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Guy Trafford settled in to read the Discussion Document on changes to permanent forestry. His summary here may help you understand the issues, and get ready to submit your views. Officials seem to be listening to farmer concerns

Rural News / analysis
Guy Trafford settled in to read the Discussion Document on changes to permanent forestry. His summary here may help you understand the issues, and get ready to submit your views. Officials seem to be listening to farmer concerns
Farm forest

With a bit more of an opportunity to properly view the new “Discussion Document on changes to the permanent forestry component, here is a more comprehensive summary of it.

Signed by (only) the Minister for Forestry Stuart Nash and the Minister for Climate Change James Shaw it occurred to me that two names were missing. The Minister for Agriculture Damien O’Connor and potentially Minister of the Environment David Parker. Hopefully this does not mean that the two latter names are not in disagreement as the document, from a farming perspective, does indicate that the government has (finally) been listening to some of the concerns the rural sector has been raising.

With an estimated return of $50,000 per ha based upon the 2026 ETS intervention price, even dairy farming is only being protected by the fact that sheep and beef land is considerably cheaper. An earlier consultation period on the Emissions Reduction Plan (ERP) last year received 10,050 submissions (between October – November 2021) so the topic certainly has considerable interest.

The Government has given itself to May 2022 to come up with a draft plan so some speedy responses required from this latest consultation. Submissions close at 5pm, 22 April 2022. And need to be sent to

as a:
• PDF, or
• Microsoft Word document (2003 or later version).

As stated, the major change to the forestry component of the ETS is around the rules regarding the introduction of a permanent post-1989 forestry category to replace the Permanent Forest Sinks Initiative (PFSI). This category will reward landowners for establishing forests – exotic or indigenous – that will not be clear-felled for at least 50 years.

Feedback is required on criteria for whether and how exceptions should be provided for forests that consist of exotic species operated under certain conditions (e.g., forests established with exotic species, but managed over time with nearby indigenous seed sources to transition the forest to predominantly indigenous species).

The Government has put out three different scenarios and is asking for feed back on what is preferred and what, if any changes need to be incorporated. For those interested a second document ideally should be read in conjunction with the ‘discussion document”. It is an “Interim Regulatory Impact Statement” … “Managing Exotic Afforestation Incentives and was also published earlier this month.

(Both documents are around the 36 pages, so get comfortable).

The three options outlined are:

Option One: status quo: allow unlimited exotic and indigenous registration in the post-1989 permanent forestry category.

• There are currently no restrictions on the forest species that can be registered in the NZ ETS permanent forest category.

• Under the status quo, persons registered in the NZ ETS as a participant in the permanent forest category would be able to register with exotic and/or indigenous forests.

Option Two: restrict the permanent forest category in the NZ ETS to indigenous forests, except for transfer of existing permanent forest sink initiative covenant holders.

• The Climate Change Response Act (CCRA) would impose restrictions for the permanent forest category in the NZ ETS. A new restriction would be added only allowing indigenous forests in the category.

Option Three: restrict the permanent forest category in the NZ ETS to indigenous forests but allow some exotic forests under special circumstances (including the transfer of existing permanent forest sink initiative covenant holders)

• Like Option Two, persons registered in the NZ ETS as a participant in the permanent forest category would only be able to register with indigenous forests.

Below is a table showing how the three potential options impact upon removals of carbon and their ability to meet our future carbon reduction commitments. As can be seen compared to the current system (where permanent carbon radiata pine etc. forestry is allowed) there is quite a deficiency as to what needs to be done. (Option 2 & 3 are lumped together as reduction amounts are very similar). The different coloured graphs relate to the different ‘reporting periods’ and as can be seen there is a considerable increase in the area going into trees (or coming out of pasture) as time goes by.

The status quo option provides several major problems which the Government now recognises.

