29 Feb 2024

Government announces independent review of ETS forestry costs

10:31 am on 29 February 2024
Todd McClay

Photo: RNZ / Samuel Rillstone

The government has announced an independent review of forestry's role in the Emissions Trading Scheme (ETS), with the Forestry Minister saying owners have complained of "excessive costs".

Todd McClay announced the independent review on Thursday.

It would begin work in March and report back by the end of April.

It will look into whether the ETS and services relating to forestry were fit for purpose, scalable, and adaptable; whether it was on track to achieve the intended benefits; and whether it "represents cost effective delivery of a bespoke model".

The overall ETS transformation programme, MPI's cost recovery process and fee settings, and inter-agency operations supporting the ETS were ruled out of scope.

McClay said the review would be used to inform decisions on funding decisions, which would include the revenue model.

"Up and down the country forestry owners have been raising concerns about the excessive costs that have been imposed upon them by the previous government," he said.

"We have identified 22 fixed service fees including a $30 per hectare annual fee for participants into the forestry ETS register that forest owners are expected to pay.

"There are more than 560,000 hectares of post-1989 forest land in the ETS and over 4,000 forestry participants. They deserve to have confidence in the system the government has set up to manage their ETS obligations."

McClay said the review was part of a pre-election commitment to rebuild confidence in the forestry sector.

"This review is the government's first step on halting Labour's attack on forestry through excessive costs and regulations," he said.

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