Forestry and the Emissions Trading Scheme

The Zero Carbon Bill is an opportunity for New Zealand to decide how it delivers its part in the global effort while encouraging action by others. The Bill puts a new target in legislation that gives us certainty about our long-term goals. It creates the institutions to help us get there and to hold us to account. It can also put in place the plans we need to respond to the growing impacts of climate change.

Ministry for the Environment

The Government aims to have Zero Carbon Act passed into law by mid-2019. The act will set a 2050 target for NZ's emissions of climate-change gases. The consultation is seeking views on how ‘net zero carbon’ should be defined.

  • net-zero carbon dioxide only – and not other gases;

  • net-zero long-lived gases, like carbon dioxide, and stabilised short-lived gases, like methane; or

  • net-zero emissions of all greenhouse gases.

Consultation also seeks views around how the emissions budgets are structured, the duration of each budget, how far in advance they are set, whether they can be revised (e.g. if the government changes), and what happens if they are not met.

An independent Climate Change Commission will provide expert advice to the government of the day and monitor New Zealand’s progress towards its goals.

Anyone interested is encouraged to make a submission

Price Update

For most of June the NZU price has hovered at around the $20.50 mark. Entitlements have been received by forest owners, but units have come onto the market at a time when emitters have no immediate requirements to buy, and this has kept price somewhat suppressed.

The end of June has seen more interest from the buy side and a tightening of supply, resulting in prices creeping back up over $21.00. We still see very little sell interest at the current market price. Our view mirrors that of market commentators at present that sellers are yet again adopting a “wait and see” approach. Current pricing (as at 2nd July) is around $21.20/NZU.

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