Last Chance for Free Money Growing on Trees

The Emissions Trading Scheme (ETS) is moving forward. Despite a recent review report that encourages some tempering in the pace of change, the ETS is in full swing as regards forests in New Zealand.

A key date to be aware of is 30 November 2011, especially if you have more than about 10 hectares of trees on your land and those trees have been there since 1 January 1990. The end of next month is also a key date if you have harvested trees since 1 January 1990 and replanted. Although the actual trees on your land now were not there at 1 January 1990, provided there were trees on your land at 1 January 1990, then your land and trees are “pre 1990 forest land”.

If you have pre 1990 forest land, 30 November is crucial because it is the last chance to apply for free credits (which could be worth about $1200 per hectare of forest land) as compensation for your compulsory entry into the ETS.

Polson Higgs partner Noel Walton has been helping a range of clients with land from Mangonui in Northland to Gore in Southland with their pre 1990 forest land. To date the work has focused on helping clients to make choices about exemptions, applying for credits or doing nothing (while understanding the implications of doing nothing).

“The time for exemptions has now passed. The only choices left are to apply for free credits or do nothing."

“Doing nothing is a valid option if you think the land is best suited to forestry indefinitely and the trees will always be replanted after harvesting. But if you have more than about 10 hectares of pre 1990 forest, consider the simple maths that you might get credits worth about $1200 per hectare (say $12,000 plus) while the costs of getting the free credits are anything up to about $4000 providing you with a return of at least 3 to 1. And you still harvest and replant as you were going to do anyway.”

Noel is happy to talk to any interested people about trees, land use and the ETS. In conjunction with Forest Management Ltd, Noel is able to arrange applications for free credits provided the application is under way by 18 November. It is possible the 30 November deadline may be extended, but don’t bet the farm on it. Treat 30 November 2011 as your last chance to harvest the free money on offer.

For further discussion or assistance with claiming credits, please contact Noel Walton in Christchurch on 03 372 0353 or Tony Wilson in Dunedin on 03 474 9729.

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