Forestry companies say the Government wants them to pay big administration costs which would leave less money available for fighting climate change.
So, four large organisations are going to court to try to block financial charges they call "excessive, unreasonable and disproportionate".
They say in some cases, the cost on individual forest owners will be $1 million a year.
The money is being sought by the Ministry for Primary Industries (MPI) and is intended to pay administration costs of the Emissions Trading Scheme (ETS).
But the foresters say using their money for this purpose would undermine climate action and put Iwi, landowners and farm foresters under significant financial pressure.
The parties to the court action are the Climate Forestry Association (CFA), the NZ Institute of Forestry (NZIF), the Forest Owners Association (FOA) and Ngā Pou a Tāne – the National Māori Forestry Association.
They represent the owners of more than 300,000 hectares of local forest, and they have filed a claim for a judicial review in the High Court.
CFA chief executive Andrew Cushen says the proposal will harm a sector that creates jobs and revenue for the regions.
“As well as piling enormous costs onto an industry that many local businesses and communities rely on, MPI’s new fees will disincentivise climate action,” Cushen says.
The NZIF and the FOA share these views and add the demand for payment could devalue land prices by $500 a hectare.
In addition, Ngā Pou a Tāne Chair Te Kapunga Dewes says the fees are in breach of the Crown’s duties as a Treaty partner.
“Many Iwi and Māori landowners are captured participants of the ETS," he says.
"As a result of confiscations and the Treaty settlement process, much of the land Māori have been left with is best – and often only – suited to afforestation.
"In many of these settlements, the carbon value of forests was part of the negotiation and settlement with the Crown, and the value of those settlements will be eroded through this new fees regime."
The ETS has been in place for 15 years with very little cost recovery in that time. A proposal to greatly increase this payback was made in March and finalised after consultation with the forestry industry.
They have been estimated to add around $18 million per year in fees for foresters participating in the ETS, according to the claimants. But Cushen says this sum is a best estimate - it could easily grow - and MPI does not even know what the final cost would be.
But he says the worst thing would be a weakening of climate change mitigation.
"There is a public benefit to the Emissions Trading Scheme that appears to have been under appreciated or not appreciated at all," Cushen says.
"We don't object to paying our fair share but at the end of the day we plant trees to help meet our climate commitments, and this is the only part of our climate solution that is working at scale.
"The imposition of these fees will disincentivise what the industry is trying to do here, at exactly the time when we desperately need more."
The FOA Chief Executive Elizabeth Heeg says the system should be designed so that polluters pay, rather than penalising the people who are doing the vital work of capturing carbon dioxide.
"Ultimately all of us as taxpayers will be forced to bear the cost of New Zealand’s failure to meet its climate targets," she says.
"We are already projected to fall short of the target and the uncertainty created by measures like this just makes for a bigger bill.”
MPI is saying little about this case because it is before the courts.
But it points out there was a government decision that ETS participants should pay 63% of administrative costs of the system, with the remaining 37% still funded from the public purse.
Public consultation began in March to work out how to do this.
MPI says the principle behind these changes is that participants who benefit from having forests in the ETS pay for a proportion of the administration costs and not taxpayers.
MPI says it costs $29.8 million per year to administer the forestry ETS, of which $18 million will be met by the industry.
This contrasts with anticipated annual voluntary emission returns of $600 million per annum at current carbon prices.
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