Briefing: Afforestation on Crown-owned land:
Cabinet Paper for lodgement
Date submitted: [30 October 2024]
Tracking numbers: Ministry for the Environment BRF-5541
Ministry for Primary Industries B24-0687
Sub Security level: CLASSIFICATION
MfE priority: Urgent
Actions sought from Ministers
Name and position
Action sought
Response by
To Hon Simon WATTS
Minister of Climate Change
Note this updated Cabinet paper
31 October
Hon Todd MCCLAY
2024
Minister of Forestry
Actions for Minister’s office staff
Return the signed briefing to the relevant Ministries
Appendices and attachments
1. Appendix one: draft Cabinet paper
2. Appendix two: Feedback (verbatim) from agency consultation Withheld in full under 9(2)(g)(i)
Key contacts
Position
Name
Cell phone
First contact
Ministry of the Environment Responsible Manager
Ameera Clayton
9(2)(a)
General Manager
Mark Vink
Ministry for Primary Industries Responsible Manager
Sophia Murphy
Director
Alastair Cameron
Minister’s comments
BRF – BRF-5541
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BRF-5541
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Afforestation on Crown-owned land: Cabinet Paper
for lodgement
Purpose
1. This briefing provides an updated Cabinet paper (
Afforestation on Crown-owned land)
(
Appendix One) following Ministerial and agency consultation.
Departmental feedback
2. Last week, you sent a draft Cabinet paper (B24-0644 / BRF-5453
Updated draft Cabinet
paper: Afforestation on Crown-owned land) for Ministerial consultation between 23 – 30
October.
3. A truncated agency consultation process was undertaken between 23 – 25 October.
This was the second round of agency consultation on this paper. Many agency
comments were addressed following the first round of agency feedback (B24-0590 /
BRF-5344
Draft Cabinet paper: Afforestation on Crown-owned land refers).
4. Agency feedback has been received from the Department of Conservation (DOC); Land
Information New Zealand (LINZ); the Ministry of Business, Innovation and Employment;
Te Puni Kōkiri; Te Arawhiti; and the Treasury. Agency comments are summarised in
Appendix Two.
5. Key issues raised during agency feedback include:
9(2)(g)(i)
’ (EOI)
BRF-5541
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9(2)(g)(i)
Next steps
6. We understand you are stil aiming to lodge this paper with the Cabinet Office on 31
October 2024 for consideration at Cabinet Economic Policy Commit ee on 6 November,
and Cabinet on 11 October.
7. This timeline aligns with the lodgement for the final Second Emissions Reduction Plan
Cabinet paper.
8. Once we have Cabinet approval to proceed, of icials can provide advice and seek your
direction on the forward work programme to progress this proposal.
9. We wil also prepare material for a public announcement in the coming weeks (around
mid-November). We wil work with your offices to progress this. We expect the public wil
look to these announcements to get an understanding of the parameters the Crown is
considering for partnering with the private sector. This wil inform the conversations we
are to have with potential partners.
BRF-5541
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Recommendations
We recommend that you:
a.
note the feedback from agencies and the suggested amendments in the attached paper
b.
provide any
further feedback on the Cabinet paper before lodgement
Signatures
Approved electronically
Ameera Clayton
Alastair Cameron
Acting Manager
Director
Ministry for the Environment
Ministry for Primary Industries
30 October 2024
30 October 2024
Hon Simon WATTS
Hon Todd MCCLAY
Minister of Climate Change
Minister of Forestry
Date:
Date:
BRF-5541
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Appendix One: Afforestation on Crown-owned land:
Cabinet Paper for lodgement
BRF-5541
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Office of the Minister of Forestry
Office of the Minister of Climate Change
ECO - Cabinet Economic Policy Committee
Afforestation on Crown-owned land
Proposal
1.
