Ebex21 News

EBEX21® Newsletter Issue 14, February 2009

Regeneration following removal of stockPolicy Update

On 11 September 2008 the New Zealand Labour Government passed legislation  introducing the New Zealand Emissions Trading Scheme (NZ ETS). Forestry was the first sector to enter the NZ ETS and by October 2008 the Ministry of Agriculture and Forestry (MAF) had published A Guide to Forestry in the Emissions Trading Scheme1. It is pleasing that most of the concerns EBEX21 had about the draft regulations released in May 2006 have been alleviated in the latest outline.

However, following the change of government in November 2008 there has been uncertainty about the NZ ETS. This leaves the Permanent Forest Sink Initiative2 (PFSI) as the only current option for forestry landowners wishing to produce Kyoto-compliant carbon credits. If the NZ ETS is retained, it is our understanding that the rules regarding the inclusion of forestry are unlikely to change, so we have included those in this newsletter for comparison.

PFSI and NZ ETS compared

The following table shows a revised3 comparison of the schemes, using only those factors relevant to owners of indigenous forests. The table also shows which parts of each scheme can be completed by EBEX21 on behalf of the landowner.


Factor

NZ ETS (indigenous regeneration)

PFSI (indigenous regeneration)

Services provided by EBEX21 and extra requirements

Eligibility

Indigenous forest that is established after 31 December 1989 on land that was not forest land on 31 December 1989

Indigenous forest that is established after 31 December 1989 on land that was not forest land on 31 December 1989

Land eligibility determination

Covenant

No covenant required. Land use can be changed if all credits are bought back

PFSI Covenant required; can opt out after 50 years if all claimed credits are bought back. PFSI Covenants are carbon-specific

EBEX21 would require a QEII or Conservation Covenant in addition to ETS (not PFSI) registration, plus additional contracts with EBEX21 to cover the certification of carbon credits

Administration costs

Application

$550

$562

Streamlined application process to ensure applications are in correct format and therefore will not require extra MAF time, such as in providing the mapping service required

Emissions return filing

$100
per return

Unknown but assume $100

Hourly rate

$130

$130

Travel and accommodation

Hourly rate + actual and reasonable

Hourly rate + actual and reasonable

Process

  • Obtain NZEUR account
  • Register
  • Determine area
  • Calculate carbon accumulation
  • File a return
  • Obtain NZEUR account
  • Register
  • Determine area
  • Obtain covenant
  • Calculate carbon accumulation
  • File a return

This process is completed by EBEX21

Carbon measurements

If area is greater than 50 ha, field measurements are required, otherwise can use default values. This may change for indigenous forests

Interim lookup table for sequestration rate. Future measurement options to be finalised

Field measurements are done by EBEX21 and include a biodiversity assessment

Credit types

NZUs. NZUs can be converted to AAUs

AAUs only

Can sell NZUs and AAUs as long as they have gone through EBEX21 audits

Selling credits

MAF does not facilitate credit sales

MAF does not facilitate credit sales

Sells credits – largely through the carboNZeroCertTM programme

Audit requirements

Records must be kept by landowner for audit

Records must be kept by landowner for audit

EBEX21 archives all records

Reporting or filing a return

Every 5 years, but can do voluntary returns annually

Annual or once a commitment period

Covered by EBEX21

Liabilities (when landowner is expected to buy back credits at the current market value)

  • Land use change
  • Natural disturbance, e.g. fire
  • Land use change
  • Covenant termination
  • Natural disturbance, e.g. fire

EBEX21 insurance pool covers natural disturbances

Land area requirements

More detail from landowners required if over 50 ha

More detail from landowners required if over 50 ha

Greater than 50 ha

Transferability

Unknown

Can transfer to ETS (cannot be in both)

Will help in transfer

As you can see the main difference between the PFSI and the NZ ETS is that you require a covenant for the PFSI. It should be easy to transfer from the PFSI to the NZ ETS later if required and the PFSI Covenant would be annulled at that time. EBEX21 requires a covenant (can be PFSI or other such as QEII if in the ETS) so that our credits are internationally credible and hence have a higher value.

Afforestation Grant Scheme

A complementary scheme is the Afforestation Grant Scheme4 (AGS). The goal is “to encourage the establishment of new forest land in New Zealand in order to stabilize the greenhouse gas concentration of the atmosphere.”5 The AGS is best suited to landowners with less than 50 ha. Landowners would need to apply for this on their own as EBEX21 only covers land areas of more than 50 ha. This is a tender-based scheme and is a grant for planting or assisting regeneration, as opposed to a scheme that produces carbon credits.

Scheme and landowner-type compatibility

The table below shows the suitability of the three schemes (ETS, PFSI and AGS) for different land areas.

Scheme

Less than 50 ha

More than 50 ha

ETS

Uncertain at this stage

Uncertain at this stage

PFSI

The rigorous EBEX21 certification precludes this option, but landowners can still sign up on their own behalf and accept the default sequestration rate

Only current option and can move to ETS later

AGS

Good option

Get better returns from the PFSI

If you wish to learn more about all the schemes go to: www.maf.govt.nz/sustainable-forestry/

EBEX21 update

EBEX21 continues to work with landowners certifying and brokering the sale of EBEX21 units for carbon sequestered prior to 2008.  These are known as voluntary carbon credits.

We will endeavour to keep you up to date on policy changes when they occur. At the moment it is unclear what the new government will do.

Footnotes & links

1A Guide to Forestry in the Emissions Trading Scheme www.maf.govt.nz/sustainable-forestry/ets/guide/
2Permanent Forest Sink Initiative (PFSI) www.maf.govt.nz/forestry/pfsi/
3Current after the passing of legislation in September.
4Afforestation Grant Scheme (AGS) www.maf.govt.nz/climatechange/forestry/initiatives/ags/
5Ministry of Agriculture and Forestry 2008: Afforestation Grant Scheme Guidelines. Ministry of Agriculture and Forestry (MAF). Wellington.

Regeneration following removal of stock

Photo by Larry Burrows (EBEX21 team member) showing the potential for native regeneration (right hand side of fenceline) with the removal of domestic stock and the control of wild animals. 

 

Newsletter content copyright © Landcare Research 2018
ISSN 1178-9190

Enquiries:
Please contact May Chang, 03 321 9831, or email ebex21@landcareresearch.co.nz
www.ebex21.co.nz

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