Emissions deadline June 30

Gerald Ford | 24th June 2009

Deadlines are looming for forest owners to avoid penalty in a "chaotic" Emissions Trading Scheme build-up, says a Wairarapa consultant.

Forest Enterprises director Steve Wilton said yesterday that owners of small forests less than 50ha had been given until June 30 to apply for an exemption to penalties if they cleared their trees.

Now the Government needs to pass legislation extending that deadline for a year, until the ETS still under review is working.

"They've promised that will happen," Mr Wilton said.

"It's just that everything is chaotic, given that it's the 22nd and the deadline is June 30."

A more important deadline is July 31, by which time owners of larger forests planted before 1990 must apply for compensation for "loss of land use flexibility", Mr Wilton said.

That deadline, too, is set to be extended. Under the ETS, when pre-1990 forests are cut down, they would have to be replanted or a carbon penalty paid, and the compensation recognises the effect that will have. Mr Wilton said it was a "token amount" worth about 7.5 per cent of the true value, but still something that could be counted in "real dollars".

Owners of forests planted in 1990 or afterward still need to be careful, Mr Wilton warned.

Proof was needed that the land had been clear of trees before planting, usually in the form of satellite photos and maps. "All of this costs money & we've spent $25,000 on mapping."

Mr Wilton said because of a review of the Emissions Trading Scheme an election promise by ACT, "everything is being put back, until after the review has finished".

"With carbon credits, to sell them you need buyers and buyers need an ETS platform."

Forests collect carbon every year, and Mr Wilton said right up until December 31, 2012, forest owners would be able to apply for carbon credits from 2008 onward.

"No door has closed. "Our position has been all along that there's no hurry; there's no driving force pushing sale now other than your view of the value: Will the early movers get a premium?

"And of course the time value of money; $100 now is worth more than $100 in five years time our judgment is wait a little longer."

Asked whether Labour and the Greens were likely to support an ETS if ACT declined, Mr Wilton said: "Given it was Labour legislation supported by the Greens you would hope so & but common sense isn't always the prominent thing.

"That is the problem in the MMP environment the nods and winks needed; until the legislation is actually passed, you don't know what deal needs to be done to achieve it. In the bad old days, or the good old days depending on your viewpoint if you talked to the Government you got a pretty good idea of what was going to happen.

"Now they don't know."