This paper seeks agreement to:
1.1 in principle, make Department of Conservation (DOC) and Land Information
New Zealand (LINZ) land available for public/private afforestation partnerships,
to secure a mix of commercial and public benefits;
1.2 run a request for information (RFI) process to test domestic and international
partner interest and the commercial/other conditions they may require to invest in
afforestation on Crown-owned land; and
1.3 invite Ministers to report back 9(2)(f)(iv) on the conditions under which land
would be made available to partners, the process by which land wil be offered,
appropriate delivery models, and any legislative changes required to fully realise
these opportunities.
Relation to Government priorities
2.
This proposal relates to the National Party manifesto commitment to “Partner with the
private sector to plant trees including opportunities for native afforestation on Crown
land (excluding National Parks) that is unsuitable for farming and has low conservation
value”. This was also a key action signalled in the second emissions reduction plan
(ERP2) discussion document.
Executive summary
3.
The Crown is a significant landholder in New Zealand, including land that could be
identified as suitable for forestry and is of low farming value and low conservation
value. We intend to progress afforestation of this land in partnership with the private
sector.
4.
Preliminary desktop analysis has identified 760,000 hectares (ha) of the DOC and
LINZ estate which is available for consideration. There are likely to be a range of site-
specific factors (biophysical, commercial, for example) which will affect partners’
interest in afforesting this land (including scale, purpose, species, slope, and erosion
susceptibility).
5.
We intend for officials to run an RFI process, testing interest in forming public/private
afforestation partnerships for this land from potential partners. While not binding, or
tied to specific parcels of land, this process will allow us to gauge what land partners
are interested in planting, under what conditions.
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6.
After this market engagement we, with the Minister of Conservation, Hon Tama
Potaka, and Minister for Land Information, Hon Chris Penk, intend to report back to
Cabinet 9(2)(f)(iv) on conditions of offer, delivery models and process, and the
legislative changes required to enable afforestation partnerships not possible under
current settings.
7.
9(2)(f)(iv)
8.
Afforestation on Crown-owned land can make an important contribution to
achievement of our longer-term emissions targets (beyond 2030) – particularly, our
2050 net zero target.
9.
Our intention is that as lit le as possible of this new forestry should be registered in the
Emissions Trading Scheme (ETS). This wil maximise the additional benefit of carbon
removals, as well as minimise impacts on the ETS market.
10. We intend to outline this policy in ERP2 and wil work through the best way to reflect
the potential emissions impacts given the range of scenarios and uncertainty at this
stage.
11. Progressing work to afforest Crown-owned land is likely to be of high interest to
iwi/Māori. 9(2)(f)(iv), 9(2)(j)
Background
12. The forestry and wood processing sector has considerable potential to support the
Government’s objectives to grow the economy and exports, add value and lift
productivity. Forestry and wood processing also have a vital role in meeting
New Zealand’s climate change targets. Forests remove carbon from the atmosphere to
reduce our net emissions and their wood products can be substitutes for more
emissions-intensive products, for example, woody biomass can help businesses
transition off coal.
13. In the National Party Manifesto, and again in the ERP2 discussion document, the
Government signalled its intention to partner with the private sector to plant trees on
Crown-owned land that doesn’t serve conservation or agricultural purposes.
14. The Minister of Climate Change is required to finalise and publish ERP2 by the end of
this year. We intend to include afforestation on Crown-owned land as a key
commitment within that plan. Decisions to progress this work are therefore required
now, to allow us to set out additional detail on the Government’s intentions.
Analysis
Our objectives
15. The key objectives that guide this programme are to:
15.1 secure additional net emissions reductions, which contribute towards our
domestic and international emissions targets; and
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15.2 grow the forestry and wood processing sector, spurring economic growth through
jobs and exports.
16. Afforestation can also support biodiversity and freshwater outcomes and improve
adaptation to the impacts of climate change.
17. The rate and type of afforestation (native, permanent exotic, and production exotic)
that takes place on Crown-owned land wil affect the extent to which these various
objectives are achieved.
Commercial partnership approach to afforestation
18. We intend to progress this afforestation through partnership with the private sector.
The private sector wil fund the planting and management of the new forests, on
mutually agreed conditions, and the Crown wil retain ownership of the land.
