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Newsletter 147, November 2023

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In this issue

President's Comment

Neil Cullen,  NZFFA President

Democracy has happened and the majority have voted for change. Now we await to see what that will mean for forestry and what status the Minister of Forestry has in the new government. What is clear is that our sector has a great potential to increase its earnings through exports of a variety of products while decarbonising our economy. Continued support is needed for the work begun under the Industry Transformation Plan. Support is also needed for TUR’s regional advisors around the country as they have a key role along with NZFFA in increasing the diversity and resilience in our forests. More work is required to win back the recently diminished social license for forestry needed from the general public. Farm Forestry has a role here as well planned and managed woodlots on farms create the mosaic effect on our countryside that the public seem to prefer.

Farm Foresters need to be aware of the increased role that Regional and Unitary Councils have in regulating forests both through the new NES-CF in effect from 3/11, and their Land and Water Plans which are currently being developed around the country. Members can help influence these plans by submitting when they see proposed rules that will impact on where and how they can manage their forests.

Events

For more information on these events, they are posted on the NZFFA website »
Branch secretaries, please make sure you notify head office of any branch or action group events.

Headlines

Council meeting 9th November

As usual we'll be holding a Council meeting next month to review what we are doing and how well we are doing it. In theory the Council provides the NZFFA's governance body while the Executive ensures the work is done. In practice few councillors seem to understand or feel strongly about what the organisation does, and so the Executive takes all of the responsibility and makes all of the decisions. Anyone who doesn't like that and speaks out is immediately identified, tied hand and foot and forced to stand for the Executive at the next elections, where they are appointed unopposed and given a job to do. They may even make President, since we broadened the criteria last time to capture even those with a whiff of initiative.

As more of you reach retirement age and solve the difficult problems of succession, you might consider taking a more active role. We've already shared our own years of mistakes, failure and prejudice and we need some fresh experience or we'll run out of things to argue about. We've even started telling each other about our medical conditions, which is a fatal sign: age is clearly overtaking ability. The NZFFA is meant to be a loose collection of friends, interested in trees and learning from each other. It's not something you pay for and receive a service. If you can't share your time, then share your opinions and experiences by leaning on your councillor, sending in your photo collection, writing to the newsletter, or writing to Julian for the Tree Grower. When you give something back we'll all be richer for it. But spare us from your medical condition. 

9 November Council Meeting Agenda

DRAFT 31 March 2023 Council Meeting Minutes

New scale of charges for participants in the forestry ETS

NZFFA members with forests registered with the ETS should be aware that:

  1. MPI has been granted authority to recover around $30 million a year of its costs to manage forests in the ETS.
  2. Its new schedule of charges includes an annual fee of $30.25 per hectare.
  3. It started issuing invoices for the new charges on 19 October, although the process is being challenged with a judicial review.

The costs of MPI administering the forestry ETS have increased with its complexity over the years. In an attempt to control costs, in February MPI introduced a new IT system intended to help growers file returns and changes, but “Tupu-ake” has been a great disappointment. Users have complained that it does not have a tenth of the capability of the manual system it replaced, and the 200 page user guide is inadequate. The system is believed to have logged over 27,000 requests for help and many growers have resorted to sending emails directly to MPI. Some argue that Tupu-ake was so poorly designed that it should be thrown out, and a new system built in full consultation with forest owners.

Although MPI is defending its software it has had to hire extra staff to help users. The costs of this were unexpected, and have fallen on top of the cost of the software itself, and of course on top of the costs of the developers’ efforts to fix it. This seems to have prompted a full review of its scale of charges.

MPI has consistently argued that the costs of running the forestry ETS should be recovered from those who benefit from it. Accordingly it has recently won legislative approval for an updated range of charges to recover $30 million a year from ETS participants. Half of this will come from a new $30.25 per hectare per annum charge on all forests in the ETS (currently over 500,000 ha).

Although these charges were flagged in earlier consultation they have been introduced much sooner than expected. Growers thought that MPI might take into account:

  • This year’s ‘final advice’ from the Climate Change Commission to the Government, which affects carbon prices.
  • The results of the general election, in case coalition partners want further changes to the ETS, or to the Commission, or to the Commission’s mandate.
  • The new Government’s views on the role of forestry in climate change mitigation and the New Zealand economy.
  • The new Government’s views on the costs that MPI is incurring – and seeking to recover – from the forestry ETS.

Opposing the new charges and the urgency with which they have been levied, growers are challenging the fees regime with a judicial review in the High Court. Parties to the action represent the owners of more than 300,000 hectares of forests. Despite this MPI has proceeded with its charging schedule, noting that “While an application for judicial review has been made, the cost recovery regulations are law, and we will begin implementing them from 19 October.”

It is worth being aware that:

  1. At present the annual per hectare charge of $30.25 is around half the cost of one NZU. A growing forest may be earning 20-30 NZUs per hectare per year. However;
  2. The per hectare charge will continue as long as the owner is registered with the ETS, whether or not they are earning NZUs; and it may be revised up or down at MPI’s discretion.
  3. Participants can leave the ETS at any time provided they fill in a two page form, pay a modest fee and return any NZUs owing. [see https://www.mpi.govt.nz/forestry/forestry-in-the-emissions-trading-scheme/joining-the-ets/deregistering-from-the-ets-for-forestry/].
  4. The Climate Change Commission will shortly offer its ‘final advice’ to the Government, perhaps by mid-November. Some commentators are bullish for the continued future of forests in the ETS, but the Commission might not be.

