The Emissions Trading Scheme may be driving up energy prices after coming into effect on July 1,
but the real impact for farmers won’t hit until 2015.
This is when rural sector processors, like Fonterra, will be stung, says MAF operations manager for sustainable programmes Robert Miller.    

Robert Miller.

He estimates the impact of the ETS on the average dairy farm will be about $3335 per year and on the average sheep and beef farm it will be $1183 per year.   
For forest and land owners, the ETS offers significant opportunities for land development and income to offset emissions from farms in New Zealand.
Robert says forest land is defined as being at least one hectare with trees which are capable of reaching 5m in height at maturity.

Classifications
There are two forest classifications: post-1989 forest and pre-1990 forest.   
Participation in the ETS for forest owners with post-1989 forest land is voluntary and for pre-1990 forest owners is compulsory.    
Robert says as a nation New Zealand is looking to reduce carbon emissions to 1990 levels, by both reducing fuel use and offsetting those emissions by storing carbon.
“While farmers can get the carbon credits they have to account for the loss of carbon resulting from harvesting the trees,” says Robert.
He says that people still have many questions about how to join the ETS and the benefits which exist for them.
“There are different ways of managing the risk.”  
He says of course there is a cost involved when harvesting trees, but there are other options including planting land in forest and not harvesting, or when harvesting using some of the income received for the logs to pay for emissions.  
 
Workshops
MAF has recently run some workshops to help farmers come to grips with this new opportunity for farmers.
“It comes with fish hooks and it is important for people to be aware of risks as well as opportunities.”
Aside from the ETS, MAF has other sustainable schemes in place, says Robert.
The Afforestation Grant Scheme offers the opportunity for landowners to apply for a grant to plant in forests and in return the government will retain the carbon credits for those forests for 10 years.
“It’s that cash assistance to get started – it’s quite an attractive scheme.”
The purpose of the AGS is to encourage the planting of Kyoto-Protocol compliant forest as a way of absorbing greenhouse gases as well as providing other environmental benefits.
Robert says the AGS offers an easier and lower cost alternative to the ETS and is suitable for smaller forestry projects and farm foresters.
The Permanent Forest Sink Initiative is another attractive option for farmers to earn Kyoto-Protocol compliant emission units – Assigned Amount Units (AAU).
“PFSI provides the mechanism to plant a permanent forest on previously unforested land for a permanent store of carbon.
“If people have some marginal land and join the PFSI, they can earn carbon credits on their land.
“We have received to date 35 applications to join the Permanent Forest Sink Initiative (PFSI) covering 10,000ha of forest land.”
Twenty four applications have been approved by MAF and the rest are being processed and 91,000 AAUs have been transferred to PFSI to date, says Robert.  
“In the Emissions Trading Scheme by comparison, MAF is processing 550 applications to join the voluntary post-1989 scheme of which 362 have so far been approved covering 109,000ha of forest.  
“The government has transferred 5.1 million NZ Units to post-89 forest owners in the ETS worth an estimated $100 million.”  

For more information about the ETS, people can call the MAF call centre 0800 CLIMATE and get information about where to apply for the Emissions Trading Scheme and carbon credits.

Alternatively people can visit the MAF website and lodge ETS applications there. Any landowner can identify their land and create a map of the forest that they want to register online.
In August there will be some MAF forestry ETS workshops people can attend which explain a different opportunity for pre-1990 forests.
Under the Kyoto-Protocol, only new forests established after 31 December 1989 are eligible to gain carbon credits.   The government is in the process of finalising an allocation of free carbon credits for these forests.
People with pre-1990 forests are really constrained in terms of deforestation rules (change land use), says MAF operations manager for sustainable programmes Robert Miller.
Robert says people who have less than 50 hectares of pre-1990 forest they can apply for an exemption of deforestation liabilities and can apply for a free allocation of carbon credits.
“This exemption is in recognition of partial compensation for deforestation schemes.”
For more information visit www.maf.govt.nz