Forestry and the Emissions Trading Scheme

Proposed additional amendments to Forestry ETS Regulations

Te Uru Rakau has begun consultation on changes to ETS Forestry Regulations that determine how recent ETS changes will be implemented. Key info being consulted on includes:

  • Structure of age bands for averaging
  • How to report second and subsequent rotations
  • Changes to the definition of sub-areas
  • Other minor and technical amendments

The consultation document and other supporting info and fact sheets can be found here. Submissions close on 9 April 2021.

First ETS auction

The Governments first scheduled auction of NZUs was completed on 17 March 2021. All 4.75 million NZUs were sold, with a clearing price of $36.00/NZU. This suggests that the “Confidential Reserve Price” rushed through Parliament prior to go-live was set relatively close to the Fixed Price Option of $35.

Of the 40 parties that participated, 30 walked away with NZUs. Bids totaled 11.6 million NZUs so there was significant interest overall.

Price update

NZU spot pricing dropped as a result of the above auction clearing at $36.00. Pricing has stabilised (for now at least) at around $37.00 so still a reasonable premium above the auction result. Perhaps there may still be some downward pressure to come, especially if successful auction bidders look to flip units to make some quick cash.