Government cancels forestry ETS annual service charges for 2023-24

Annual service charges in the forestry Emissions Trading Scheme (ETS) will be cancelled for 2023/24, Forestry Minister Todd McClay says.

“The sector has told me the costs imposed on forestry owners by the previous government were excessive and unreasonable and I agree,” Mr McClay says.

“They have said that there was insufficient transparency, communication, and engagement around the introduction of the new annual service charges. This compromised the sector’s confidence, which I am now working hard to restore.

“To give participants certainty, we will remove the annual charge for 2023/24. Participants will continue paying for specific services, but they won’t be charged the $30.25/hectare.

“The decision follows the independent review into the cost recovery of the ETS register to ensure its efficiency and cost effectiveness. 

“The review identified a number of issues in the previous government’s settings, and I will now work to rectify these with the forestry sector. 

In the coming months, participants will have cost certainty, and a revised annual charge in place for the 2024/25 financial year that is fair and reasonable.

“There are more than 590,000 hectares of post-1989 forest land in the ETS and around 4,200 forestry participants. We are working with the sector to ensure they have confidence in the function, operability, and cost recovery of the Forestry ETS.”

Mr McClay says this is part of a pre-election commitment to rebuild confidence in the forestry sector. 

“Forestry plays an important role in helping New Zealand meet its emissions reductions obligations. This review is the government’s first step on halting Labour’s attack on forestry through increased costs and regulations,” Mr McClay says.