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Pre-1990 forests in the Emissions Trading Scheme
Purpose
1. This aide memoire gives you detail on how pre-1990 forests interact with the New
Zealand Emissions Trading Scheme (ETS) and specifically their treatment following
extreme weather events. This advice also notes the impact of the ETS on iwi/Māori who
own pre-1990 forests affected by extreme weather events.
Forests in the ETS
2. The ETS was introduced in 2008 and forestry was added to the scheme shortly after.
3. The role of the ETS is to create incentives to reduce our greenhouse gas emissions,
towards our domestic emissions budgets. These assist New Zealand to meet our
international obligations under climate-change treaties like the Paris Agreement and the
Kyoto Protocol.
4. Reflecting the international treatment of our forests, a base-year of 1990 for forestry was
set, this categorised all forest land as either pre-1990 or post-1989 (sometimes referred
to as P90 and P89).
5. The ETS differentiates the short-term clearing of forest land (e.g. harvesting, and
damage by storms) from deforestation which is defined as either:
i.
converts the land to a non-forest land use (for example into pasture or housing); or
ii.
it is deemed to be deforested due to the land failing to re-establish into forest
species within set timeframe following clearance.
Pre-1990 forest land
6. Land that qualified as forest land on 31 December 1989, remained forest land on 31
December 2007 and was predominately exotic forest on that date is known as “pre-1990
forest land”.
7. Pre-1990 forest land does not need to be registered in the ETS. Landowners of pre-1990
forest only need to interact with the ETS if the land is deforested.
8. Pre-1990 forest land is not considered deforested, and there are no ETS obligations, if
natural events mean the forest is permanently prevented from being re-established into
forest. An example of this would be a large-scale land slide down to bedrock.
9. Forest land which was forest land on 31 December 1989 and was predominantly
indigenous forest on 31 December 2007 does not interact with the ETS but is still
captured in New Zealand’s carbon accounting. This land is regulated under the
Resource Management Act 1991 and the Forests Act 1949.
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Post-1989 forest land
10. Post-1989 is primarily land which was not forest land on 31 December 1989, and
subsequently became forest land. Land’s status as post-1989 forest land is determined
when a person applies to register into the ETS.
11. Once registered post-1989 is able to earn NZUs for carbon sequestration, these
removals are considered additional and count towards our emissions targets and
budgets.
12. An area of registered post-1989 forest land must surrender all NZUs received if it is
deforested or deregistered from the ETS.
13. Registered post-1989 forest land which experiences clearing due to severe weather can
apply to a ‘Temporary Adverse Event Suspension’ from accounting: provided the land is
reforested within 4 years carbon accounting is paused and there is no surrender
obligation. Post-1989 forest land which experiences natural events mean the forest is
permanently prevented from being re-established does not have surrender obligations
for this deforestation.
Forest land which is not post-1989 cannot get rewarded for carbon removals
14. Some foresters have previously raised concerns with the lack of recognition for potential
additional carbon sequestration that is occurring in New Zealand’s pre-1990 forests. The
Kyoto Protocol did not provide a reward for this forest, but under the Paris Agreement
New Zealand can be rewarded for additional carbon removals above a ‘base line’
amount.
15. There is research underway (Maximising Forest Carbon) to test if we can measure the
impacts of forest management on carbon storage in both exotic and indigenous forests
which existed on 31 December 1989. Whilst a lot of development is still required this
would provide the foundations needed to potentially count these additional removals
towards our targets in the future.
Deforestation Liability
16. Upon introduction of the ETS landowners had a restriction/liability assigned to pre-1990
forest land preventing them from deforesting thus land. Previously those landowners
had freedom to convert to other land uses without penalty.
17. This impact on landowners of pre-1990 forests was moderated through three further
policies:
i.
the 2010 Forest Land Allocation Plan, which offered NZUs to all owners of pre-1990
forest land to recognise the impact of the ETS on future land use options. This made
55 million NZUs available nationwide, of which around 48 million were claimed.
ii.
landowners can apply for an exemption from deforestation liabilities if:
i. they had less than 50 hectares of pre-1990 forest land in 2007; or
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ii. they are a removing tree weeds and have been granted an exemption
iii. their land is less than 50 hectares and was either Maori land (under Te
Ture Whenua Maori Act 1993 and meets conditions around governance)
or owned by 10 or more people in 2007.
iii. in 2013, pre-1990 offsetting land was introduced to the ETS. This significantly
reduces the cost of deforesting areas of pre-1990 forest land, provided a new forest
of at least equivalent size and expected carbon stock is established elsewhere.
18. Several iwi have raised concerns about the introduction of the ETS and it’s impact on the
value of forest land held by iwi/Māori, including land that was granted as part of Treaty
settlements. 9(2)(f)(iv)
Severe Weather Events
19. Damage to forest caused by severe weather events creates additional challenges and
impacts on owners of forest land registered in the ETS. While it is highly unlikely
deforestation caused by the severe weather will cause ETS liabilities, the wide scale
damage creates other issues.
20. This unintended clearing caused by a severe weather event was most recently observed
on central and eastern parts of the North Island due to cyclone Gabrielle. The impacts of
which are still being dealt with to date.
21. To avoid the liabilities from the land being deemed deforested, landowners have a
window of time to re-establish the land into forest following it being ‘cleared’`. The length
of time is set in the Climate Change Response Act (CCRA) and depends on species of
tree. These tests are applied at 4, 10 and 20 years after clearance.
22. A severe weather event disrupts foresters’ ability to meet this re-establishment timeline.
The disruption can be due to the severe weather directly impacting the forest land. It is
also likely that wider disruptions including whether the land needs preparation prior to
planting, disruption to the wider forestry supply chain (for example nurseries) and/or
access through damage to roads, wil significantly reduce foresters’ ability to meet the
re-establishment timeframes.
23. In 2023, the Government of the time used the Severe Weather Emergency Recovery
Legislation Act (SWERL Act) to introduce an Order in Council1 to vary the CCRA and
allow for flexibility for foresters impacted by the 2023 severe weather including Cyclone
Gabreille. Flexibility has primarily granted through extensions to the timeframe for re-
1 Severe Weather Emergency Recovery (Climate Change—Forestry) Order (No 2) 2023
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establishing a forest where the 4- and 10-year re-establishment test would apply in 2023
or 2024.
24. Due to the extensive damage and loss of timber income, pre-1990 forest land
landowners who are finding re-establishment challenging and costly. 9(2)(b)(ii)
9(2)(f)(iv)
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