Forestry and the Emissions Trading Scheme

Nigel Brunel of OMF recently wrote an opinion piece for the New Zealand Herald on the reasons why he believes the current NZ Emissions Trading Scheme is not fit for purpose, and why it won’t get us to net zero by 2050. I think it is a good summary of the challenges we face going forward and is worth a read. The key message from Nigel:

For New Zealand to be net zero by 2050 will require significant changes. Addressing agricultural emissions is the big challenge as well as changes to our transport system. Planting trees is not a solution - it’s a transition. If we have not found the cure for agricultural emissions and changed our transport system by the time our forest sinks are full of carbon in 30 to 50 years - we’ll be in the same place we are now. We will need more weapons in the tool kit than the ETS. We will need significant investment and innovation to create the technological advancements to solve these challenges.

The full article can be found here.

Price update

NZU prices climbed throughout the month of August and into September, trading above the $25.00 mark for a short period.  NZU prices have remained steady into October, trading within a range of $24.75 - $25.00. The market seems quiet at present with little interest on the sell side.

Some forest owners are however deciding that the time is right to sell long-held pre-1990 units and re-invest this money elsewhere in their businesses. These tend to be small holdings though, with the bigger players generally happy to sit and wait.

The market may not move much from here until more progress is made towards new supply settings and structural changes to the ETS later in the year.