19. There are likely to be a range of different types of partnership opportunity:
19.1 opportunities for commercial partnerships, for example, where land is suited to
exotic production forestry;
19.2 opportunities for the Crown to offer land on non-commercial (not-for-profit) terms
for private investment to secure public outcomes, such as sequestration,
biodiversity, and land remediation (which may require philanthropic funding);
19.3 opportunities to partner with Māori, including iwi; and
19.4 opportunities for Crown pastoral lessees to diversify land use.
20. These are unlikely to be mutually exclusive – for example, partnerships with iwi could
include both commercial and non-commercial arrangements, tailored to the
opportunities offered by specific land.
Initial assessment of potentially available Crown-owned land
21. There is approximately 11,730,000 ha of Crown-owned land in New Zealand. The
Crown is interested in considering opportunities to afforest Crown-owned land
wherever appropriate. We have initially focused this policy on DOC and LINZ land as
they manage the most property, and we have the most direct ability to make that land
available to partners. Other Crown-owned land may also be appropriate for this policy.
Excluding national parks, which the Government does not intend to make available for
public/private afforestation, there is 7,300,000 ha in the DOC and LINZ estates. Other
land which could be investigated in future is held by other entities like KiwiRail
22. Preliminary desktop analysis has identified that, of this 7,300,000 ha, there is around
760,000 ha of land which is potentially available and could be considered for
afforestation (after excluding land that is already in forest, or is unable to be planted as
it is a lake, a river, permanently snow, or transport infrastructure, for example). Most of
this land (730,000 ha) is in the South Island (see map in
Appendix One). 390,000 ha
of the 760,000 ha is held by leaseholders and administered by LINZ under the Crown
Pastoral Land Act 1998.
23. In practice, a range of factors including biophysical (for example, altitude, slope,
rainfall) and commercial (for example, accessibility, distance from roads, existing user
rights such as current lease and concession holders, other potential land uses) factors
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will affect partner interest in afforesting this land. These factors wil also affect what
type of forest is most likely to be planted (for example, native, permanent exotic,
and/or production exotic).
Testing partners’ interest through market engagement
24. We intend for officials to run an RFI process, testing interest from potential domestic
and international partners on their interest in forming public/private partnerships to
plant Crown-owned land. This process wil help gauge interest in Crown-owned land
such as on the 760,000 ha identified as potentially available (and help identify other
land partners have an interest in). The RFI process wil not be tied to specific parcels
of land.
25. This market engagement wil invite views from potential partners on matters such as:
25.1 commercial and biophysical factors which wil affect partners’ willingness to
invest;
25.2 specific sites or opportunities for afforestation which partners are already aware
of;
25.3 terms which affect the attractiveness to potential partners;
25.4 potential funding streams for afforestation; and
25.5 any Te Tiriti o Waitangi-related interests.
Report back on conditions of offer, delivery models and potential legislative change following
the RFI
26. After running the RFI, we intend to report back to Cabinet 9(2)(f)(iv) on conditions
of offer, delivery models and process, and any legislative change required to realise
afforestation partnerships not currently possible.
9(2)(g)(i)
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link to page 11
27.5 9(2)(g)(i)
Delivering this programme: delivery models and processes
28. We wil also need to develop suitable delivery models and processes. Delivering this
afforestation programme wil require a range of activities be undertaken such as,
identifying and advertising suitable parcels and negotiating terms with potential
partners, including the rights to access and use the Crown-owned land, and on-going
management of the afforestation contracts.
29. There are likely to be a mix of delivery models to suit opportunities identified above,
ranging from existing units within agencies, through to establishing a new, independent
entity. Successful delivery wil require technical and commercial expertise to identify
parcels, partners, and complete deals especially as the programme scales up.
30. 9(2)(g)(i)
Policy settings wil need to be reviewed to increase the ability to afforest Crown-owned land
31. The Director-General of Department of Conservation and Commissioner of Crown
Lands have some statutory powers to make Crown-owned land available for use by
third parties.
1 These powers do not enable afforestation at the full scale envisioned
and provide limited opportunities for exotic afforestation, as these mechanisms are
designed with policy settings that seek to deliver on the objectives of underlying
legislation, such as conservation or agricultural production.
