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Angus Kebbell reviews the three options being offered to change the permanent forest category of the Emissions Trading Scheme

Rural News / opinion
Angus Kebbell reviews the three options being offered to change the permanent forest category of the Emissions Trading Scheme
native forest canopy

The Government has put forward three proposed changes to the permanent category of the ETS that would place requirements on participants, especially those with exotic forests. Proposals could also change the way that carbon is earned for ‘transition’ forests – i.e., going from exotic plantings to native regeneration over time.

The further review of the permanent forestry category will be welcomed by many. The options outlined will likely take a few years; we need policies sooner to curb the level of current whole-farm land-use change (40% of farm sales in the last three years have been to ‘carbon only’ businesses). Changes to the permanent forest category are a key way to do that.

It’s likely a combination of the options being consulted on will be required, as well as additional changes to the NZ ETS, the Resource Management Act, and the National Environmental Standard for Plantation Forestry.


Design choice 1

Deciding on what type of exotics would qualify for entry into the permanent forest category. Note that all types of currently eligible indigenous forest could still be entered into the scheme. The options only look at restricting exotics.

This option would put conditions on what kind of exotic forest can be entered into the permanent forest category. The ‘type’ of exotic forest is determined by the species (preferably longer-lived), and/or the characteristics of the land where it is planted. Examples of land characteristics that could be considered include whether the land was Māori-owned, or whether the forest would be planted within and alongside a farm system.

Design choice 2

Change how exotic forests that are going to ‘transition’ to natives have their carbon recognised

This option would create a new and specific carbon accounting method for exotic forests intending to transition to native forest. This is because Indigenous forests and exotic forests store carbon at different rates. Under the current settings, transition forests need to return some of the carbon they gain as large exotic trees are replaced by smaller, slower growing indigenous species (since this reduces the total carbon stored in the forest at that time).

The proposal won’t change the overall number of units that participants end up with in the long-run (after the forest has transitioned to indigenous forest) but it would help reduce the financial risk facing participants.

This option would reduce the incentive to plant large-scale farm conversions. It would also make it easier for farmers to manage the carbon accumulation and loss risks of exotics transitioning into natives.

Design choice 3

Require some, or all, forests in the permanent forest category to meet certain standards.

This option would introduce new rules to ensure on-going management of permanent forests so people can’t just ‘plant and walk away’.

There could be rules for all forests in the permanent category or just those that intend to transition from exotic to indigenous forests. Conditions could include the need for a management plan to ensure that the owner is doing as much as they can to prevent forest decline and carbon loss from pests, fire, or disease.

It is unclear how these new rules would dovetail with the proposed changes to the National Environmental Standards for Plantation Forestry which would require carbon forestry face the same rules as plantation forestry.

Farmers who are already in the permanent category, or wanting to enter vegetation into the category, will need to complete additional management requirements and show how these are being implemented.

This option will increase the burden and cost of participation in the permanent category of the NZ ETS. However, it could ensure that areas of carbon forestry that are currently unmanaged don’t cause problems down the track. It could also provide job opportunities as part of pest and plant management.

The fact that the Permanent Forest Category of the ETS is under review with changes likely, is a step in the right direction to protect New Zealand food production, rural communities and the all important export dollar.

Listen to the podcast to hear the full interview.

Angus Kebbell is the Producer at Tailwind Media. You can contact him here.

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If 40% of farm sales in the last 3 years have been to carbon only businesses, then presumably all the stock-sheep and beef cattle- will either have gone or will go. This destocking will on its own, have a significant effect on methane emissions. 

Perhaps this explains how the sector, including fishing, achieved a reduction of 680,000 tonnes of emissions in 2022(Source Stats NZ). This, coupled with the admission by the IPCC in its AR6 report that "expressing methane emissions as CO2 equivalent of 28, overstates the effect on global surface temperatures by a factor of 3-4". I took this up with Prof. Jim Renwick-one of NZ's leading climate scientists and he agreed. The measure of giving other GHGs a CO2 equivalence over 100 years-GWP100 never made much sense given the much shorter lifespan of methane and has been replaced with GWP*. As he pointed out in his reply to me, "the figure of 50% of NZ emissions coming from agriculture is only correct under the GWP100 approach".-now discredited.

A paper was produced by Professor Myles Allen and a team at Oxford; 'A solution to the misrepresentation of CO2-equivalent emissions of short-lived climate pollutants under ambitious mitigation'.  A further report on this can be found in Nature Geoscience.


