The New Zealand Government is looking to further slash Emissions Trading Scheme (ETS) costs, proposing reforms that would cut ETS costs by 66% since the Luxon Government took office in October 2023. Wood Central said the latest proposal would see the annual ETS Registry fees for post‑1989 forest land cut from NZ $14.90 to $10.25 per hectare, marking the second major adjustment in just over a year.
According to Todd McClay, NZ’s Forestry Minister, the move would deliver relief to forest owners and restore confidence in the ETS. “The last Labour Government wanted forest owners to pay an excessive $30.25 per hectare per year, forcing the sector to take legal action. We’re lowering that, for a second time, to $10.25,” McClay said. “All forest owners will benefit from these revised settings.”
McClay said the reforms were designed to “ensure cost recovery reflects the true costs of administering forestry in the ETS while upholding high service standards.” Wood Central understands that the proposal – now open for public consultation – follows a second independent review of ETS operational costs, and comes after the first, in 2024, saw the government cut the ETS to $14.90 per hectare.
Key changes under consultation include:
- Lowering the annual charge for post‑1989 forest land to $10.25 per hectare
- Updating service fees, including a reduced hourly rate and revised time estimates
- Introducing eight new targeted service fees for activities that provide specific private benefits to participants
The government is also seeking feedback on an alternative reduced annual charge for forests that no longer need to report carbon stock changes—an option that would apply for a limited period.
Respite comes as confidence in carbon forestry remains fragile.
According to new market analysis, published in QCIntel, carbon‑forestry applications fell 14% last year, reflecting ongoing uncertainty around ETS settings, carbon price trajectories, and long‑term investment signals. The government hopes the revised cost structure, which could take effect mid-year, will help stabilise participation and support the sector’s contribution to New Zealand’s export economy and emissions‑reduction targets.