  • Officials’ analysis indicates that cumulative NZU supply from forestry is at risk of exceeding demand in the NZ ETS in the 2030s. The NZU price, and therefore the incentive to reduce gross emissions, is likely to be dampened in the future due to higher levels of NZU supply. A lower emissions price would reduce the incentives for gross emissions reductions and defer the cost of transitioning to a low carbon economy to future generations.
  • There are environmental factors to consider in relation to the planting of exotic forests. If not controlled or well managed, they can be detrimental to biodiversity if they are established at the expense of indigenous habitats. For example, exotic afforestation was estimated to be responsible for a 4,000-hectare reduction in indigenous scrub/shrubland that occurred between 2012 and 2018.
  • The impact on rural communities needs to be accounted for as while the gross returns from carbon may be attractive, permanent exotic forestry does little to invigorate communities.

The discussion document identifies another range of issues that will need to be dealt with.

1. How are indigenous forests defined? What happens if forest changes over time, and no longer fits this definition?

2. If forests which no longer meet the definition of indigenous forest are removed from the permanent category in the NZ ETS, how should it be done?

3. If exotic forests are removed from the permanent category in the NZ ETS, what changes should be made to the penalties in the category?

4. Treatment of exotic forests in the PFSI.

The Government also calls for input on how a long rotation averaging accounting forest category should be developed within the NZ ETS that could provide opportunities for forest owners whose land is poorly suited to harvesting pinus radiata at typical harvest ages (e.g., due to difficult terrain, slow growth rates or distance from port). As well as removing the incentives for permanent exotic afforestation, Government wants to increase incentives to plant permanent indigenous forests.

There are also issues around Māori land. Around 230,000 hectares of Māori land has been identified as well suited to forests – and could qualify for registering in the NZ ETS. Of this, at least 146,000 hectares have been identified as marginal for typical production forestry as they are far from ports. Whether the Option 3 which provides for ‘exceptions’ under special circumstances.

Pinus radiata grown on remote and marginal land is likely to be harvested later than other production forests, so will probably store more carbon.

Currently the Averaging accounting sets one average age for each forest type. The average ages, which are set out below, are based on the typical New Zealand harvest age for each forest type:

• Pinus radiata: age 16

• Douglas fir: age 26

• Exotic softwoods: age 22

• Exotic hardwoods: age 12

• Indigenous: age 23

These would need to change under longer rotation systems.

There already examples of longer rotation systems that could include stable carbon sinks once fully established. John and Natalie Wardle’s forest in Oxford, Canterbury spring to mind as a system that incorporates both indigenous and exotic trees.

The issue around how long rotation forests need to be treated is clearly weighing on the government, the below insert lays out the questions they seek answers for:

Other changes ahead are that MPI will be reviewing and updating the tables for sequestration of carbon by different forestry types in different regions. These were last done in 2008 and now dated and are likely to be superseded with new information.

There will be many who will be relieved that the Government is pursuing changes to the Overseas Investment Act 2005 to remove forestry conversions from the streamlined special forestry test.

Other specific questions the government is seeking advice on are:

1. Do you agree with our criteria for managing permanent exotic afforestation? If not, what would you change and why? Designing exceptions (option three)

2. Should we provide for exceptions allowing exotic species to register in the permanent forest category under certain conditions?

3. Are there particular circumstances that you support introducing exceptions for (for example, exceptions for certain species of exotics)? Why?

• What are the likely impacts, risks and costs of allowing exceptions in these circumstances?

• If we allow exceptions for exotic species under certain conditions, should we place additional conditions on the granting of this exception? What could these be?

4. Are there alternative ways we can recognise and encourage these forests, either within or outside, the NZ ETS? (For example, through the resource management system.)

Options to manage permanent afforestation

  • Of these options, what is your preferred approach? Why? Are there other options you prefer, that we haven’t considered?


  •  Do you agree with our preferred approach (acting before 1 January 2023)? Why/why not? If not, what is your preference?

