Emissions Trading Scheme ineffective without limits on exotic forestry offsets by fossil fuel emitters

// Climate Change

The Emissions Trading Scheme (ETS) will be ineffective in reducing New Zealand’s greenhouse gas emissions without having strong safeguards in place to prevent the conversion of huge swathes of productive land into carbon farming. This failure will take the focus away from actually reducing fossil fuel emissions, which are required to address climate change.

image of trees on farm

Beef + Lamb New Zealand (B+LNZ) wants the Government to explicitly provide for limits to be placed on the amount of carbon farming available through the ETS to offset fossil fuel emissions.

“We have been concerned for some time over the potential for climate change policy to drive significant land use change away from productive and sustainable pastoral agriculture to exotic plantation forestry for the purpose of carbon farming,” says Sam McIvor, chief executive of B+LNZ.

“The Government has told us there are provisions in the Climate Change Response Act to limit the ability of fossil fuel polluters to offset their emissions by planting exotic trees.

“However, our analysis indicates the Act’s weak provisions do not provide the robust safeguards necessary and increase the risk of challenge should the Government decide to use the legislation to limit units from forestry.

“As it currently stands, the Emissions Trading Reform Bill will not achieve its stated aim of reducing emissions, but will simply lead to increased offsetting. We are alarmed the Government is rushing through these reforms, which will have significant consequences for sheep and beef farmers, rural communities and future export revenue.”

B+LNZ is seeking changes to the legislation so that carbon farming and essentially fossil fuel emissions can be limited.

“This will provide some safeguards to protect our sheep and beef farmers and rural communities from the risk of large-scale land-use change as the carbon price is allowed to rise through these changes to the ETS,” says Mr McIvor.

“As the economy emerges from COVID-19, it is vital there are safeguards in place to prevent fossil fuel emitters from having a carte blanche ability to offset all of their pollution on our landscapes, at the expense of a sector that is worth 16 per cent of New Zealand’s exports and supports about 92,000 jobs."

B+LNZ is also seeking legal advice on the adequacy of existing provisions in the Climate Change Response Act.

“Sheep and beef farmers recognise they need to do their bit to mitigate climate change, but the Government’s proposed reforms to the ETS will have massive implications for the sheep and beef sector if all sectors of the economy are not incentivised to reduce emissions rather than purchase offsets.

“Excessive exotic forestry plantations do come at a cost. They will hollow out rural communities, result in regional job losses and shift pollution from somebody else onto farms.

“Limiting the units available from exotic forestry has to be an integral part of setting emissions caps to avoid industries buying credits instead of reducing emissions. 

“We also have no confidence that the Government will be able to bring in the right safeguards through changes to other legislation in the future.”

B+LNZ’s analysis indicates that since 2019 about 70,000 hectares of productive sheep and beef land has been, or is in the process of being, converted into forestry. This is approximately 13 times more than the average annual amount of afforestation in New Zealand over the past five years. B+LNZ believes carbon related investment is a significant part of this.

As the carbon price increases, the rate of conversion is likely to accelerate and spread around the country. The Government’s own projections show sheep and beef farmland decreasing by nearly 20% over the next 15 years, and the land in exotic forests increasing by 25-30% over the same timeframe.

This is supported by modelling by the Parliamentary Commissioner for the Environment last year. The Commissioner estimated 5.4 million hectares of land would need to be converted into forestry to meet the Government’s Zero Carbon Bill targets (which is about 60% of productive sheep and beef land). As a result, the Commissioner recommended halting the use of forestry to offset fossil fuel emissions.


For more information, please contact Sam Halstead on 027 474 6065.