32. Legislative change wil be progressed to amend these settings. Building on the
information gathered from potential partners during the initial RFI process, we intend
that the Ministers responsible for potentially impacted legislation wil bring proposals to
Cabinet for potential legislative amendments to address these constraints and unlock
the full scale of the opportunity to afforest Crown-owned land.
33. 9(2)(f)(iv)
34. Consideration would be needed of existing user rights and how they interact with
choices to make land available. There are existing concessions in place over some of
DOC land that cannot be overridden without legislative change. In addition, 390,000 ha
of the available land in the Land Information portfolio is Crown pastoral land. Even with
legislative changes to enable afforestation, Crown pastoral leaseholders have rights of
exclusive possession and perpetual renewal and thus would retain decision rights on
whether to af orest this land.
35. We wil have choices about the scale and extent of these legislative changes,
depending on what is signalled by prospective partners. For example, the scope could
1 These include concessions or management agreements for public conservation land, and leases and
licenses under the Land Act 1948.
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link to page 12 link to page 12 link to page 12
range from necessary changes to actively encourage afforestation where it aligns with
existing purposes (likely a focus on native af orestation), to a more flexible approach
which would enable all types of afforestation. The implications of our choices on scope
wil need to be worked through based on further advice.
Complementary changes to enable use of Crown-owned land are already underway
36. The Government is already progressing changes to improve DOC’s processes for
making land available (the Cabinet paper
Modernising Conservation Land
Management: Approval to Consult refers).
37. The Minister of Conservation is proposing amendments to speed up concessions
processes and streamline the planning system, including aspects that limit how land
can be used, and proposing to enable greater flexibility in the exchange and disposal
of public conservation land where it would also benefit conservation.
38. The Government is also progressing work to manage whole-farm conversions to exotic
forestry registering in the ETS (the Cabinet paper
Approval to progress policy to
manage whole-farm conversions to exotic forestry registering in the ETS refers). We
propose to exempt Crown-owned land that is made available for public/private
afforestation partnerships from these ETS restrictions. 9(2)(j)
Supporting net zero by 2050
39. Existing forestry wil contribute approximately [61] mil ion tonnes of abatement towards
the second emissions budget (2026 – 2030), and around [20] million tonnes of
abatement in 2050.
40. Proposed afforestation on Crown-owned land is not expected to directly contribute to
achievement of the second emissions budget (2026-2030)
2, but afforestation on
Crown-owned land can contribute to reaching net zero for all greenhouse gas
emissions, except biogenic methane, by 2050.
3
41. Current projections being conducted to support ERP2 suggest that around 6 mil ion
tonnes of emissions are not expected to be offset by removals in 2050 (though this is
highly uncertain at this stage).
42. Planting trees on Crown-owned land, which are not registered in the ETS, can provide
additional removals to offset these emissions. Our intention is that as little as possible
of this additional forestry should be registered in the ETS. This also minimises the
impact on the ETS market.
4
43. However, unless alternative financing mechanisms can be identified, it is likely private
partners will want to register some exotic afforestation on Crown-owned land inside the
ETS to help fund exotic and native af orestation outside the ETS. The proportion of
2 Due to initial carbon losses that occur when new forests are planted, and the lag between planting
and carbon removals, additional afforestation is expected to generate some additional emissions during
this period.
3 Achieving this means that any remaining greenhouse gas emissions (except for biogenic methane) in
2050, and for each year thereafter, must be offset through ongoing removals.
4 Additional supply of ETS units from forestry could depress ETS market prices.
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link to page 13 link to page 13
afforestation which wil need to be registered in the ETS to fund non-ETS afforestation
wil be tested with investor partners.