Comparing Option 3a (exceptions by secondary legislation) and Option 3b (exceptions after a moratorium)

  • Do you support exceptions by regulations [option 3a] or exceptions after a moratorium [option 3b]? Why?
  • If we choose to introduce exceptions by regulations, what conditions or criteria should be placed on the Minister in choosing to pursue these?
  • If we choose a moratorium (Option 3b) – how long should it be? Why?
  • Do you think a different type of moratorium (whether it requires a decision to be ended/ continued) would have different impacts? Or do you prefer a different approach?

Implementing changes to the permanent forest category

  • Currently the NZ ETS defines forests based on the predominant species in a hectare. However, forests change makeup over time. Do you think this definition of exotic and/or indigenous forests is appropriate for the permanent post-1989 category in the NZ ETS?
  • What level of exotic species in a forest would be acceptable for the forest to still be classified as an indigenous forest, and registered in the permanent post-1989 category in the NZ ETS?
  • If forest changes from indigenous to exotic while registered in the permanent category, do you think it should be removed from the category

(Option 1), or be treated as indigenous (Option2)? Why? Are there other options we haven’t considered?

  • If we choose to remove forests which have become predominantly exotic over time from the category, how do you think we should do this? Why?
  • If exotic forests are removed from the permanent category, what would an appropriate penalty be for clearing the forest before the end of the permanent period? Do you think the current penalty needs updating?
  • What do you think the impacts of introducing a long rotation category as proposed would be?
  • Do you agree with the proposal to allow exotic forest land in the PFSI to transition into the permanent post-1989 forestry activity, or would another approach be more suitable?
  • What ages should be used for the long rotation category under averaging accounting

Forest Owners CEO Phil Taylor on RNZ’s 9-noon believes there may be unintended circumstances of locking out permanent exotic forestry and that the time urgency (of meeting our commitments) heavily favours radiata and believes the “practical ability” of planting indigenous forest may impede progress. Radiata is the “rocket fuel” for sequestering carbon.

Time frames for the decision process is below.

As can be seen, when the detail of the problem is examined more closely the issues reveal more complexity. However, given the depth of feeling of many within the farming sector of government imposing regulations, this is a good and welcomed opportunity to have input and help shape the future.

P2 Steer

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My option would be to allow exotics for permanent  forests , but require planting of natives at at the same time , and pruning and thinning of the pines to allow the natives to come through over 50 years . 


Are there better options than exotic plantations for rapidly drawing down anthropogenic atmospheric gas?


None that I've heard of.

Man made carbon capture tech might fill that hole, but is in itself an inefficient energy intensive option as it currently stands.


I was wondering if it was even worth commenting but here goes as someone who have been in the forest space for 40 years. I have been in native forest – measured and assessed large native areas that was the first and probably only time these forests will be done so I have measured some of the best remaining forest we have, plus have planted and measured many 1000s of ha of exotic and native regeneration.

The following are the carbon sequestration average values across NZ from data collected from 1,000s of ha across NZ over the past 12 years for the ETS. This was published by MPI. It shows the average for NZ – some areas will be higher some lower.

Carbon (tonnes) stored at age 30 per ha

Radiata                               1,125

Redwood/Cypress              845

Douglas Fir                         763

Native                                 189

Now I can already hear the Dame Annes and Co howling in protest. Unfortunately, this is the facts. Yes, you can grow plantations of native kauri, totara etc on very fertile soils at great cost and get much higher numbers. We do not have large areas of these soils available for forest and the cost is huge - $20 to $40,000 per ha to finally get there. Who has this spare money versus hospitals etc etc.

It doesn’t mean we should not do natives – we just need to be honest about what they will do and the cost.

Alongside this we have a need to reduce emissions within the next 10 to 20 years – we do not have a century to wait.

If you want to suck out carbon fast the answer from above is obvious – we can still do native but need exotic as well.

On the idea we won’t have any permanent exotics – well kiss goodbye to any chance of reaching our Paris goals and be prepared to send billions to some corrupt country to plant fast growing exotic trees to do the job – yes they are corrupt as I have worked in these countries.

