Introduction

Tell us what you think
Relationship with the Government’s wider climate change policy consultation
About the PFSI
Key features of the PFSI

In this document you can read about the Ministry of Agriculture and Forestry’s (MAF) proposals for:

regulations for the Permanent Forest Sink Initiative (PFSI), including:
- the application process and eligibility of land,
- harvesting restrictions,
- carbon accounting and participants’ entitlements to units,
- record-keeping requirements,
registering of certifiers;
cost recovery methods and fees for the PFSI;
managing the risks associated with the PFSI;
a forest sink covenant.

MAF would like to receive feedback on these proposals. We will review any feedback before finalising the regulations, cost recovery methods, fees and covenant.

Tell us what you think

To tell us what you think of our proposals, please complete the submission form at the end of this document and post it to:

PFSI Regulations Consultation
Indigenous Forestry Unit
Ministry of Agriculture and Forestry
PO Box 25-022
Christchurch

Alternatively, you can download the submission form from MAF’s website http://www.maf.govt.nz/forestry/pfsi/consultation-document/pfsi-consultation-form.doc, complete it, then email it to ifu@maf.govt.nz

Please ensure your submission reaches us by 14 May 2007

If you wish to discuss your submission with MAF officials please indicate this on your submission form.

Further information about this consultation and the PFSI is published in the PFSI Bulletin. If you would like to receive this bulletin, please email ifu@maf.govt.nz.

Please note that your submission will be subject to the Official Information Act 1982 and may need to be publicly released. If you object to the release of any material provided in your submission, please specify the material that you consider should be withheld, and the grounds for withholding it. Please note that even if you do identify specific material that you consider should be withheld, we cannot guarantee that we will withhold this material. All requests under the Official Information Act need to be assessed in terms of the Act and while we will take into account your views, we are not bound by them.

Relationship with the Government’s wider climate change policy consultation

In December 2006 the Government released the discussion document Sustainable Land Management and Climate Change: Options for a Plan of Action. This document discusses two options for encouraging afforestation. The first option is an afforestation grant scheme. Under this option, parties would be invited to tender for a grant for the establishment of new post-2007 Kyoto-compliant forests. The second option is to concurrently offer landowners the option of either an afforestation grant scheme or devolving sink credits and their associated liabilities for Kyoto-compliant forests established from 2007 onwards. The devolved credits and liabilities mechanism (DCL) could operate in a similar manner to the PFSI.

The PFSI could run alongside either of the afforestation options in Sustainable Land Management and Climate Change. It will proceed no matter what other policy options are chosen.

The Government has not decided what differences there may be between the PFSI and the DCL options, but key differences between them could be:

harvesting restrictions;
retention of credits (the Crown might retain a greater proportion of credits from participants in the DCL option to cover the risk to the Crown of people defaulting on their obligations);
eligibility dates (only forests established from 2007 onwards would qualify to enter the DCL option);
no ability to receive assigned amount units (AAUs) under the DCL option,¹ participants would receive removal units (RMUs).² The possibility of receiving AAUs under the PFSI is discussed in this paper.

Sustainable Land Management and Climate Change is available from www.maf.govt.nz/climatechange

About the PFSI

The PFSI is a government initiative that promotes the establishment of permanent forests on previously unforested land.

The PFSI enables landowners to generate income through “carbon forestry” – removing carbon dioxide from the atmosphere and storing it in new forests. The owners of the new forests will be able to claim Kyoto-compliant emission units for increases in the amount of carbon stored in their forest.

Because carbon forestry does not necessarily require roads to be built or trees to be harvested, it is well suited to isolated or erosion-prone land.

The PFSI will be administered by MAF’s Indigenous Forestry Unit (IFU). More information about the PFSI is available on MAF’s website (www.maf.govt.nz/forestry/pfsi/).

Key features of the PFSI

The initiative is voluntary.
Participants in the PFSI will receive tradable Kyoto-compliant emission units.
Participants will have to meet all costs associated with generating emission units and agree to replace any units if there is a decrease in the carbon stored in their forest.
The rights and obligations of participating in the initiative will be formalised in a contract (covenant) between participating landowners and the Crown. The contracts will be registered against land titles and will bind all future owners of the land. A draft covenant is included in this document (see Appendix 1).
To be eligible, land must be Kyoto compliant; that is it was unforested as at 31 December 1989. Other eligibility rules apply. These are described on page 5.
Participants will be eligible for East Coast Forestry Project grants if their application includes target land on the East Coast.³
To qualify for emission units, new forests must be “direct human induced … through planting, seeding and/or the human-induced promotion of natural seed sources.”⁴
Participants can harvest timber from new forests provided the forest maintains a continuous canopy cover.
Participants who harvest more than the regulations allow will be required to replace emission units for the carbon dioxide released, plus make a penalty payment.
Should the Kyoto Protocol no longer allow emission units to be generated from these forests, the harvesting restrictions will be removed. However, to the extent that carbon dioxide emission liabilities remain for units already received, these liabilities will need to be met by landowners if the carbon dioxide is released into the atmosphere at some future point.
Forestry rights⁵ can include the right to receive units based on carbon sequestration that are received in accordance with a forest sink covenant.
The cost of administering the PFSI will be recovered from participants.

Part 3B of the Forests Act 1949 provides for the implementation of the PFSI. The legislation is available from www.legislation.co.nz.

¹ Assigned amount units are allocated to parties under the Kyoto Protocol based on their 1990 emissions.
² Removal units are generated from Kyoto-compliant forests.
³ Information about the East Coast Forestry Project is available from www.maf.govt.nz.
⁴ Decision 16/CMP.1 Land use, land-use change and forestry.
⁵ A “forestry right” is a legal right of ownership or cutting rights to forests growing on someone else’s land registered as a covenant under the Forest Rights Registration Act.

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