Government’s review long-overdue recognition that the ETS isn’t working

// Climate Change

The release of consultation materials on changes to New Zealand’s Emissions Trading Scheme (ETS) settings, including to the permanent forest category, represent long-overdue Government acknowledgement that the ETS isn’t working, says Beef + Lamb New Zealand (B+LNZ).

image of trees on-farm

Chief executive Sam McIvor says B+LNZ has been calling for changes to the ETS since the introduction of the Zero Carbon Bill in 2019.

“The sheep and beef sector and rural communities have been severely impacted by policy settings that have led to out-of-control land-use change into forestry, particularly for entry into the ETS.

“It’s heartening to see the Government has listened to us, to farmers and to the wider public, and we now have some concrete and substantial options on the table that aim to address the issue.

“The Government has acknowledged that too much exotic planting is happening and that the current ETS settings are not driving real emissions reductions.

“What has been released is significant – in terms of the scale of reform being considered for the ETS, but also in terms of the volume of information. It will take us some time to work through the details and test the options with farmers.

“From our initial analysis, some of the options for changes to the ETS settings are going to be more effective than others – and some seem to be out of step with what the Climate Change Commission has recommended. However we’ll continue to examine all the options in detail.

“Our early analysis also indicates there are some good concrete options for changes to the permanent forest category of the ETS. We will continue to push for settings in this area that restrict the amount of whole farms being converted into carbon-only farms, but that still encourage and enable the integration of trees on farms and that work for Māori farmers. 

“We also welcome the consultation’s consideration of recognising a wider range of forms of sequestration such as pre-1990 natives and wetlands (either through the ETS or other mechanisms) and giving greater reward for these types of sequestration, as they also deliver wider environmental outcomes, such as biodiversity. 

“B+LNZ is not anti-forestry. What we’re concerned about is the scale and pace of whole farms that have been sold in the last few years to convert into forestry, which has been driven by the carbon price. We are very supportive, however, of the integration of trees within farms. 

“Many climate policy settings globally focus on incentivising forestry that deliver co-benefits, such as a focus on natives and the integration of trees within farms, rather than large scale plantation forestry as New Zealand’s policy settings currently do.”

B+LNZ will provide analysis to farmers and seek feedback from them for its submission on the consultation, which closes on 11 August. It will also provide advice to farmers on how they can take part in this important process by making their own submissions.


For more information, please contact James Ford on 027 235 9806 or