CARBON FORESTRY

Mixed vegetation of conifers, weeds and native shrub adjacent to carbon forest on old goldmine workings.

Forestry writer, Jim Childerstone, attempts to get some perspective on carbon forestry after reviewing an array of responses from stakeholders and independent organisations concerned with permanent forestry. Input from a wide spectrum of stakeholders in these articles indicates conflicting interests around permanent carbon forests, coupled with lack of clarity and considerable misunderstanding among media and the general public. The emphasis, mainly from the agricultural sector, is to implement a national strategic plan to sort out different aspects of carbon farming. However the forestry sector warns of unintended consequences if draconian regulations come into force.

FOR A START THE MAINSTREAM MEDIA

needs to define the difference between Permanent Carbon Farming and Commercial Productive Forestry. This is vitally important as it affects the forest industries as a whole as well as this country's attempt to mitigate climate change.

There is a major difference. Farm woodlot owners, private and corporate forest owners all have the opportunity to register for carbon sequestration under the New Zealand Emission's Trading Scheme. And most do, and therefore are also carbon farmers. Government, regional and local authorities need to note this difference before planning land use regulations under the National Environmental Standards for Plantation Forestry (NES-PF).

It also appears that purchasers of land for carbon farming have deep pockets. Very deep pockets. This tempts livestock farmers on less productive and marginal lands to sell up, as prices being offered tend to be well over the productive capacity of the land and New Zealand Quotable Value. It goes without saying that income from carbon forests is well above many Beef + Lamb earnings per hectare on some land classes, particularly as carbon prices escalate.

Attempting to get transparency on who the big time investors are is met with obfuscation. One obvious question being posed is: Are they large multinational fossil fuel extracting entities?

Firms such as New Zealand Carbon Farming, Interpine Innovations and My Farm Investments are New Zealand listed companies, therefore not required to apply to the Overseas Investment Office (OIO) for fee simple land sales. We can be certain funding sought for My Farm land purchase is a local identity as it's targeting Mum and Dad investors through local media ads. That is, if you had a spare $50k to invest!

Attempting to throw some light on the

subject NZ Logger approached Stuart Nash, Forestry Minister, backed by Damien O'Connor, Agriculture Minister.

The mantra remains “the right tree in the right place for the right reasons”. Responding to some of the controversy as to what, where and when this takes place, Minister Nash indicates "some changes are underway" to tinker with the Climate Change Commission Zero Carbon Act. Mr O'Connor opined in a recent article to the local media (Otago Daily Times) that "tweaks” were being considered to alter the national policy statement.

Mr Nash reiterates that it is not the role of Government to tell farmers who they can or cannot sell their farms to, "especially if the prospective purchaser is a New Zealander". This presumes he (with other commentators) realises offers are being made by off-shore investors. (Southern Wood Council's Grant Dobson is adamant that no sales have been made through the OIO.)

There is agreement by farmers that Government has a role in curbing the rising number of farms sold to carbon farmers. This is currently being worked on by related state sectors "as top priority," but could be running out of time.

The Ministers listed four steps towards this: • Review the process that overseas investors undertake in purchasing farms to convert to forestry (recently adjusted). • Also changes to the National Environmental

Standards (NES) on plantation forestry to give local authorities the right to plan where trees can or cannot be planted. • Where only native trees are allowed as permanent forests to be tested. • And looking at improved sequestration rates with native vegetation varieties. (See article on Transition from exotic to native on page 35.)

According to the NZ Forest Service some 1.2m ha has been identified as uneconomic for farming or plantation forestry in NZ, plus another 1.2m ha of marginal land more suitable for mixed species plantation forestry.

And herein lies the big question: Who, or what entity, is going to decide what the right tree is, where the right place is and what are to be the right reasons? Certainly not Government, or its departments, regional or local authorities, some private landowners believe.

Forestry consultant Mark Belton, Managing Director of Permanent Forestry NZ, begs to differ: "Forestry land use, both for timber and carbon could be appropriately regulated through the Resource Management Act (RMA) and existing Land Resource Inventory (LRI) and Land Use Capability (LUC) mapping and land types, and their suitability for different land uses. "The science-based land use capability mapping work is readily available. It just needs to be intelligently applied. For example Class 8 land may have extreme limitations for productive agricultural land use. However it could be suited for productive carbon and conservation forestry, with either introduced or indigenous tree species". Due to its extreme limitations, obtaining a land use consent would be required, Mr Belton explains. "Even more constraint is called for on highly valuable agricultural land types, especially Class 1-3 lands," he says, backing Beef + Lamb NZ suggestions.