For the moment the new charges are unlikely to drive growers out of the ETS, but they come ahead of the Commission’s advice, and on top of problems with Tupu-ake. In combination these have the capacity to diminish growers’ confidence in MPI, add investment uncertainty and discourage growers in their efforts to help the country meet its targets.

You may wish to support or at least keep an eye on the judicial review. This is a legal challenge to MPI’s authority to introduce the charges and if that process was illegal the charges must be withdrawn, saving growers around $15 million a year. Please talk about it to other small forest ETS participants you know outside of the NZ Farm Forestry Association.

Jeff Tombelson, Howard Moore.

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Poplars Willows, Eucalypts - new lookup tables for exotic hardwoods

MPI is consulting on introducing new lookup tables for space-planted exotic hardwoods, which will affect all of us with poplars and willows under the ETS.  Since 2008 we've been earning NZUs for poplars and willows based on E. nitens growth rates and stockings of around 400 sph, so this correction will come as a bit of a shock.

Also, MPI has discovered that it doesn't have growth models for E. nitens beyond 35 years, and obviously eucalypts planted in 1990 and entered in the ETS will soon be running out of table. However there is information for E. fastigata out to 45 years, so MPI wants to change the lookup table to fastigata. This will mean a slight reduction in NZUs per hectare as fastigata doesn't put on the same bulk as nitens, but the change is within the margins of error.

We have made a submission on the proposed changes which says, in short, "The NZ Farm Forestry Association agrees with this review of the default carbon tables for exotic hardwoods under the Emissions Trading Scheme and believes it is long overdue." 

We are also supporting work being done to update the lookup tables for other species, so that they can fairly compete on their merits. Of course the costs MPI incurs in making all these improvements will go straight into their new schedule of charges, so they both giveth and taketh away. Such is life.

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Proposed biodiversity credit system.

Another consultation under way is on whether the Government should introduce a form of biodiversity credit to reward people for protecting and improving habitats and biodiversity. Julian Bateson is drafting a submission for the Association, having had experience working in this area in the UK. I find it's a spooky area for several reasons.

First, we all love furry animals with big eyes but frankly, most biodiversity is either sharp, slimy or poisonous. Sometimes, like shellfish, it's all three. We have evolved to distrust biodiversity, since it can make us very unhappy. Some of you will remember a mind expanding presentation by Wink Sutton in which he pointed out that world-wide, we eat around 5 varieties of animals and half a dozen grains and ignore the rest, because there are few that we find both safe and easy to grow. If God had wanted us to embrace biodiversity he'd never have invented steak, Starbucks and sliced bread. 

Second, if there is a biodiversity credit there must be a biodiversity liability, as in carbon credits. That means a loss of biodiversity, for example by having your block over-run with deer, would trigger the need to return credits. This implies not only regular monitoring but also a penalty regime to keep you honest and encourage you down the right path. Our experience with the ETS suggests that this could be rather complicated.

Third, if you earned biodiversity credits you'd want to sell them to someone who might buy them to offset their nasty environmental behaviour, in the same way as if they were an emitter under the ETS. This gives rise to three further issues: the moral one is why should anyone support the nasty behaviour of the 'emitter' by selling them credits? Why not just insist they clean up their act? The commercial one is how do you cancel the credits issued to the 'emitter' so that they are out of circulation? And the legal one is how do you define an 'emitter' under the scheme and enforce an obligation on them? 


Degraded wetland should carry a biodiversity charge

These are all peripheral to the actual measurement and reward structure that the consultation seems to be about, but hey, it's early days, What we say in our submission might be ignored, the proposed scheme might be scrapped and even if it is introduced it will inevitably be changed within a year. All you can be sure of is that we'll give an opinion, If you want yours included, please contact Julian with your views on bateson.publish@xtra.co.nz  within the next few days. Submissions close at the end of next week

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Additonal Shows

Mystery Creek was so much fun that we have decided to take the NZFFA displays to the Southern Field Days at Waimumu, Gore, on 14-16 February and then to the Central Districts Field Days at Manfield, Feilding on 14-16 March next year. The idea is to showcase the NZFFA, attract the public, give them some value and help build our profile and membership. Members are invited to help, not only from the local branch but anyone wanting a break to see new things and meet new people. We'll call for volunteers nearer the events, but if you enjoy that sort of thing, put it in your diaries. It's bound to be social. 

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President: Neil Cullen cullen@farmside.co.nz

Newsletter editor: Dean Satchell dsatch@gmail.com

National Office: Liz Chamberlain admin@nzffa.org.nz Phone: 04 4720432

NZFFA Executive »

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Disclaimer: Personal views expressed in this newsletter are those of the writers and do not necessarily represent those of the NZ Farm Forestry Association.
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