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A brief overview of the New Zealand Emissions Trading Scheme (ETS). The system is complex and has very detailed rules such as which land and trees can and cannot be entered, how a forest area is defined and measured, how carbon credits are calculated and the legal obligations.
This is not a complete guide for landowners wanting to claim "carbon credits".
The dataset - What is it?
Forest owners who enter the NZ ETS can earn NZUs by sequestering carbon dioxide in their trees - in post 1989 eligible forests.
If the carbon stock decreases (i.e. harvesting, fire, pests), the forest owner may need to return some of these NZU's to the government. What this means for landowners is that the owner may need to retain some NZUs or buy them in the carbon market, where the price is determined by supply and demand.
There are two approaches for calculating carbon sequestration which depends on the total forest area entered in the ETS and there are also two accounting methods used, further guidance should be sought.
Why it's important
This quick reference to the ETS and the ETS Lookup Tables can be used to help understand how the sequestrations and emissions of forestry are calculated and accounted for.
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How to use this information safely
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Fitness for purpose / limitations
This table indicates whether the dataset is suitable for different types of questions at different scales.
Note: Users should carefully consider their purpose as this dataset may not be suitable.
Operational
Absolute
Relative
Screening/scoping
Block/farm
Yes
Yes
Yes
Yes
Multi-farms(5+)
Yes
Yes
Yes
Yes
Catchment
Yes
Yes
Yes
Yes
National/regional
Yes
Yes
Yes
Yes
Caveats
Standard Carbon tables apply only to ETS participants with less than 100 ha registered. Their intended purpose is to allow the NZU entitlement of forest owners to be calculated, and hence potential carbon revenues to be estimated (assuming NZUs are sold). They do not necessarily provide an accurate estimate of actual carbon stocks or sequestration at block, farm(s), catchment or national levels, such as would be required for owners with over 100 ha or for international reporting analyses. The tables are unlikely to be fit for these purposes.
Dataset attributes
Spatial extent
Radiata pine carbon tables are provided for ten regions, while tables for the other four forest types are national. The radiata pine regions are defined in the legislation according to territorial authority boundaries before January 1990.
Spatial resolution
By design, the tables are regional (radiata pine) or national (all other species).
Temporal extent
The current ETS Standard Carbon Tables will apply until there is a change in legislation and the regulations are updated. The tables do not provide an opportunity to earn NZUs beyond age 50.
Temporal resolution
The ETS Standard Carbon Tables are defined as carbon stokes by age, so that annual increments ca be calculated.
Evaluation method (Validation)
In terms of calculation of NZU entitlement, the ETS Standard Carbon Tables are 100% accurate for forest owners entitled to use them. However, they do not necessarily provide an accurate indication of the mean carbon sequestration expected from afforestation of any particular area or at a national level. Therefore they are unlikely to give an accurate estimate of NZUs that will be earned by an owner with over 100 ha registered in the ETS, who must measure plots under the Field Measurement Approach to derive Participant-Specific Carbon Tables.
Evaluation result (Categorical)
A comparison is provided between the Standard Carbon Tables and tables derived by MPI from weighted ETS Field Measurement Approach (FMA) data.
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Please note:
The Emissions Trading Scheme is complex. It is recommended that you also seek guidance and advice from advisors experienced with forestry and the ETS.
This is only to be used as a guide - and further guidance should be sought.
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