Forestry and the Emissions Trading Scheme - May 2014

Price Update

The ETS remains very quiet. NZUs continue to trade in the range of $2.95 - $3.10 per NZU. With ERUs valid in the New Zealand ETS until May 2015, there is currently not a lot of demand for NZUs to encourage higher prices. Emitters with surrender requirements beyond 2015 can pick and choose at which low price level they will procure NZUs to satisfy their future surrender obligations. Those land owners who plan deforestation of pre-1990 forest land after the 31 May 2015 deadline for using ERUs for surrender purposes has passed may consider purchasing NZUs at the current low prices.

ERUs have traded in the range of $0.17 - $0.20. ERUs are valid for surrender until 31st May 2015 and remain the least- cost unit for surrender purposes at present.

CO2 price trend
Recent Carbon Prices - NZ$/t CO2e – Real (CPI adjusted)

The next government review of the ETS is in 2015. Until then no significant changes to the demand for NZUs are expected.