30 Days till NZ Votes! Focus on ETS, Climate & Net-Zero Buildings

Wood Central breaks down election policies across the major parties.

Thu 14 Sep 23


In 30 days, New Zealanders will go to the polls and decide whether to give Labour a third term or flip to a National-led government.

The election is a referendum on Chris Hipkin’s leadership, who replaced Jacinta Arden as Labour leader in January. 

However, in the latest polling obtained by Wood Central, Winston Peters could once again become a political kingmaker with neither Labour nor National forming Government without the support of the populist minor party New Zealand First.

Nonetheless, Nationals leader Christopher Luxon is tipped to form a minority government, with the Nationals pushing to limit the conversion of farmland into exotic forestry and prohibiting foreign direct investment for converting farms into forestry.

In the lead-up to the October 14 poll, Wood Central reveals the key policies that will impact the forest and forest-based product industries.

Building and Construction

Both major parties support investment in low-carbon construction materials and push policies that substitute carbon-rich materials like steel and concrete with timber and hybrid construction systems. Last month, the Nationals released its” “Better Building and Construction Policy,” which will fund the Building Research Association of New Zealand (BRANZ) to do more research into the industry’s sustainability.

Housing is a politically contentious issue with NZ amidst a cost of living crisis. Footage courtesy of @1NewsNZ.
The NZ National Party

As revealed in the parties, “Breaking the Barriers to Building and Construction,” the Nationals claim that regulations governing construction materials are too rigid, leading to a breakdown in the supply chain. It also says that rules have led to high market concentrations of certain building products, with a lack of competition driving higher prices.

If the Nationals are elected, building materials and product systems that meet international standards equivalent to New Zealand will be approved for use. 

Crucially, “this includes American, European, British and Australian standards,” with “MBIE notified of all newly imported building materials for approval.”

The NZ Labour Party

Labour is committed to government infrastructure projects, with commitments to fund 14 proposed upgrades to transport infrastructure that the party estimates would cost $70 billion over the next ten years.

Unveiled in the “Upgrading our transport for the future” policy document, Labour will fund mass rapid transport systems in north and north-west Auckland and Wellington.

New Zealand is building its biggest-ever transport infrastructure project. Footage courtesy of @TheB1M.

In addition, the party is committed to social and affordable housing. In its “Our Priorities” pledge, Labour has committed NZ $1 billion to support new or upgraded bulk infrastructure – such as roading, three waters and flood management – to ensure new homes are constructed in areas of high housing need.

It also strongly focuses on Maori housing, with the “Māori Manifesto“, a four-year, $730 million commitment to speed up the delivery of Māori-led housing.

Managed retreat to avoid climate risks

“Managed retreat” has become a critical political debate in the aftermath of Cyclone Garbeille and the Auckland anniversary floods earlier this year.

Earlier this week, Wood Central revealed that up to 15,000 additional construction workers will be required to help recover. 

Surveying the damage to the Pan Pac Whirinaki sawmill in the immediate aftermath of Cyclone Gabrielle. The mill, which generated more than 6% of the region's GDP, has been responsible for a significant proportion of the Napier Port Volumes. It is expected to open in October 2023 with the cyclone resulting in over NZ $50 million damage to the mill. (Photo Credit: Pan Pac Facebook, Dated February 16 2023).
Surveying the damage to the Pan Pac Whirinaki sawmill in the immediate aftermath of Cyclone Gabrielle. The mill, which generated more than 6% of the region’s GDP, has been responsible for a significant proportion of the Napier Port Volumes. (Photo Credit: Pan Pac Facebook, Dated February 16 2023).

At the same time, research commissioned by the NZ National Institute of Water and Atmospheric Research (NIWA) found that “lifting timber buildings by 2m would be more cost-effective than the building of new houses.”

When disaster strikes, insurance typically covers only the cost of rebuilding a home after a disaster, not the total house and land value.

After Cyclone Gabrielle, the Government offered to buy out properties at higher risk of repeated disaster and is currently drafting a law, which has bipartisan support, to govern managed retreat. 

In 2020, Belinda Storey spoke about an insurance retreat due to climate change. Footage courtesy of @teggtalk6536.

The rules have the support of both major parties and will set out when communities would decide to shift and what financial and other aid would be available to them.

The NZ Labour Party

Labour said it supported a managed retreat act. However, when asked by Stuff NZ, it did not answer any subsequent questions on who should pay and whether development in at-risk areas should be restricted – even when provided more chances to respond.

Instead, the party’s answer mentioned adaptation-related legislation and plans it had developed. When private insurers pulled out, the Labour Government had investigated whether to provide cover. But, the party did not answer the question about government-subsidised insurance.