A well-tended private woodlot in North Otago, CO� registered for sequestration. FML's Stu Brown discusses options for harvest.

"As carbon prices track upwards, so will land prices," Mr Belton believes. "The only way to put the brakes on land price escalation would be for Government to put a cap on price of carbon from forests."

He asks: “How many politicians and eco romantics know that in addition to supplying timber in quantity, plantations are super rich in bird life, are extremely effective in soil erosion protection (except , for example following clearfell harvesting), and soil fertility improving through symbioses with ectomycorrhizal fungi that solubise otherwise intractable soil phosphorus.” (This would apply equally to continuous cover select stem harvest managed plantations.)

He goes on: "And radiata, being so productive, can sequester carbon super-fast in the near term when it most matters and at a very low cost, about $25 for each tonne of CO2 extracted from the air and held in the forests’ biomass. (Fast growing eucalypts are the only species that can out-perform radiata.) By comparison, planting native forests to sequester carbon makes no economic sense, the cost of each tonne of C02 extracted could be $500/t CO2, require 10 (times) the land area, and take many centuries to do the same carbon removal job. Is effective climate change action needed or not?”

To summarise choosing what to plant, where and why, obviously has to be advised by researchers within Crown Research Agencies, sectors involved with climatology, botany, forestry scientists, and soil and water engineers familiar with catchment land stabilisation and erosion. Also multigenerational farmers who have in-depth knowledge of the land they own.

Modification of New Zealand's landscape has been ongoing for over 700 years, with vast areas of introduced exotic plants, animals, insects and micro-organisms. This has more recently been exacerbated by climate change. Average rainfall varies from 600 cm/year to 30 cm and topography from sea level to over 3000 m, and now subject to more recent changes. This requires continuous research and alterations to land use.

Perhaps a major “tweak” could be a significant query as to why the Government is prepared to spend well over $2b purchasing overseas CO2 credits to mitigate climate change in New Zealand. First priority should go to local sequestered carbon. Also alterations to the Zero Carbon Act under the ETS so that CO2 emissions are drastically cut while incentives continue to bolster alternative low emission energy sources.

Currently this just retains the status quo, hardly reducing the overall CO2 tonnage to meet COP 26 requirements to cut greenhouse gas (GHG) emissions to limit temperature increase to 1.5 degrees Celsius by 2050 and beyond. It seems our emissions are far greater than the carbon being sequestered by our trees. According to the Climate Change Commission, at least a further 380,000ha of pine needs to be planted by 2030! Or so it would appear. Another option, suggested by Mark Belton, is to plant fast-growing tree species (not just pine) on 1 million ha of unproductive and environmentally problematic marginal land - thereby removing the entirety of our Ag Sectors GHG emissions for the next 50 years, and enabling farmer landowners to capture exceptional economic returns while delivering exceptional environmental benefits, which should include some increased establishment of native forest habitat.

Hopefully this will generate some balance for an informed debate to clarify each sector's problems. Thus, let the discussions begin...

Concerns aired

BEEF + LAMB NEW ZEALAND

Chairman, Andrew Morrison, has a number of worries: "Our concern is carbon farming. The Government is economically incentivising wholesale land use change from pastoral-based farming into exotic trees – because the increasing price of carbon credits is distorting what land is worth and productive farmland is being sold for the future planting of trees - mainly exotic species such as p radiata "The big problem is that the Government has not set any limits on how much offsetting of emissions can happen through the ETS to meet our climate change targets, and therefore how much land can be converted to forestry to create carbon credits for sale. "This means fossil fuel polluters can keep avoiding the need to actually cut back on fossil fuel use and instead offset their pollution by using carbon credits generated on our farms through the wholesale planting of pine trees, most likely never to be harvested."

Morrison believes this scenario is a shortterm fix for a long-term problem which "is something we and forest owners agree on". He says 100% carbon offsetting should not be allowed. New Zealand is the only country allowing this through forestry, as far as Morrison is aware.

Regenerated beech floor.

CARBON FORESTERS PROMOTE INTENTIONS

A SPOKESPERSON FOR NZ CARBON FARMING (NZCF), IN A

statement, says the organisation is a wholly locally-owned company which only selects lower productivity land for planting – “over 95% of its nationwide conservation estate made of Grade 6 and above land." (They are able to pay over the top prices for these classes of land say Beef + Lamb farmers.)

The company states permanent forestry can be a great opportunity for owners of unproductive farmland, both as a source of complementary income and vital support for New Zealand’s fight against climate change. The company claims it has returned more than $95m to the sector (presumedly through carbon credits?).

