The “currency” of the ETS is New Zealand Units (NZUs), commonly referred to as a ‘carbon credit’. An emission unit can represent one metric tonne of carbon dioxide itself, or the equivalent of any other greenhouse gas. Forest owners can earn NZUs from the Government because their trees absorb greenhouse gases. In reverse forest owners can also have to surrender NZU's when harvesting or deforesting.
Forestry is divided into two schemes depending on whether the first rotation was established after 1989 (post-1989) or before 1990 (pre-1990).
Post-1989 forest land:
- is a voluntary scheme, with mandatory 5 yearly returns submitted
- earn NZU's as their forests grow, and
- must return credit once trees harvested or deforested
- is capped to only return the amount of units received.
Pre-1990 forest land:
- is a compulsory scheme
- face obligations under the scheme if they deforest, and
- have received a one-off allocation of NZUs to help offset the decrease in land value due to decreased land-use flexibility.
- Can offset their forest to avoid liabilities
- is for exotic forest only, indigenous remains under the resource management act
Whether you are in or out of the schemes we can assess your liabilities at the harvest assessment stage. It is very important these legal obligations are met. We can time your harvest to minimise credit loss, work out the changes in carbon stocks, submit your emissions return and arrange units for surrender.