POST-1989 FOREST LAND

Post 1989 Forest Land is land that has had a conscious land use change from ‘non forest’ to ‘forest land’ on or since 1st January 1990. Because it now sequesters carbon that otherwise would not have happened before 1990 the international community (via the Kyoto protocol) allows carbon credits to be available to this forest on an annual basis.

Under the NZ Emission Trading Scheme credits can be allocated to any forest planted from 1990 for carbon sequestered after Jan 2008. Any eligible forest registered into the ETS by the end of December 2012 can claim its credits back to 2008.

The scheme (for post 1989 forest) is completely optional and if not registered by 31 December 2012 the forest owner can still sign up the following year but only claim carbon credits from 2013. Given the amount of registrations on the MAF processing desk we would recommend being in the pipeline early 2011 to ensure that registration is completed on time.

The following table reflects the number of credits allocated based on the MAF tables for the Hawkes Bay/Lower North Island.

For the first ten years (if planted after 2008) the credits produced do not need to be surrendered when the block is logged if the forest is replanted. At $20/unit this cumulative volume amounts to $4,200 that is available to the forest owner.

The net effect of this on a Business as Usual forestry model can lift the IRR from 6-7% to 18% – a paradigm shift in forestry economics.

Year Carbon Annual value  
  Sequestered at  
  per Yr/Ha. $20.00  
    Per Unit  
1 0.5 $10.00  
2 2.5 $50.00  
3 6 $120.00  
4 25 $500.00  
5 37 $740.00  
6 42 $840.00  
7 42 $840.00  
8 30 $600.00  
9 12 $240.00  
10 13 $260.00 $ 4,200.00
11 23 $460.00  
12 27 $540.00  
13 31 $620.00  
14 34 $680.00  
15 36 $720.00  
16 37 $740.00  
17 38 $760.00  
18 37 $740.00  
19 37 $740.00  
20 37 $740.00  
21 35 $700.00  
22 35 $700.00  
23 33 $660.00  
24 31 $620.00  
25 31 $620.00  
26 29 $580.00  
27 28 $560.00  
28 28 $560.00  
29 28 $560.00  
30 27 $540.00