Carbon Farming

Driving substantial carbon revenue from mixed native and exotic forests

New Zealand’s Emissions Trading Scheme has created strong economic incentives to convert rural land into pine forests for the purpose of carbon farming, at the expense of biodiversity and better ecological outcomes.

This places landowners in a bind: whether to seek near-term economic outcomes via planting permanent pine forest, or to forgo carbon revenue, but achieve much better ecological outcomes.

The reality is that there are non-pine exotic species that are great at storing carbon and delivering revenue, via the sale of carbon credits (NZUs), as well as helping New Zealand meet its climate change goals.  These exotics don’t spread across the landscape like pines do, so they are much more environmentally friendly.

In addition, most of our available species qualify for enrolment in the Emissions Trading Scheme, which means that they can drive income from your land while also improving biodiversity.  Best of all, because a well-chosen mix of natives creates an ideal “nursery” for a wide range of indigenous plants and animals, you can begin the process of establishing native bush on your land using a handful of plant species today, and let nature take its course in the years to come.

Carbon Farming basics

Planting trees is the most cost-effective way for New Zealand to meet its carbon reduction goals.

As trees grow, they sequester (absorb) carbon dioxide from the atmosphere, using it as fuel for growth while releasing oxygen into the air.

When landowners plant new forests they can choose to enrol them in the Emissions Trading Scheme (ETS), and receive carbon credits (NZUs) annually from the New Zealand Government in accordance with the amount of carbon dioxide sequestered per hectare of forest. The NZUs earned by the landowner can in turn be sold to generate cash returns. This process is known as “carbon farming.” At current NZU prices, carbon farming is economically competitive with agriculture and other land uses, particularly in hill country or areas not well-suited for running stock.

Most of Balanced Forestry’s plant varieties are classified as “forest species” by the Ministry of Primary Industries (MPI), which means that they can be used to earn and sell NZUs. Carbon farming offers landowners a way to derive significant annual revenue as their forests grow with minimal cost and effort. In this way, an investment in mixed native and non-wilding exotic carbon farming offers a means to improve ecological outcomes and reduce net emissions while also diversifying revenue from land and offering decades of passive income.

Furthermore, unlike production forests such as radiata pine, which are harvested every 25-30 years, native and permanent exotic forests (such as Redwoods)can be left in place for many decades and will continue to sequester carbon dioxide from the atmosphere for 75+ years. This means that carbon farming with a well-considered mix of native and non-wilding exotic species can benefit the land for generations to come.

There are several requirements that need to be met before being able to join the ETS. We recommend you look at MPI’s Fact Sheets on joining the ETS, or talk to us directly to understand if your land qualifies.
https://www.mpi.govt.nz/dmsdocument/6975-Joining-the-ETS