Afforestation Grant Scheme

An initiative to address climate change

The Afforestation Grant Scheme (AGS) is one of the new initiatives announced by the government to address the effects of climate change.

Under the AGS the Crown will provide money for new planting of tree species including Radiata pine, Douglas fir, Redwood, Cypress, Eucalypt and indigenous species. In the public pool applicants can tender for as much funding as they wish but tenders are rated on the three specific benefits and the tendered price.

How does it work?

Successful tender applicants will sign a grant agreement which will be valid for a term of only 10 years. Over this period the Crown will accumulate the carbon credits and will be liable for any carbon losses due to fire, wind or other natural disaster. After 10 years the agreement ends and the forest grower is then free to choose to enter the ETS, harvest or change the land use.

Tender rounds

The first tender round closed on 30 June 2008. PF Olsen Ltd prepared one application for a Rotorua client and this application has been approved. In total $927,000 for planting 447 hectares was approved from the first tender round.

The second tender round closes on 31 October 2008.

Advantages of the AGS

The AGS has several advantages:

  • The tender application process is easy with a simple form to complete.
  • Application levels appear relatively low which means you should have good chance of success.
  • You have an even greater chance of success if some of the land has a Land Use Capability class of VIIe or worse, if the Regional Council requires forest cover, if forest cover will improve the water quality and if bio-diversity will be enhanced.
  • The agreement could be terminated early by repaying the grant and interest. This means that you could then deforest or enter the ETS (MAF are still to clarify this point).
  • The minimum application size for the AGS is only 5 hectares.

Attractive for low-sequestration species

The AGS is particularly attractive if you intend to plant low carbon sequestration species (such as some of the indigenous trees) as they sequester little carbon in the first 10 years. Of the public AGS pool, 30% is set aside for low carbon sequestration species.

Worthy of consideration

Given these benefits, if you have eligible land, want to do some tree planting and have doubts about some of the risks associated with the ETS, you should consider applying for an afforestation grant. To make it easy, PF Olsen can manage the whole project for you, from applying for the grant to planting and looking after the trees.

Next steps

If you want specific carbon forestry advice or wish to get a carbon forestry project started, contact your local PF Olsen representative or Freephone 0508 PFOLSEN (0508 736 5736), or email info@pfolsen.com, or visit our website www.pfolsen.com.