The NZ National Party

The Nationals support the new bill but are pushing for Government, councils and homeowners to co-contribute the relocation costs. It wanted to find “the best and most cost-effective way to manage adaptation that fairly allocates costs between central government, councils, and property owners”.

National is promising its approach to cyclone and flood recovery would be “fairer and faster” than Labour’s, with plans to cut regulations and set up a specific ombudsman. Footage courtesy of @RNZVideo.

It also backed regulations to warn homebuyers about at-risk areas. Development should be restricted if a site is part of the Cyclone Gabrielle buy-out. Beyond the buy-out areas, however, the Nationals do not support new regulations to limit development in at-risk areas and have outright rejected the idea of government-subsidised insurance.

The Emissions Trading Scheme and Zero Carbon Act

In recent months, the NZ ETS has been the subject of discussion with the NZ Government, tweaking the ETS price settings and looking to establish a whole new ETS market for planting.

According to the NZ Climate Change Minister, the Government wants to incentivise forest establishment and plant 700,000 hectares of additional exotic and indigenous ‘forests’ right now.” However, the industry has claimed that uncertainty around the market’s future has reduced market incentives to plant.

Last month, the IMF warned that NZ will only meet its climate commitments if it accelerates carbon abatement through additional tree planting.

The IMF expects the country’s net emissions will peak next year with “a sharp decline from 2030 as recently planted forests matured and started to absorb more carbon from the atmosphere.”

NZ’s climate commitments are underpinned by the Zero Carbon Act, which sets targets and target pathways and constrains how these targets will be achieved. The ETS sits beneath this as a tool to support the achievement of the targets, consistent with the constraints imposed by the Act. 

The NZ Labour Party

The party pledged to limit exotic forestry credits. It will take the findings from the ETS Review, which closed for public comment last month, with changes to be implemented in early 2025.

The proposed amendments:

The Government released four ideas to reform the ETS. The four options include:

  1. Use existing levers to strengthen incentives for net emissions reductions, for example, reducing the number of NZUs sold through auction.
  2. Increase the demand for emissions units by allowing the Government and/or overseas buyers to purchase them.
  3. Strengthen the incentives for gross emission reductions by changing the incentives for removals.
  4. Create separate incentives for gross emission reductions and removals.

Wood Central understands that officials assessed the most significant change as the most likely to achieve what was wanted was establishing a whole new additional ETS market. There would be one scheme for emissions reductions and one for removing emissions from the atmosphere, like tree planting.

When it comes to the redesign of the permanent forest category, the Government is asking for consultation on the following:

  1. What forests should be allowed in the permanent forest category
  2. How transition forests should be managed to ensure a successful transition best
  3. What rules will best maximise the benefits of permanent forests in the category?
The NZ National Party

The party promised to limit forestry in the ETS – and prohibit foreign investment in farm-to-forestry conversion.

As part of its agricultural emission plan, the party’s agricultural spokesperson, Todd McClay, said National wanted to recognise on-farm sequestration and create an independent board to implement a pricing system for agricultural emissions by 2030, keeping the sector out of the ETS.

Footage courtesy of @StuffNewZealand
Could the Minor Parties do a deal with Labour or Nationals on ETS?

Te Pāti Māori supported limiting forestry units, though they didn’t give a preferred approach. They want a “just transition” strategy developed with the Māori forestry sector.

It comes as a group representing Māori forest owners said they could be billions of dollars out of pocket under the proposed ETS reforms.

Māori are major forest owners, but holdings are often on marginal land and can be challenging to make money from.

Māori are major plantation forest owners – owning about a third of plantation forestry, which will tip to over 40% as more Treaty of Waitangi settlements are completed – but holdings are often on marginal land, which can be challenging to make money from.

Some Māori see selling units on the ETS – carbon farming – as a significant opportunity.

Te Taumata chairperson Chris Insley represented a group of Māori foresters and said the reforms could be incredibly prejudicial to Māori, jeopardising vast amounts of possible ETS revenue.

“[It] will eliminate $10 billion development opportunity for Māori off marginal land,” Insley said.

“Who’s the loser in all this? It will be Māori.”

  • The NZ Election will be held on October 14, 2023. Subscribe to Wood Central for exclusive up-to-the-minute coverage of the NZ forest, forest products and carbon markets.


  • Jason Ross

    Jason Ross, publisher, is a 15-year professional in building and construction, connecting with more than 400 specifiers. A Gottstein Fellowship recipient, he is passionate about growing the market for wood-based information. Jason is Wood Central's in-house emcee and is available for corporate host and MC services.


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