Managing exotic afforestation incentives

a Bioenergy Association submission (April 2022)

The Bioenergy Association is pleased to respond to the Ministy for Primary Industries discussion document on proposals to change forestry settings in the New Zealand Emissions Trading Scheme.

The main points of our submission are that:

  • We agree that exotic forestry should not be included in the permanent category as otherwise the profitability of permanent exotic forestry will increase relative to other productive land uses, and thus distort wise land use decision-making.
  • Permanent exotic forests should not be encouraged as cyclical forests (always replanted after harvest) provide better carbon dioxide absorption than a permanent forest AND provide wealth creating products.
  • We support only option 2. Only native species should be included within the permanent forestry category.
  • Maximising the national greenhouse gas emission reduction benefits from forestry occurs from both the sequestration AND from the use of biomass residues as a fuel to replace fossil fuels.  The policies developed from this consultation needs to take both into account.
  • An undue focus on sequestration by forestry would result in an inability to produce enough biomass to replace fossil fuels.
  • If landowners have a choice of options for registering their vegetation – permanent native, NZETS average accounting, NZETS stock change accounting, or He Waka Eke Noa then landowners will be optimally incentivised to make the best decision and are likely to use vegetation to maximise emissions mitigation.
  • Remove bias for particular species or vegetation types and let farmers make the best decision appropriate for their land and soil types.
  • Farmers should be able to have a choice in which scheme they include farm forestry. Remove the requirement that NZ ETS-eligible exotic forest would not be eligible for the He Waka Eke Noa system. Much farm forestry may be eligible to be included within the NZ ETS but isn’t because of administrative costs so should be able to be included within He Waka Eke Noa.
  • With clear incentives, farmers can contribute significantly more to New Zealand’s energy needs, utilizing the 6-9% of least productive areas of their land to contribute biomass to meet 24 PJ of future energy demand.
  • Have a farm based annual GHG accounting scheme which includes the liabilities from all farm emissions and all mitigation credits occurring in that same year. This provides recognition for mitigation from all vegetation planting regardless when planted. Use of default values such as is used for livestock accounting would keep the system administratively simple.
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