44. To fully meet the 2050 net zero target using afforestation on Crown-owned land, initial
estimates suggest it would require the following afforestation scenarios, in which some
planting in the ETS funds planting outside the ETS:
44.1 200,000 ha of exotic afforestation on Crown-owned land could provide
approximately 6 mil ion tonnes of abatement in 2050 (175,000 ha outside the
ETS, 25,000 ha inside the ETS). Note, initial assessments suggest over 100,000
ha of this could need to be permanent exotic afforestation;
44.2 570,000 ha of afforestation on Crown-owned land (including approximately
265,000 ha of native afforestation outside the ETS, and over 200,000 ha of
permanent exotic afforestation inside the ETS) could provide approximately
6 mil ion tonnes of abatement in 2050; and
44.3 If all 760,000 ha were planted, roughly 400,000 ha of native afforestation outside
the ETS could be funded by 300,000 ha of exotic forestry registered in the ETS.
This could provide approximately five mil ion tonnes of additional abatement in
2050.
5
45. These scenarios above indicate the scale of planting and abatement only if costs are
fully funded from commercial forestry or ETS carbon credit returns. We anticipate that
these scenarios could be supplemented by native afforestation outside the ETS fully
funded by the private or philanthropic sector which would add a small amount to this
abatement. This could be up to 50,000 ha.
46. Key assumptions need to be tested with the private sector during the RFI process
(including estimates about land availability, growth rates
6, private sector uptake, and
subsequent Ministers’ decisions on legislative change). The option for the lowest ha
afforestation (paragraph 43.1) assumes approximately 10,000 ha per year out to 2050
starting in 2026, noting this rate is an average only.
47. In the event it is not possible to achieve the scenarios described above planting a
lower amount of land, or a different mix of trees, would still make an important
contribution to achieving the 2050 net zero target. The Government wil be able to
further consider any issues as part of the report back 9(2)(f)(iv) .
48. Pending Cabinet’s agreement, we intend to include this policy in ERP2. Noting the
range of scenarios and uncertainty, we wil work through the best way to reflect the
potential emissions impacts.
5 Each of these scenarios involves some small additional net emissions during the second emissions
budget period (2026-2030) due to initial carbon losses that occur when new forests are planted to be
determined.
6 Calculations use the most up-to-date data from afforestation over recent years (of which predominantly
has been occurring on the east coast of the North Island), so may not reflect the productivity and
therefore carbon sequestration from the available Crown-owned Land.
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link to page 14
Treaty of Waitangi implications
49. Both the Crown and Māori have positive duty to act in good faith, fairly, reasonably,
and honourably towards each other. The duty of good faith includes a requirement that
the Crown takes reasonable steps to make informed decisions on matters that affect
Māori interests. Māori land and forest owners wil have interests in these proposals to
afforest Crown-owned land to secure additional net emissions reductions and grow the
forestry and wood processing sector.
50. Some of the land made available for afforestation is likely to be land in which iwi
involved in the Five Iwi Afforestation Proposal
7 have an interest, or may be subject to a
Right of First Refusal, or a Deferred Selection Property in a Treaty settlement. Some
land may also be properties the Crown has reserved as potential redress for future
Treaty settlements. There may also be Treaty obligations flowing from the legislation
governing either the land or the delivery mechanism chosen to progress the
afforestation proposals. For example, there are specific Tiriti obligations in the
Conservation Act 1987, Crown Pastoral Land Act 1998, and the Climate Change
Response Act 2002.
51. These obligations (from both Treaty settlements and general legislation) wil be
considered in the assessment of what land should be made available and the
conditions attached to any offers.
52. 9(2)(f)(iv), 9(2)(j)
Cost-of-living Implications
54. There are no cost-of-living implications from the decisions sought in this paper.
Financial Implications
55. There are no financial implications arising from the decisions sought in this paper.
Costs of the RFI process will be met from within existing agency baselines. The 9(2)(f)(iv)
report back wil address financial implications arising from future policy decisions,
which will be informed by the RFI process. Officials will provide Cabinet with
reprioritisation options and associated trade-offs to support Cabinet decision making.