The statement continues: "But while permanent exotic forests can be an excellent option for landowners, NZCF does not support 'plant and leave' carbon farming. This type of unmanaged forestry creates poor outcomes for communities and for the environment.”

The company claims its method of using exotic plantings to act as a nurse crop for the ultimate establishment of native environments – reinforced by more than 40 years of local scientific research and supported by ongoing independent analysis – “requires regular and ongoing management over the long term”.

Attempting to throw some light on management queries, such as pest control, the company says it currently invests more than $1m p/a on pest control, which it believes to be "the largest private programme in the country".

Management systems with carbon farming virtually eliminate activities such as pruning and thinning regimes, and “nil harvest at maturity suggests these forests also provide a range of other complementary income sources for the sector. Continuous canopy harvest of carefully selected trees on a sustainable basis is a strong emerging market." (Continuous cover forestry with select stem logging has been ongoing with some growers who carry out normal management systems.) "A range of other industries, from honey production to ecotourism and biofuels have strong potential to support the development of sustainable regional industries. The growth of these businesses offers even greater opportunities for diversification of local farm incomes", the company concludes (in-forest management systems - not specified).

Too good to be true?

MANY LIVESTOCK FARMERS THROUGHOUT THE NATION

question the intention of permanent carbon forest owners to carry out the plans being promoted - in the long term. In the North Otago downlands near Tokarahi some 3300ha of land has been bought and planted in radiata by NZ Carbon Farming (NZCF), resulting in negative reactions from local livestock farmers.

Local Tokarahi farmer, Murray Simpson, also a farm forester, is extremely sceptical whether much of the company proposals will be carried out on its permanent forestry management agenda. "It looks too good to be true. I don't believe a word of it," he says, referring to the promotional material.

On a drive around the two sold properties with Murray he points out discrepancies in the Fairview block, bought in 2012 and Hazeldene, bought last year. Certainly there is little evidence of appropriate management regarding distance off roadsides, or fire breaks. Density of planting is at least 1000 sph, including plots deep into damp gullies which should normally be left for regeneration of native vegetation. The only pest control is deer shooting after plantings to prevent seedling damage, says Mr Simpson. No sign of the 10-yearold trees being thinned or pruned. No sign of ponding for fire control or tracking for vehicle access.

In 2020 a forest fire ripped through about 600 ha of the 1250 ha plantation, narrowly missing the Simpson homestead adjacent to the plots, which Mr Simpson was in the process of selling. Some 2000 ha of Hazeldene has been planted in grids of about 1000 sph as sighted from Balmoral Road. Much of this is flat to rolling territory up to about 1000 m asl, which Murray describes as reasonable pasture land for grazing and haymaking. He also notes that if a limited harvest (select stem felling under a continuous cover system) is being contemplated, it should require pruning and thinning to produce good quality stems.

Mr Simpson, 67, a fourth generation farmer in this part of North Otago, also a woodlot owner, explains it is a dry inland area with light pebbly soils, mainly tussock land with areas of woody shrubs. But exotic weeds, such as broom and gorse, as well as rampant growth of exotic grasses are a threat as fire danger. The 2020 fire was thought to have started through crossed power lines during a nor'wester.

Although he has retained some 170 ha from the sale of the homestead block, he says the two forested properties were sold through local Oamaru rural farm trading companies, Combined Rural Traders and PGG Wrightson.

It appears the buyer, NZCF has surprisingly deep pockets as they were able to offer prices well over current valuations of beef and lamb properties, as well as covering the costs of land prep and planting. Hazeldene's near 3000 ha of bare land sold for $7m according to a PGG sales spokesman, which did not require OIO consent.

Mr Simpson believes investment funding could be sourced from overseas investors and large GHG emitters aiming to mitigate carbon payments by investing in growing trees. A recent TV1 Sunday programme, which featured his thoughts on carbon farming, was unable to get clarity on the sale.

An approach by NZ Logger to Oamaru solicitors, Dean & Coleman Law, who handled the legal side of the sale of Fairview, seeking transparency, was met with the response that sales are private and confidential, thus they were unable to comment.

Murray Simpson.

WAITAKI DISTRICT COUNCIL WANTS REGULATIONS

MAYOR GARY KIRCHER OF THE WAITAKi District Council (WDC) was partly influenced by a visit to Te Kuiti chatting to locals on farms being taken over for permanent carbon farming. Also the purchase of a North Otago property for conversion into a carbon forest in the Downlands foothill country. "Following the Livingstone fire in October 2020 it became clear just how poorly many carbon forests were managed," he says.