We need to have a more nuanced view here. There is a place for permanent exotics. Iwi own huge areas of land suited to this along with farmers.

We need to provide them with options of what to use and have a set of rules around where, how and what needs to be planted. This isn’t rocket science as it has been worked out already – no one listens to forest ecologists or the century plus of experience on this work.

I know a lot of Iwi who want permanent exotic on scale for their lands – they can’t do production forest or farm – to have a bunch of pakeha farmers and academics tell them what to do is beyond belief in 2022. These people aren’t stupid – they are well educated and understand their land and what they want for their people. For once let them decide what to do.

Farmers are the greatest beneficiaries as well – in the ETS 80% of the participants are farmers and growing fast – 1,800 and growing fast. Many have wide spaced poplars and exotic trees in places they can never be harvested – they will be stopped. Its the biggest injection of money into rural NZ in history for a great environmental outcome for everyone. MASSIVE own goal to farmers.

The farmers who hate trees- yes some do Im afraid of any type – need to stop acting as communists and allow people to choose what they want to do.

We need to equip farmers/iwi/landowners with as many tools as possible to make decisions on good landuse.

Removing permanent exotic and having only averaging will encourage harvesting on areas that should not be harvested at all.

I would propose we need to allow any landowner to plant up to 20% of their property in permanent exotic – after that you need a consent and need to show its not profitable for production forestry or farming. There is ample science showing there is over 1 million ha needing either native or exotic trees with no harvest. This will stop whole farm conversions to permanent exotic as well (even though this is very small but Im not going into that rabbit hole).

We need science around this not some small-minded local politician "I reckon" thoughts.

Have an NES for Permanent exotic setting out simple rules about management etc – this all exists now so is not hard.

We need to reduce gross emissions and stop them – trees buy us some time to do this – they aren’t the whole answer but its natures answer. Its not all exotic or native but a mix – the CCC report sets this out very well.


Thanks for your thoughts Jack Lumber. The government proposal appears reactionary and poorly thought out next to what you articulate above, particularly in the context of the significance of climate change and what informs the whole point of ETS. 


"yes they are corrupt as I have worked in these countries." Exactly why your planting out productive farmland is an utter waste of time. You really are that naive to think that other countries will be corrupt about tree planting but squeaky clean about all other aspects of the climate change industry? Keep food production out of your vain glorious climate changing schemes.

"Not a single G20 country is in line with the Paris Agreement on climate, analysis shows"…



 It's possible the 'international order' will mandate climate change mitigation through trade embargoes/sanctions.

Its hard to fathom NZ being carpeted in pine trees, but if Guys reference to 50k/ha return is correct I guess you could see how it could potentially happen. But as Jack Lumber points out not all pasture farmland in NZ is productive, there are even pockets of land within 'productive' farms that would be better suited in trees to draw down carbon. 


Given no countries are meeting their Paris targets I think trade sanctions are moot. Agree a lot of farms could be planted partly in trees but the market is skewed such now that farms that are heavily planted in trees and shelter belts are still being snapped up by corporate carbon bludgers.

Sheep and beef has been priced out of the heavily subsidised, artificial "market" that the government has created. SMP's on steroids. If these heavily planted farms were paid the carbon cash for their shelter belts and soil carbon perhaps they may be competitive with corporate plantouts but given the huge cost of fencing in farm forestry situations I doubt it.


I don't like a scenario of corporate carbon bludgers disconnected from rural NZ either. However why wouldn't sheep and beef farmers embrace this potential, and improve the productivity of their land through diversification. It doesn't mean a blanket conversion to exotics (or natives), just targeted land use decisions.


I agree - but  I am seeing heavily planted farms that have done multiple planting still being hoovered up by corporate buyers. The artificial market created heavily favours corporate carbon because shelter belts and soil carbon are excluded, prohibitive fencing costs and the risk of the farming business declining economy of scale. A sheep farmer can no longer buy the neighbour to increase farming economy of scale.


