- Hon Todd McClay
Today Agriculture and Forestry Minister Todd McClay introduced long awaited legislation that will put a stop to large-scale farm-to-forestry conversions - delivering on a key election promise to protect the future of New Zealand food production.
"For too long, productive sheep and beef farms have been replaced by pine trees in the race for carbon credits. That ends under this Government," Mr McClay says.
"The Climate Change Response (Emissions Trading Scheme - Forestry Conversions) Amendment Bill will restrict wholesale conversions of farmland to exotic forestry by stopping LUC 1-5 land from entering the ETS and capping new ETS registrations on LUC 6 land.
"It will also protect farmers' ability to diversify - allowing up to 25 per cent of a farm to go into trees, while stopping the kind of blanket ETS planting that's been gutting rural communities in places like the East Coast, Wairarapa, the King Country, and Southland."
As previously announced the new restrictions will take effect from 4 December 2024. The law will:
- Restrict farm conversions to exotic ETS forests on high-to-medium versatility farmland (LUC classes 1-6)
- A limit of 15,000 hectares per year for exotic conversions on medium versality farmland (LUC class 6)
- The annual limit of 15,000 hectares for LUC 6 farmland will be allocated by a ballot process, including a reserved quota for small block holders, with the first ballot proposed to be held in mid-2026.
- Allow for up to 25 per cent of a farm's LUC 1-6 land to still be planted in exotic forestry for the ETS, ensuring farmers retain flexibility and choice.
- Protect specific categories of Māori-owned land, in line with Treaty obligations
- The Bill proposes time-limited transitional exemptions in rare cases for people who were in the process of afforestation prior to these changes originally being announced on 4 December 2024.
- To be eligible for a transitional exemption, applicants need to show sufficient evidence that they made a qualifying forestry investment between 1 January 2021 and 4 December 2024.
- Transactions that commenced after this date will not be eligible to register in the ETS.
- The applicant will need to demonstrate that the investment relates to the specific Land Use Capability (LUC) class 1-6 land they are applying to register in the ETS.
- Registry of 25 per cent of LUC 1-5 land will be registered against the properties title to restrict further planting as a result of subdivision.
"Labour's careless ETS settings turbocharged the sell-off of our farming base. They let speculators put short-term profits ahead of long-term food production. That was careless - and it ends now," Mr McClay says.
"This Government is backing farmers, restoring balance, and making sure the ETS doesn't come at the cost of New Zealand's rural economy.
"This policy is pro-farming, pro-food production, pro-commercial forestry and pro-rural New Zealand."
The legislation is now before Parliament and is to come into force October 2025.
For more information: Forestry ETS Changes
