU (September 2020), this equates to $25,515 or $729 per year. When combined with grazing revenue, poplars/willows offer a good land-use option for ETS participants.
Would you like to know more about the New Zealand Emissions Trading Scheme, contact our team.