Campaigning against conversion of pastoral land to permanent exotic forest looks to have borne fruit. By Glenys Christian.

Two years of highlighting the amount of pastoral land being planted in forests to offset carbon emissions has seen Beef + Lamb New Zealand’s stark analysis of its effects to be right, chief executive Sam McIvor says.

“It’s satisfying that we’re getting the recognition. The Government does realise there’s real groundswell support for change.”

His comments came days after climate change minister, James Shaw, and forestry minister, Stuart Nash, released a public discussion document suggesting future permanent plantings of exotic forests could be excluded from the Emissions Trading Scheme (ETS).

Nash said the Government wanted to balance the risks created by new permanent exotic forests not intended for harvest. There was a window to build safeguards into the system before a new ETS framework starts at the beginning of next year when, under current rules, a new permanent forest category will allow both exotic and indigenous forests to earn New Zealand Units (NZU).

It’s now proposed to exclude exotic species to balance the need for afforestation with those of local communities, regional economies and the environment.

McIvor said the NZU price of over $80 was driving a “massive distortion” in land use with neither sheep and beef returns or those from plantation forestry able to compete. B+LNZ calculates $700 million a year is being lost from sheep and beef earnings because of carbon plantings.

“The Government hasn’t been thinking about the long term. [It has been focused on] the next 30 years,” he said.

“They’ve been fiddling while rural communities have been burning.”

There hadn’t been the necessary thoroughness when it came to impact analysis to make sure there weren’t unintended consequences from the planting.

“It’s a wicked problem as to how we get to a low-carbon economy but we do want emitters to look hard at their own businesses.”

Federated Farmers meat and wool chairperson, William Beetham, said it was great to at last see the Government looking at the problem which had been the subject of a lot of advocacy and feedback. ETS settings were very blunt and  didn’t promote good land use or consider the effect on rural communities.

“We need a level playing field for forestry and sheep and beef farming,” he said.

“We’ve done a lot of work around policy options and we’re keen to see the Government move through changes quickly.”

Lobby group 50 Shades of Green spokesperson, Andy Scott, said the Government moves, although well overdue, were a good start.

“But there’s been a huge amount of damage done,”

The Wairarapa real estate agent estimates more than 30,000ha has been sold to be planted into trees in that area alone over the last year.

“And Wairoa has been devastated.”

Carbon prices boost land values

Land prices which sat about $8000/ha have reached from $17,000-$23,000, fuelled by rising carbon prices. And while there was a shortage of seedlings Scott believed land buyers already had them on hand to plant out before any policy changes were made.

“But planting trees is not mitigating the problem.”

The ETS was only penalising large carbon emitters such as those in the transport sector who passed their increased costs on. The ideal situation would be if farmers could be rewarded for the trees they’d already planted.

The discussion document says continuing to plant pines as a permanent forest “is likely to increasingly present issues for New Zealand”. This could result in low long-term economic activity and less job creation in the region directly surrounding that land, affecting economies and social outcomes in those communities.

With planting being so profitable at present investment in and uptake of low-carbon technologies could be curtailed. Long-term environmental risks of planting exotics were increases in pests, fire danger and the spread of wilding pines. And fast-growing, heavy forests planted on steep, erosion-prone land could become unstable through heavy rain and windthrow, which could present risks to downstream communities and landowners.

The present carbon price meant permanent exotic forest could significantly outperform sheep and beef farming with an estimated investment return of $30,000/ha compared with about $4500. And this would increase as the carbon price rose.

The Ministry for Primary Industries (MPI) estimates the ETS could drive more than 645,000ha of exotic afforestation in the next decade with about half of that through to 2030 being permanent. At a carbon price of $110 the return on permanent exotic forestry was comparable with that from low-producing dairying land. Less export revenue and fewer jobs would also result and while planting native forestry carried some of the same risks these were lower because of the lower returns generated.

However the discussion document says permanent forestry is an appropriate land use in some situations, drawing attention to an estimated 840,000ha of North Island land at risk of serious erosion.

Submitters on the proposals are given three options if they believe change is required. The first two would prevent exotic forestry being registered as permanent under the ETS or this could still continue, but with exceptions, to be made after the start of next year.

One of these could be permanent exotic forests established with the aim of transitioning to indigenous. The third option would be a temporary moratorium on exotic forests which could be put in place for between one and five years. While it would buy time, the discussion document acknowledges there are risks. One is that permanent exotic forests might continue to be planted because of a belief they might be able to be registered under the ETS in the future.

Dryland Carbon general manager Colin Jacobs said the company was pleased the Government was looking at the issue.

“The whole industry needs stability because that’s what we don’t have at the moment.”

