Carbon Forestry

Woodbank has an intricate knowledge of the key drivers in Carbon forest investments and how best to leverage these for investment growth.

The opportunities in carbon forestry have arisen from the NZ Governments implementation of the ETS and the subsequent aforestation projects that have arisen from it, such as the Afforestation Grants Scheme (AGS) and the Permanent Forest Sink Initiative (PFSI).

Under these schemes and others, Woodbank has been involved in establishment and management of carbon forest investments for clients with a range of species including Eucalypts and Radiata. We have also been assisting existing ETS participants (Forest Owners) with registrations and mapping to obtain New Zealand Units (NZU’s). All forest owners should be aware of the opportunities available to them under the ETS.

Our services include:

  • Carbon forest financial modeling and feasibility analysis
  • Investment prospectus compilation
  • Land purchase negotiations
  • Species selection
  • Establishment
  • Forest management

Importantly our niche is assisting clients interested in the opportunities of carbon forestry and optimizing any investment. We have a number of approaches in this area, contact us to find out how we can help you.

Existing forest owners
Carbon sequestration can provide a regular income stream for the forest owner, without the need to wait until harvest. Income from carbon sales is effectively an advance on harvest proceeds, if managed appropriately.
If your forest was planted prior to 1990, you may be eligible for a one off free allocation of up to 60 NZUs per hectare. These units are compensation for not being able to change land use without incurring deforestation penalties.
Woodbank can help you profit from the ETS by working through the process from establishment to registration and sale.

Our services include:

  • Registering your forest for the ETS/pre 1990 free allocation
  • Preparing the mapping files required for registration
  • Submission of an Emissions Return on your behalf
  • Aggregation of NZUs into economic packages to maximise your selling price
  • Planting your new carbon forest

Can I make money from my existing forest under the ETS scheme?
Yes, depending on the year of establishment of your forest and what the land was being used for previously, there are a number of ways you can profit from the ETS Scheme.

Can I make money from establishing a new forest for carbon?
This all depends on the future price of carbon and the upfront costs of establishing your forest. Contact us for advice in this area.

I have a 60 hectare block of 30 year old trees at the back of my farm that I will replant after harvest – should I register them under the ETS?
Yes, if your block qualifies under the Forestry Allocation Plan you may be entitled to a one off gift of up to 60 units per hectare. You are still able to harvest and do not have to surrender the units, as long as you replant. As your forest is over 50 hectares you are unable to obtain an exemption so you might as well claim the free units.

I have a block of 40 hectares of trees that I want to convert to farm land after harvest. What should I do with regard to the ETS?
If you want to deforest the land it is best to seek an exemption from MAF for the area in question (forest must be <50Ha’s in area). Obtaining an exemption will negate any deforestation liabilities.

How much can I afford to pay for land to establish a carbon farm?
This totally depends on your view of the carbon price at a point in time in the future. Many investors are purchasing land now and planting in fast growing species with a view to selling the units from the forest into the carbon market.

Is the registration process complicated?
Given the program is effectively a financial instrument registered against your land, there is a small amount of complexity in the process. Contact us to assist.

I have a Forestry Right over a block of trees and want to harvest the trees next year, can I also claim the credits?
The credits belong to the land owner not the holder of the Forestry Right. Unless your Forestry Right agreement makes special mention of the entitlement to the credits, these opportunities (and liabilities) sit with the land owner.

If I sell my land can the new owner claim credits on the forest on my land?
This depends entirely on what you have done with your credits. Any transactions in the ETS are registered against the land title in question and will appear on a physical land title.

Click here to view more FAQ’s at MAF.