Carbon forestry isn't sustainable, it doesn't continue to produce carbon credits. It's basically a debt against the land or an interest free loan.  If you want to do anything in the future with that land other than forestry then you need to pay back the debt.  Carbon needs to be priced at over $200 per tonne and only a portion paid to forestry carbon credits to prioritise carbon reductions instead of offsetting. The scheme needs to be rewritten


No the scheme just needs to have politicians sticky fingers out of it to enable it to function as a market, which is the intention. 

Reductions will follow a higher carbon price as it will become cheaper to reduce emissions than it will be to offset, you just need to let the market function (supply and demand)


Without politicians there wouldn't be a "market". The reality is NZ is already carbon negative as a country. All this ETS crap is just cashflow for the big end town and the climate change industry. 


"Results from Beata Bukosa's research from @niwa_nz confirm New Zealand as a carbon sink. Interesting and encouraging preliminary results of inverse modeling and new measurements in New Zealand #CarbonWatchNZ #ICOS2020SC"

"At the time, the National Institute of Water and Atmospheric Research​ had two atmospheric testing stations, one at Lauder​ in Central Otago and the other at Baring Head​ on Wellington’s south coast.

Niwa researchers could estimate how much carbon dioxide was arriving over the country. And they could measure how much CO2 was found at the two stations. The latter figure was between 30 and 60 per cent less than the former."…

• Recent flux NZ picture: 2017-2019 CO2 sink still present

• New measurements suggest even larger sink

PowerPoint Presentation (


The problem assumption is that these forests are 40% carbon forests. The reality is most will be harvested - I would love to know where the 40% carbon only comes from as some of our forests have been classed as this in reports as we happily prune and thin them - it's pointless discussing this with farm groups as they have almost zero knowledge on forestry, although they seem to have become experts very quickly!! Let the wild assumptions continue. Even some of the so called carbon farmers are tending and harvesting now.

Most unmanaged forests are actually on farms as forest investors are managing their forests while farmers often just walk away as they can't afford to do any management.

I would be more concerned about the reality of farm profitability and face the real issues - not blame everything and everyone for their woes. Here's someone telling the truth from within the tent. He's on the button but will be ignored…


Jack, you say everyone is all of a sudden an expert on forestry. Welcome to the club as everyone is an expert on farming also and has been for a few year's. 

Like you have said for a long time there is not much profit in sheep and beef and the desire (due to the age of farmer's) to change and try new things. Regulation/red tape is a huge cost these day's and hard work. Most of the hard work is the rate of staff change over at regional councils or lack of staff there. 

Talking to a mate in horticulture this morning and he was saying the compliance is getting more and more. More time in the office but work in the orchard still need to be done. He's only young so it's not new to him but ever increasing.

The guy's at top will tell us all how they have grown the industry by so much but that normally does not mean they have grown the profit for the growers.  Look  at Avo's. Growers and marketer's have very different ideas of what is a successful year is and i think there really lies the problem with the primarily sector. 


It depends which category within the ets you have registered your forest: averaging (allows harvest but assumes replanting) or permanent. Production forests are typically in averaging which gives a consistent carbon yield (the average of the 'saw tooth' graph as trees grow, are harvested and replanted)


Interesting that you think most will be harvested. On the coal face right now there are pruned stands being locked up for carbon and not being harvested (even at $170 A grade).  Carbon blocks are going in at non-economic >150 km distances from ports - will those economics change in 25 years?


Jack - your comments as usual uncomfortably correct. The Farmers Weekly column you reference is obviously the perfect scenario. The cold reality is that all his ideas have been tried before. I farmed for 30 years and witnessed many attempts by groups of farmers with drive, ambition and hope to add value whether through bulk supply with meat, branded wool etc. The problem as ever was getting the market to pay. The nirvana of high end premium markets is extremely difficult to achieve as things such as recessions and consumer price resistance play a huge role in value gained. One only has to look at the behaviour of certain large English Supermarkets around NZ Lamb , when suppliers had bent over backwards with all sorts of strictly audited farm plans and then boof , it's over. Look at some of our own Meat Companies bailing on supplier contracts this winter. It's a tough marketplace out there. 

Any wonder I sold to Forestry !! When you exit the Industry you miss your animals and the great days when everything goes well ,but you now look at it from the outside and say to yourself why would you do it !!


I don't disagree with any of these comments and yes it's not perfect. I don't have all or any answers but I think Jezza sums it up well as to the reality of the world. Since we lost our special access to the UK it's been getting harder. 

Even the figure the other day that only 2% of farms are making a profit down from 26% - hangon only 26% when prices were exceptional!! and I would lay a bet that's before drawings in most cases.

Profile is right there are forests being planted in dumb places just like farms are in dumb places.

Marketers want producers to jump through more hoops to appease buyers but at no gain - don't worry every industry has that problem.

In my view we are going to see huge changes where NZ earns income in the next 30 years and it be very different to the past.