Forestry in the NZ Emissions Trading Scheme

How the ETS works in NZ

Currently registering with the NZETS is voluntary. Subject to eligibility, you can join the scheme and accumulate NZUs/Carbon Credits, which get deposited into your account after emissions returns are filed.

1. Current accounting system “Stock Change Approach”:
   Carbon credits can be claimed annually through voluntary returns. There are mandatory emissions returns at the end of each 5 year commitment period to account for changes in carbon stocks. Participants have to repay any liabilities incurred for losses in claimed carbon stock i.e. harvesting.
2. Averaging accounting system:
   The government has announced under further improvements to the ETS the decision to move towards averaging accounting. All forests registered from 1 January 2023 will have to use this system, forests registered from January 2019 have the option to use the new accounting method or stay in the stock change approach.When the change comes into effect, forest owners registered in the ETS who use the new ‘averaging accounting’ option will no longer need to surrender NZUs when they harvest (if they replant). Participants would instead receive fewer NZUs as their forest grows, up to a determined average level of long-term carbon storage, being age 16 for pinus radiata.
3. PP89
   From 1 January 2023 PP89 (permanent post 1989) will be introduced, this category is replacing PFSI (permanent forest sink initiative), the rules and regulations surrounding this category are yet to be finalised.