Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Profit-rich foresters might quit ETS

Profit-rich foresters might quit ETS

January 18, 2013. Media release

Forest owners who have made a tidy profit by selling carbon high and buying low are now looking to quit the Emissions Trading Scheme, Carbon News reports today.

In 2008, the forestry sector became the first to enter the scheme.

The idea was that giving the owners of post-1989 forests tradable credits for the carbon stored in their trees would encourage planting.


And, at first, it worked. Influential forestry companies such as PF Olsen and Ernslaw One entered the market, and carbon forestry projects sprang up.


But that was when spot NZUs (the units issued to New Zealand forest owners) were worth between $18 and $24 a tonne. In 2010, they started falling on the back of cheap international prices, and today spot NZUs are worth around $2.50.

Figures from the New Zealand Emissions Unit Register show that New Zealand emitters are now using four times as many international units as foreign units to meet their carbon obligations, according to Carbon News, the country's specialist information service on carbon markets.

In September, the heads of eight forestry companies, who between them control about 70 per cent of the country’s plantation forests, wrote to Prime Minister John Key asking him to intervene directly to stop the flow of cheap carbon credits into the country.

Carbon News understands that companies that sold credits in the $20 range in the first few years of the scheme are now buying European carbon at around 40 cents a tonne in order to meet their own looming carbon liabilities from harvesting their forests.

As one source said, that leaves them with a huge profit and little incentive to stay in the scheme.


Forest Owners’ Association chief executive David Rhodes has now confirmed to Carbon News that several forestry companies are looking at quitting the scheme.

“I wouldn’t be surprised if they do,” he said, “I expect some will.”

Rhodes said that at $2.50 a tonne, it wasn’t worth the work involved in monitoring and measuring the carbon stored by forests and meeting the compliance requirements of the ETS.

ENDS


© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Forest And Bird: Misinformation Circulating On Biodiversity Policy

Forest & Bird is concerned at misinformation circulating regarding a policy statement aimed at protecting New Zealand’s unique biodiversity. The National Policy Statement for Indigenous Biodiversity is being consulted on by the ... More>>

ALSO:

NIWA: Scientists Say Methane Emitted By Humans ‘vastly Underestimated’

NIWA researchers have helped unlock information trapped in ancient air samples from Greenland and Antarctica that shows the amount of methane humans are emitting into the atmosphere from fossil fuels has been vastly underestimated... More>>

ALSO:

SMC Expert Reaction: Record Dry Spells And Effects On Forests

With no rain forecast before Sunday, Auckland is about to break a record for the city's longest dry spell. Niwa says Auckland is likely to hit 40 consecutive days without rain this weekend . The upper North Island is seeing severe meterological ... More>>

ALSO:



Reserve Bank: Official Cash Rate Remains At 1.0 Percent

The Monetary Policy Committee has decided to keep the Official Cash Rate (OCR) at 1.0 percent. Employment is at or slightly above its maximum sustainable level while consumer price inflation is close to the 2 percent mid-point of our target range. ... More>>

ALSO:

Science Media Centre: Novel Coronavirus Detected In China – Expert Reaction

The virus was detected after more than 40 people were hospitalised with pneumonia in Wuhan City, China and the outbreak traced to a large animal and seafood market. The Centers for Disease Control and Prevention reports that person-to-person transmission ... More>>

ALSO:

NZ First: Launch Of Parliament Petition To Remove Aluminium Dross

This afternoon to a crowd of over 100 people in Mataura -- Mark Patterson, New Zealand First List MP based in Clutha-Southland launched a parliamentary petition regarding the aluminium dross issue in Mataura, Southland. The petition asks that the House ... More>>

ALSO: