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Forestry in the Emissions Trading Scheme Update - October 2011

PF Olsen has been busy processing pre-1990 NZU allocations for clients. Please note that the deadline for allocation applications closes 30 November 2011. We continue to be surprised at the apparent inaction from some pre-1990 forest owners in regard to these applications.

We repeat: applying for the allocation will have no implication regarding, nor change the status of, your land with reference to the ETS. Not applying for an allocation by the deadline (if eligible) will forgo the opportunity to receive "free" NZUs (most likely forever). Also, if you later decide to establish a forest on land that had regenerating scrub/forest as at 31 December 1989 (but is currently grazed), you could find that the land is classified as pre-1990 forest land. This will leave such land owners in the unenviable position of not being able to benefit from earning carbon credits from new planting, but also having missed out on the free allocation of carbon credits.

A step-wise guide to applying for an allocation or exemption is available here Pre-1990 forest land allocations and exemptions

If you have 100 hectares or more of forest land registered in the ETS (post-89 forest), or the PFSI, you are required to use the Forest Measurement Approach (FMA) to determine the change in carbon stocks in your forests.

Available FMA publications include:

  • A Guide to the Field Measurement Approach for Forestry in the ETS
  • Field Measurement Approach Standard
  • FMA Information Standard

Electronic copies are available on the MAF website. More information on the FMA is available on the MAF website at Field Measurement Approach.

NZUs and European Union CERs continue to languish in the NZ$12-14/unit range (converting the CER at the current exchange rate). Volume of NZU trade is very thin as most holders expect price to rise in the future.