7 The Five Iwi Afforestation programme involves five iwi who settled Treaty claims that included the
transfer of pre-1990 forest land before the ETS was introduced in 2008. The five iwi are Ngāi Tahu,
Waikato-Tainui, Te Uri o Hau, Ngāti Awa and Ngāti Tūwharetoa ki Kawerau (with Ngāi Tahu receiving
the largest amount of forest land at 180,000ha). These iwi, led by Ngāi Tahu, argue that the Crown did
not meet the information disclosure requirements of their Treaty settlement when the ETS (and new
rules around deforesting pre-1990 forest land) were introduced, and that this materially impacted the
value of the forestry assets returned. In 2009 when the National-led Government secured the support
of the Māori Party, a condition was that the Government explore solutions to the concerns of the Five
Iwi.
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Legislative Implications
56. There are no legislative implications from the decisions sought in this paper.
Impact Analysis
Regulatory Impact Statement
57. The Ministry for Regulation has determined that this proposal is exempt from the
requirement to provide a Regulatory Impact Statement on the grounds that it has no or
only minor impacts on businesses, individuals, and not-for-profit entities.
Climate Implications of Policy Assessment
58.
The Climate Implications of Policy Assessment (CIPA) team has been consulted and
confirms that the CIPA requirements apply to this proposal as its objective is to reduce
emissions. While this proposal is expected to make meeting Emissions Budget 2 more
challenging, it wil contribute to New Zealand’s long-term emission reduction targets.
See paras 38-47 for more detail, including around key areas of uncertainty.
Population Implications
59. As this paper does not seek final decisions, there are no immediate impacts on
population groups.
Human Rights
60. The proposals in this paper are consistent with the New Zealand Bil of Rights Act
1990 and the Human Rights Act 1993.
Use of external Resources
61. No external resources were used in the preparation of this paper.
Consultation
62. The following agencies have been consulted: Ministry of Business, Innovation and
Employment; Department of Conservation; Land Information New Zealand; Of ice for
Māori Crown Relations – Te Arawhiti; Te Puni Kōkiri; the Public Services Commission;
The Treasury; and the Department of the Prime Minister and Cabinet.
Communications
63. Ministers will consider how best to communicate this policy, including through ERP2.
Proactive Release
64. We propose to proactively release this Cabinet paper subject to any necessary
redactions. This wil be done within 30 business days following confirmation of
Cabinet’s decisions.
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Recommendations
The Minister of Forestry and Minister of Climate Change recommend that the Committee:
1
Agree in-principle to make DOC and LINZ land available for public/private
afforestation partnerships to secure a mix of commercial and public benefits;
2
Note that 760,000 hectares of DOC and LINZ land has been identified through
preliminary desktop analysis as potentially available for consideration, and that this
programme wil continue to identify other Crown-owned land (in addition to DOC and
LINZ land) which could be available for consideration;
3
Agree that officials will run an RFI process to test domestic and international partner
interest in both commercial and non-commercial afforestation;
4
Invite the
Minister of Forestry, Minister of Climate Change, Minister of Conservation
and Minister for Land Information to report back to Cabinet 9(2)(f)(iv) on the policy
parameters and conditions under which land wil be made available, the process by
which land wil be offered, appropriate delivery model, and any legislative changes
required to realise these opportunities;
5
9(2)(f)(iv)
6
9(2)(g)(i)
7
Note that the Government’s intention is to use Crown-owned land to enable sufficient
afforestation to support our 2050 net zero target;
8
Agree that, to maximise additionality of carbon removals and minimise impacts on the
ETS market, as little as possible of this new forestry should be registered in the ETS;
9
9(2)(f)(iv), 9(2)(j)
11
Agree to proactively release this Cabinet paper subject to any necessary redactions
within 30 business days following confirmation of Cabinet’s decisions.
[Placeholder - Authorised for Lodgement]
Hon Simon Watts
Hon Todd McClay
Minister of Climate Change
Minister of Forestry
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Appendix One: Initial Assessment of potential y available DOC and LINZ Land
This document is withheld in full under section 9(2)(g)(i) of the Act to maintain the
effective conduct of public affairs through the free and frank expression of opinions
between Ministers of the Crown and employees of any public service agency in the
course of their duty.
The final version can be found at:
https://www.mpi.govt.nz/dmsdocument/67230-Indicative-land-map-high-resolution
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Document Outline
