Emissions Trading Scheme (ETS) Update
A mandatory emissions return (MER) is due to be filed with the Ministry for Primary Industries (MPI) for the five years ended 31 December 2017 byall registered post-1989 forest owners.
The need to file a return has highlighted the fact that many farmers (and indeed accountants and lawyers) are not aware of their emissions trading scheme (ETS) responsibilities when land has been bought or sold. MPI is very vigilant in this area and penalties apply if the correct transfer of participation forms have not been completed as part of the purchase and sale process.
The MER returns will also be more complicated than previous emissions returns. This is especially so where any trees on registered post-1989 forest land have been harvested or you don’t have the correct details or authorised persons on your account(s).
If you have 100 hectares or more of post-1989 forest land registered in the ETS you will need to complete field measurements in your MER. The field measurement approach will calculate your forest’s carbon stocks. If you have reduced your registered forest area to below 100 hectares, then you use look-up tables to give pre-calculated values for a forest’s carbon stock based on its age, region (if Pinus radiata) and forest type.
Where all of the land has been deforested, the land must be removed from the ETS (unless replanted). The removal is done by filing a deregistration form. If only one area of land has been removed then a “remove a carbon accounting area” form needs to be submitted.
This serves as a good reminder that this is an opportunity to collect the second five years’ worth of carbon credits with the traded carbon price currently sitting at around $21.40 per tonne.
Other opportunities in this process may involve:
Reverting indigenous vegetation or native/amenity forests.
Registering plantings of poplar and willow (that are greater than 30m wide on average) and unlikely to be felled due to the protection purposes they were planted for.
Registering any pinus radiata plantings that have not been previously registered because of the uncertainty around the ETS.
What is certain is that the ETS is here to stay; the carbon price has increased substantially from previous lows, and the compliance around the scheme is going to be enforced. However, there is a lot of uncertainty around original registrations and what this means regarding the filing of the mandatory MER.
Don’t leave it until the last minute – talk to an ETS expert or your adviser about your situation.