The company, formed in 2019 as a partnership of Air New Zealand, Contact, Genesis and Z Energy to manage their compliance surrender obligations, has planted 10,500ha of trees on marginal land on farms throughout the country.

He sees there are three challenges to be addressed: the blanket planting of trees, the requirement for a more effective contribution to NZ’s climate change obligations and a method of disincentivising the planting and leaving of trees.

But the Farm Forestry Association believes NZ can’t afford to delay planting more trees to address its climate change obligations so exotics should still be able to be registered under the ETS.

“It would be folly to take that option away,” president Graham West said.

“There’s a lot of misinformation about permanent forestry.”

He estimated about 140,000ha had been planted but the issue of rural decline had been inflamed. Landowners should be able to make decisions about what their farms were used for as a basic property right. Many had taken advantage of the returns from planting exotics on difficult harvesting areas which were not suitable for production forestry because of their distance to the nearest port.

The association has suggested a way to tackle large-scale purchasing of sheep and beef farms for forestry could be Government paying half the guaranteed price of carbon income up front to cover their establishment costs. Then farmers could make their own decisions about what species to plant and whether an understorey of natives could be encouraged, increasing biodiversity.

The Government is also consulting on a proposal to adjust how the new carbon accounting method (averaging accounting) applies to remote and marginal land for harvesting. It puts forward an option to create a “long rotation” category for Pinus radiata which isn’t profitable to harvest at 28 years. Forests in this category could be harvested before they reach 40 by surrendering NZUs down to the existing 16 year age.

Dryland Carbon has suggested this be lifted to 50 years, which aligns with Maori stakeholder suggestions. It’s estimated about 230,000ha of Maori land could be well suited to forests, with146,000ha remote or marginal and so better suited to long rotation or permanent forestry which may be able to be registered under the ETS.

Feedback is also sought on opportunities for improving incentives for native plantings which are much lower than those envisaged by the Climate Change Commission. The discussion document acknowledges if this was widespread there are still risks for land use change, but they are less than with exotics because of the lower financial returns.

The consultation period runs until April 22 with the Government saying it expects to make final decisions in the middle of the year.

It will consult on proposals which could give councils more powers to decide under the Resource Management Act (RMA) where exotic forests are planted later in the year. It will also consider expanding the National Environment Standards for Plantation Forestry (NESPF) to make sure the environmental effects of existing permanent forests are managed.

Cash in eligible vegetation

Large areas of ETS-eligible vegetation on farms could be generating big returns for landowners.

B+LNZ’s environmental policy analyst, Madeline Hall said these areas may have been planted for soil conservation, shelter, riparian management and biodiversity support. But kanuka and manuka, for example, could generate about $700-$900/hectare under the ETS, based on current carbon prices. And the area where they were growing could still be grazed.

Plantings can be mixed species and include shade plantings over streams if they meet the forest land definition. There needs to be 30% canopy cover, with the trees having an average width apart of no more than 30m. Areas need to be at least one hectare in size and established after 1990 but even if there were some gaps between plantings they could still qualify.

If just 10% of the estimated 2.8 million ha of indigenous vegetation on sheep and beef farms was registered in the ETS by the end of this year landowners could claim credits for the past five years, which could be worth $958 million based on a carbon unit price of $72. It was important farmers begin the ETS registration process as soon as possible to qualify and they could claim back to 2018.

Until the end of this year landowners can choose between two accounting options, averaging and stock change, but in 2023 that will shift to the averaging system. Registration can take between six and nine months and farmers should get advice first. Under He Waka Eke Noa’s proposed agricultural emissions pricing frameworks, more vegetation types could be recognised than under the ETS, but they might not generate the same rewards. However no double-dipping is possible.

Exotics wiping out farmland

WAIROA MAYOR, CRAIG Little estimates up to 15,000ha of sheep and beef land around the area may have been planted in exotic forestry over the last two to three years.

“At that rate it will only take 13 years to wipe out all our farmland.”

He welcomed the Government proposals saying they were great news.

“It’s about time.”

“But people feel not listened to.”

Now the worry was that in the three months until final moves were decided on further land sales into forestry would go ahead as farmers weren’t able to compete.

“It’s the start not the end.”

“The elephant in the room is what happens to that land in 30 to 40 years time. It’s going to be chaos.”

With the lack of light coming through exotics, natives weren’t able to grow underneath, and there was an increased risk of forest fires with climate change.

While he would prefer a moratorium “forever” on more exotic planting, he said what did take place needed to be looked at on a farm-by-farm basis. To that end councils should be given some control which he’d like to see happen by way of changes to the National Environment Standards for Plantation Forestry.

“And the Government should come down like a ton of bricks on polluters.”

18