The Government has provided the ability for voluntary carbon or nature/biodiversity market schemes to be ‘approved’.
What has been announced
Voluntary carbon or nature/biodiversity market schemes can now be ‘approved’ by the Government. This is designed to give landowners and investors in voluntary markets more confidence that these markets are credible and well-run.
The Government has also decided to allow private investment in these markets on Crown land. This includes high-country leased lands as well.
Pre-existing high-quality schemes managed by reputable international bodies are automatically approved, and a new pathway for New Zealand schemes that meet set standards will open in a few months.
Context
Voluntary nature and carbon markets allow private money to fund projects that improve biodiversity or remove greenhouse gases.
That can include work such as:
- wetland restoration
- native planting
- habitat protection – for example pest management
- carbon removal.
These projects can generate ‘credits’ which are sold to companies or individuals wanting to show the evidence of their sustainability work.
For farmers, landowners, iwi, Māori, and community groups, these markets could provide an additional income stream to support on-farm environmental work.
The expected demand for these credits is expected to increase as global companies face stronger pressure to report and manage their emissions and biodiversity impacts.
What we think
Sheep and beef farmers are already doing a lot to protect and enhance the environment. It’s important for farmers to be recognised and rewarded for their hard work. However, only new or ‘additional’ activities may be eligible to earn credits. This is disappointing but also a reality of the markets operating with high environmental integrity.
‘Additionality’ is a term used to describe how a project demonstrates whether the benefits being rewarded are ‘additional’ to what would have happened naturally without human intervention. It often involves establishing a baseline to measure change from. This could be a point in time or a naturally occurring rate. Credits can be received for additional removal above the baseline.
These voluntary markets can be complex and costly to participate in. In theory, a New Zealand supported scheme would provide a more direct pathway for credit developers to follow. In practice, farmers will need clear guidance and protection from poor-quality schemes or unfair contracts.
This is because the same risks and challenges faced in similar markets (like the NZ ETS) can be further compounded by increased interest and participation in the voluntary carbon markets. We think that additional management requirements should be placed on all kinds of carbon forestry operations.
Voluntary nature and carbon markets could open new opportunities to earn income from environmental work – which B+LNZ supports. While the Government’s move should improve trust and confidence in voluntary markets, farmers still need clear information, strong protections, and practical support to participate successfully. Getting this right will be critical to ensuring these markets work for farmers as well as for the environment.
We will continue to advocate on these points and keep farmers updated.
What’s happening next
The Government is setting up the approval process for domestic voluntary nature and carbon market schemes, expected to be operational within six months.
Recognition of qualifying international accreditation bodies takes effect immediately.
Applications for projects on public conservation land will open later this year.