The sheep cocky might be able to buy the neighbors if he diversified income streams by planting out the unproductive country and enrolling in the ets? If it’s as lucrative as guy’s article suggest the bank should fund it  

Being part of a family farm I’ve always struggled with the economies of scale concept. It seems to lead to corporate domination in the end. 


Banks are now starting to fund this for farmers

The changes I sugguested favour farmers and not corporate buyers

I have 100s of farmer clients all planting and changing some land because they cant make a proper profit doing what they do now. They are still farming animals but are more profitable and dont need to buy more land to be more profitable. Its allowing family farms to survive.

If I look at whats being planted over 50% now is being done by farmers anyway. If we set a limit of 400,000 ha of exotic well farmers will get over 50% and continue to farm animals. The balance will allow some scale to wood production.

If you look at Google earth most of NZ is, and will be still light green and in the scheme of things this is a storm in a tea cup.

If you are worried abut losing farm land well try 1 million ha plus of native on pasture land because thats what some are wanting.



Farm forestry was profitable long before the ETS was dreamed up. Now we have perverse outcomes where even pruned stands are locked up for carbon. A storm in a teacup - just that it is a multi-billion dollar tea cup -  while poverty soars.


Only while the price of C is high. Hopefully the ets drives change to a low c economy and the price will reduce . 

Rowen Reid, a well known Australian farm forester advocates for c to be locked up in wood products. 


Locking up C in wood products one thing - but things have indeed become perverse when it is productive farmland and pruned pine forests being locked up. Especially when Jacklumber admits other countries are corrupt - we are locking up for what practical end?


Permanent forest allows some harvesting, ás long as it's replanted. Probably much like the farm above. There is probably potential to make good money growing valuable timbers that justify the extra cost of selective logging.


I agree with you profile, as far as productive land goes. Obviously where farming or production forest is viable that is what should happen. There is remote country with sever  erosion issues that produces very little and in all honesty should never have been farmed. These areas are perfect as carbon sinks and exotic is the obvious way to start the process of forest cover.


Consumer pressure more likely to have an effect than sanctions. EC already taxing less compliant countries products. That no country is meeting it's target is a red herring, few countries are doing little to nothing.


Paying $15 odd a tank to negate this potential consumer pressure risk seems a tad expensive. Cutting our fuel price to make our agricultural exports more competitive may outweigh this perceived risk?


You aint seen nothing yet . Opec has shown they now see no point in pumping out cheap oil.they will restrict supply to keep the price up , becuase they see oil been phased out in the future. We should learn from them . 


Jack,  to have a bunch of pakeha farmers and academics tell them what to do is beyond belief in 2022. You may be surprised how many 'pakeha' farmers also have a whakapapa. Reverse racism at play here?


No. One group wants something another dosnt. Let each group choose what they want. If you don't want to do it - don't do it but respect the rights of others to choose.

Iwi aren't asking anyone else to do it. Just allow them on their lands that aren't viable for farming or production forest if they so choose.



"If you don't want to do it - don't do it but respect the rights of others to choose" to not pay for your omnipotent climate changing boondoggles. Every time I fill the tank just let me decide if I want to give $15 to the landed gentry to plant pine trees or spend it on food/rent/healthcare/futile attempt to change the climate(!). Fair enough?


respect the rights of others to choose.  So iwi want the right to choose what they do with their land, but also want a right to say what I can do with my land via resource consents, the proposed 3 waters etc.  


There is alot of iwi land that is landlocked , or has poor/disputed access at best . I have heard of proposals to chopper everything in (seedlings , planting crews, etc ) to some landlocked blocks. exotic permament  is probably the only option that makes this viable.


Planting Kauri in particular may be a mistake, given they might all succumb to Kauri Dieback, in which case the land would need to be cleared and replanted, or the carbon credits from them refunded at (likely) far higher price than they qualified for when they were earned.