FOREST TALK
ETS uncertainty continues to dog new forest planting; two more forestry deaths last month; new National Environmental Standards will challenge some foresters; NZmade Harvestlines take off in Chile; harnessing tthe Jones effect; training crews part of new focus; Waratah says tech training crucial; results from the latest logging contractor survey; increased mechanisation is reducing wire rope life; competition pushes structural log prices to new record; Toi Ohomai and Scion join forces; first awards a success for southern North Island foresters; upskilling the people in the backoffice; more new forests funded through grant scheme.
FORESTRY IS STILL NO CLOSER TO CERTAINTY OVER THE FUTURE of the ETS scheme in New Zealand, in spite of more information being released by the government.
That situation hasn’t been helped by the election, as the next government could push the changes out even further. None of which will encourage investors to plant more trees.
And that’s frustrating forest owners and wood processors who say that while they appreciate the government needs to fine tune the Emissions Trading Scheme, they believe present uncertainty in the ETS might lead to a reduction in forest planting, just when it needs to increase.
The chairperson of the pan-industry organisation WoodCo, Brian Stanley, says the crucial role of the plantation forest industry in locking up atmospheric carbon needs more certainty in the ETS.
He says: “The government has just announced that it’s working on formulas in the ETS which will recognise that timber locks up carbon just like the trees it’s derived from. That is good – it recognises reality. Carbon may be locked up in a building longer than it was in the trees the building was made from and this should be factored into the ETS.
“There’s also the prospect, which is being considered, that forest growers could get their carbon credits averaged over the rotation of a forest. At the moment, it’s all the credits earned when they plant and all have to be returned when they harvest.
“There ought to be a simple option available for foresters to smooth receiving credits over a forest’s long term average.
“So, what we are concerned about is that the government is in effect sending a message to anyone contemplating planting trees that they should plant later on and not do it now. A potential forester is likely to think they ought to delay a couple of years or more because they might get a better ETS regulatory deal when they plant then.
“The government should simply say nobody is going to be disadvantaged by the outcome of the ETS review if they decide to plant now.”
Brian Stanley also says there is no reason why the government itself should not take an initial lead role in getting forests planted out, even if it exited from ownership once the planting momentum was underway.
“It’s not as though it would cost the government in the long term,” he says. “There’s good income to be made out of growing trees, so long as you are prepared to wait. In comparison, using billions of dollars to buy overseas carbon credits doesn’t return anything.
“Another fear is that if the critical industry labour training and recruitment is not sorted now, there will be nobody available to plant the trees in the rush of volume that will be needed if we delay any further.”
Among the changes the government has flagged that are causing forest owners to re-think their forward plans is a proposal to reopen the New Zealand emissions trading scheme to international carbon credits, though not the disastrous scale of the past that saw local credits plummet in value.
Climate Change Minister Paula Bennett announced the intention to control the number of so-called New Zealand Units (NZUs) of carbon by putting up pre-determined quantities for auction, removing the $25 per tonne upper limit on the price of a tonne of New Zealand carbon and reopening the New Zealand ETS to international carbon credits.
The ETS has been closed to international markets since 2015 following controversy over the flood of very low-cost and highly suspect international carbon credits from former Soviet states.
The other main announcement from Ms Bennett was to commit to decisions about carbon unit supply on a five-year ahead rolling basis to bring greater certainty to the ETS, which has been plagued by uncertainty and policy swings.
How the proposed auction system will work, along with the timing and extent of the price cap changes and access to international markets are still to be finalised. Decisions on treatment of forestry planting in the ETS and the phasing out of ‘free allocation’ of carbon credits to trade-exposed industries will be addressed by mid-2018, the Minister says. No changes in how the ETS operates are expected before 2020.
NZL