Home NZ Emissions Trading Pre 1990 Forestry Allocation gifting

Pre 1990 :: Gifting of Allocations

The government will be ‘gifting’ allocations to pre 1990 forest holders. This means irrespective of whether you deforest or not pre 1990 forest owners will receive a ‘grandparented’ allocation to compensate for deforestation liabilities.

Pre 1990 :: Example Allocation

This example assumes:

• an overall allocation of 55 million units spread across pre-1990 exotic forests;
• minus units nominally allocated for the 50-hectare exemption for pre-1990 exotic forests;
• minus units nominally allocated for the two-hectare exemption;
• a deforestation rate of 20 percent of the exempt area;
• a carbon price of $15 per tonne of CO2.

This will give landowners with pre-1990 exotic forest an allocation of between 39 and  60 units per hectare depending on changes of ownership after 2002, worth approximately $1200 per hectare (60 units x $20 per tonne; 1 unit = 1 tonne of CO2).

The units are to be allocated in two tranches of around 38% pre 2012 and the balance post 2012, resulting in 23 and then 37 units respectively for those who are eligible to receive 60 units.

Special allowances have been set for Crown Forest land and Iwi based on Treaty of Waitangi Settlements amounting to 18 units per ha.

For a landowner who has no intention to deforest, these units could be sold without incurring future deforestation liabilities. The income from the sale of these units is normally treated as capital in nature and therefore tax free in New Zealand. Units are outside the GST regime.

The allocation plan is now complete and MAF intends to run a nationwide road show - find out the details by clicking this link