An undercover success story
A little-known company is one of New Zealand’s biggest landowners, paying farmers to plant forests. Eloise Gibson reports.
Twelve years ago, New Zealand Carbon Farming was just a concept. Now, it is one of the country’s biggest landowners, and its business model – planting permanent forest – is looking more prescient by the day.
The company was founded in 2010. By late 2019, a Radio NZ investigation looking for the biggest landowners concluded it was New Zealand’s ninth largest landholder, with 28,365 hectares. If the same survey was taken today, the company would have vaulted up the ranks.
It now owns close to 46,000ha, and manages another 44,000ha on behalf of farmers and other landowners. If nothing else had changed since 2019, its land holdings would place it fifth on RNZ’s list, excluding land it manages for others.
Yet few people have heard of the company, which has deliberately flown under the radar until recently.
Its business model is intriguing. First, it finds marginal or unprofitable farmland, then buys it or partners with the landowner. Second, it plants a cover crop – usually pine.
The pine trees aren’t for harvest. They’re to supply a carbon-rich nurse crop, allowing native forest to regenerate underneath them.
While slow-growing native seedlings take root, the faster-growing pine supplies a speedier – and increasingly profitable – source of cash from carbon credits.
A cover of pine trees ‘‘creates the right environment for indigenous trees to flourish beneath that umbrella and regenerate over time’’, says NZCF co-founder and director Matt Walsh.
Why pine? ‘‘There’s a lot of it around, so it’s relatively easy to do research on pine trees,’’ he says. ‘‘New Zealand has 100 years of history of growing pine trees so we know exactly how to grow them and how fast they’ll grow and so that helps reduce the risk. Along the way, they store a lot of carbon . . . [particularly] over the next 70 years [when] the planet needs the most help’’.
The sale of farmland into forestry is deeply unpopular in some rural communities, where people fear loss of farming jobs.
Slash from floods hitting plantation pine is also getting a bad reputation for its environmental impact on East Coast beaches.
Yet Walsh says his company isn’t buying fertile, flat land – it wants the steep or erosion-prone plots, which aren’t producing employment anyway. The trees won’t be clearfelled and, he says, each forest plan is tailored to conditions.
About 80 per cent of the company’s land is in the North Island, mainly in the East Cape and central and southern North Island, Walsh says. There’s some at the top of the South Island and ‘‘a couple’’ of plots in Canterbury.
As for the staff, about half of NZCF’s 28 full-timers work in the field and the other half in its Parnell, Auckland, headquarters. Walsh says the company is in the process of hiring another 15 people, and contracts another 300 temporary workers during planting season.
Over the past decade, NZCF estimates forests under its management have sucked in more than 20 million tonnes of carbon dioxide – the equivalent of almost a quarter of the country’s annual emissions, or taking every car off roads for a year.
It estimates it has more than 66 million trees to its name, about half of them aged 15 years or older. Among those are established forests the company has bought (typically ones planted after 1989, meaning they’re eligible for carbon credits in the Emissions Trading Scheme).
All the company’s forests are registered under the ETS, which requires assessors from the company to go out and physically measure how much carbon has been stored each year.
When companies emit planetheating gases by burning coal or using fossil fuels, the ETS requires them to surrender carbon credits (although the obligation doesn’t fully cover every emitting company).
NZCF’s trees produce carbon credits that count towards meeting other companies’ legal obligations under the ETS. Companies can also voluntarily buy more credits or offsets than they legally have to, so as to market their products as ‘‘carbon neutral’’.
As for how much land is left that’s suitable to plant, the Climate Change Commission estimated there were 1.15m-1.4m hectares of erosion-prone land, much of it unsuitable for production forestry, that could be suitable for converting to permanent forest.
No-one knows how many of those landowners are willing to sell or partner with a carbon farmer, but a number of iwi groups and others have marginal land that would benefit from earning an income, Walsh reckons.
‘‘At the end of this year, our estate will be 73 million trees,’’ he says. ‘‘But for us that’s not nearly enough.’’