Govt Proposes 50% Reduction in Forestry Emissions Trading Scheme Charges

"We are proposing to lower the per-hectare annual charge to $14.90, down from Labour's excessive rate of $30.25 per hectare per year," McClay said.

The New Zealand Government has initiated a public consultation on a significant 50% reduction in the annual charge for forest owners participating in the Forestry Emissions Trading Scheme (ETS) Registry, Forestry Minister Todd McClay announced today.

"We are proposing to lower the per-hectare annual charge to $14.90, down from Labour's excessive rate of $30.25 per hectare per year," McClay said. The reduction follows an independent review of the ETS Registry, which found that the previous Labour Government's decisions had unnecessarily increased costs for forestry participants.

McClay emphasized that the forestry sector should not bear the cost of these past decisions. "Cabinet has agreed that Labour's choices drove up costs, and it's not fair to expect the forestry sector to pay for their mistakes," he added.

Cost-Cutting Efforts and Service Improvements

Over the past 10 months, the Ministry for Primary Industries (MPI) has implemented efficiencies and focused on improving service delivery for the ETS Registry. These measures have resulted in the proposed significant cost reduction. "We've worked hard to drive down costs while ensuring that the Registry meets the expectations of its users," McClay said.

In addition to the cost reduction, the Government recently established a Forestry Sector Reference Group. This group aims to further improve outcomes for the ETS Registry and find additional savings over the next year. "This partnership between the forestry sector and government will drive better results for everyone involved," McClay noted.

Changes Set for 2024/25 Financial Year

The new annual charge is scheduled to take effect in the 2024/25 financial year, providing relief for forestry participants. The charge will remain in place until a full review is conducted following the current emissions reporting period.

Supporting Forestry and Emissions Goals

McClay stressed that this proposal is part of the Government's broader commitment to rebuild confidence in the forestry sector. "Forestry plays a crucial role in achieving New Zealand's export and emissions reduction targets. This reduction in charges will help support the sector in its important work," McClay said.

Consultation and Next Steps

Consultation on the reduced charge begins today, 23 October 2024, and will run for three weeks. The process will also cover proposed adjustments to the Climate Change (Forestry) Regulations 2022 for participants using the field measurement approach during the 2023–25 period.

Following the consultation, the Government plans to move quickly to finalise the regulations, giving forestry participants clarity and certainty on future charges.

This initiative is part of the Government's commitment to supporting the forestry industry while aligning with New Zealand's broader climate and economic objectives.