New Zealand Celsias

Owners of exotic forests planted before 1990 have no choice but to participate in the Emissions Trading Scheme. The penalty regime for these
forests has been in force since 2008 and it is important that landowners understand both their obligations and their choices. There is a
compensation plan for the owners of these older forests with NZUs (the equivalent of one tonne of carbon captured) being issued by the
Government and able to be sold. But if you don't claim, you won't gain (and may have to pay).
Pre-1990 forest land is land covered by exotic forest species on 31 December 1989 that has remained in forest, and was predominantly exotic
forest on 31 December 2007. For such forests,no deforestation of areas over two hectares can occur without the landowner incurring substantial
liability for carbon release. "Deforestation" generally means the removal of trees without either replanting or allowing sufficient regeneration. There are particular height, density and canopy coverage requirements before replanting/regeneration can be claimed to have occurred.
Owners of these pre-1990 forests need to make a choice: do they apply for a free allocation of New Zealand Units (NZUs) or (if eligible) for an
exemption from the obligations under the ETS?
A landowner cannot apply for an exemption and an allocation for the same piece of land.
Allocation of NZUs
The Government is providing landowners with a one off allocation of carbon credits (NZUs).
There will be no further allocations for year on year growth for these older forests. Essentially, it is the landowner as at 20 July 2010 (date of issue of the Pre-1990 Forest Land Allocation Plan) who is entitled to this free allocation. This is because the free allocation is compensation for restricted landuse (the forest must now remain forest or you pay back credits for all carbon removed on harvesting).
Eligibility for the maximum 60 units per hectarerequires the forest blocks to have been held by the same owner since before 1 November2002, with a few exemptions. If a transfer has occurred, the lower allocation of 39 units per hectare will apply.
However, only 38% of the free allocation is payable before 31 December 2012, with the remainder being payable in the next period after 2012. If the law changes, some or all of the second part of this allocation may be cancelled. At $20 per NZU this first part of thefree allocation is currently worth $460 per ha (where full 60 units apply) and $300 per ha (where the lower 39 units apply).
Exemptions
If the area of forested land is less than 50 hectares, an exemption from the ETS can be applied for. This land must have been owned
on 1 September 2007 by a person who owned less than 50 hectares of pre-1990 forestry in total. If an exemption is granted then that means
no penalty for deforestation is incurred but also that no credits are issued. Essentially, you have opted out of the ETS.

The application process and deadline
Information is available on the Ministry ofAgriculture and Forestry website for both applying for an exemption and for applying for carbon credits. Requirements include providinggeospatial mapping information for the forest,but this could be prepared using the online mapping tool or by engaging a mapping service provider or forestry consultant. A forest must be registered through a "Registered User" and once approved an NZU Holding Account must be opened. These steps are a relatively straight forward online exercise at www.nzeur.govt.nz.The mapping is more complicated and
assistance is recommended because a wellcompiled map will speed the issue of NZUs.

The deadlines for applications are:
• Exemption for less than 50 hectares: 30September 2011
• For free allocation of NZUs: 30 November 2011
With these deadlines fast approaching foresters need to understand their options, seek advice where necessary and take action