Forestry and the Emissions Trading Scheme

Following on from last month’s Wood Matters, the USA and China have ratified the Paris Agreement, together making up around 39% of global emissions. Many other countries were likely awaiting the commitment of the world’s largest emitters before ratifying the Paris Agreement themselves. Further ratifications are expected as the year progresses, including from New Zealand. The Paris Agreement is not binding until it is ratified by 55 countries representing 55% of global greenhouse emissions.

Locally, the annual New Zealand Institute of Forestry conference was held in Dunedin, with a number of PF Olsen staff attending. Of relevance to the ETS, the Ministry for the Environment presented a session to update the ETS review, the key points being:

  • Reductions to NZ emissions are required if we are to (have any hope of) meeting the target of 30% below 2005 levels by 2030.
  • Domestic forestry has an important role to play - every tonne of sequestration delivered through forestry avoids the need to purchase a reduction from overseas.
  • The targets set for NZ under the Paris Agreement pose a significant challenge for New Zealand and new forests will be crucial in assisting.
  • International units will be required, and the environmental integrity of these units will be crucial. Submissions as part of stage II of the ETS review have been analysed and the Minister is currently deciding on the next steps.

New Zealand Emissions Trading Register

The New Zealand Emissions Units Register (NZEUR) has been replaced with a new platform, the New Zealand Emissions Trading Register (NZETR) which was launched on the 29 August.

If you are the account holder or a primary representative on an existing NZEUR account, you will have received correspondence from the EPA. To gain access to the new site you will need a government RealMe login, and a migration code that will have been sent to you.

Price Update

NZUs are currently trading at around $18.80 per NZU which is a 5 year high.

The figure below shows the recent carbon credit prices for EUAs, CERs, NZUs and ERUs. Note that from 1st June 2015 only NZUs or New Zealand AAUs are valid units in the NZ ETS. EUAs are valid units for trading within the European Union.

Figure 1: Recent Carbon Prices - NZ$/t CO2e – Real (CPI adjusted)