Mr Kircher cites insufficient control of pest plants and pest animals; minimal fence maintenance, and little attention given to requirements such as setbacks from boundaries, firebreaks and tree maintenance. "We are considering special rates for properties used predominantly for carbon." This would be a rate that would be collected for social benefit and provide a fund to help neighbours with pest control and some of the other issues (he does not specify permanent or commercial forests). "If possible some form of (government) charter would be very helpful in the industry - basically an accreditation for those forests being managed responsibly," Mr Kircher points out. "Such an accreditation might allow a decrease in the rates charged, and an ability for those investors to be acknowledged internationally."

He also cites the issues of declining rural communities affecting economies through loss of productivity, also attributing taking advantage of emission reducing options to adding to the divide between rural and urban communities.

Unintended consequences, WARNS FARM FORESTRY ASSOCIATION

THE NEW ZEALAND FARM FORESTRY

Association (NZFFA) differs somewhat on Beef + Lamb's concerns.

Graham West, NZFFA president warns of the unforeseen consequences if Government or local authorities implement harsh regulations relating to land use to appease opposition to forestry establishment. "If we don't like the carbon forest solution we need to suggest an alternative. Land use change, carbon forests and the ETS carbon price are all driven by the one issue - risk of climate change," he points out. Which brings it all down to the nitty gritty and basic economics. "Fix that," he says, "and everything related goes away. Climate change is likely to devastate pastoral farming, forestry and horticulture equally. The New Zealand economy cannot afford a drastic change in climate. So we need to address it and not bicker about right land use. "Fortunately, introduced exotic timber tree species grow about five times faster than indigenous forest species, and at maturity hold at least three times more carbon as permanent sinks – which is the objective."

Mr West points out that exotic plantations will grow on almost any soil type and do not slow down after 30 years. "Radiata doesn’t slow until 70 years, Douglas-fir about 120 years and Redwoods about 200 years."

He adds that radiata doesn’t collapse if not harvested, but it will slowly reduce in stocking from natural competition according to data on this.

The Association promotes the farm forestry model to land owners, where pastoral farming diversifies its land use to produce timber, and GHG emissions are addressed through permanent land use change, Mr West concludes.

Understory growth in well-spaced Douglas fir plantation, Herbert Forest 1998.

TRANSITION FROM EXOTIC TO NATIVE – MORE RESEARCH NEEDED

UNIVERSITY OF CANTERBURY SCHOOL

of Forestry Professor David Norton, in support of Scion Research's submission to MPI, says establishing native trees among permanent exotic forests, primarily p-radiata, is a relatively new topic.

So far "there has been a lack of research to determine actual time frames to transition exotic permanent (nonharvest) plantations to native forests", Prof Norton explained in a comprehensive detailed email to NZ Logger, adding there was insufficient time to fully research the data to give a fully informed conclusion covering the whole country. A report, commissioned for the Ministry for Primary Industries, says work and funding is needed, such as guidance on canopy interventions to aid transition, methods of gap creations, staging, maintenance across rainfall and temperature gradients, seed source proximity, pest management and fencing. In another report ex Canterbery University School of Forestry scientist, Dr Adam Forbes, adding to the Scion submission, has been researching self-sustaining permanent forest site suitability, nurse crop concepts and understory regeneration with transition to self-sustaining forest.

He writes factors being studied include stand age, canopy cover, understory structure, seed source proximity (distance or amount), climate, herbivore species (pests) and numbers. Research also includes evidence-based policy for permanent forests using data research into soils, biodiversity and/or CO2 applications.

The conclusions so far from existing research are that “transition would be most appropriate in areas of high rainfall with a good amount of native seed source, healthy native bird populations, low numbers of grazing animals and manageable pest issues." Research is proving long term – very long term.

Native shrubs prosper under a stand in Dunedin City Forests.

Keep choice open, says NZ forest owners Association

NON-PRODUCTION PERMANENT FORESTRY

can be a valuableland use option providing it can be managed appropriately, subject to land use rules like those applying to other forestry, and over the long term based on species that are suited to permanent cover," says the NZ Forest Owners Association (NZFOA) policy statement. "The imposition of land use controls that constrain landowners’ choices and impede their potential returns where there are already sufficient controls protecting the environment is opposed" by the NZ FOA. This is a crucial issue being pursued by local authorities to regulate land use under the RMA National Environmental Standards for Plantation Forestry (NES-PF).

The FOA accepts the need to use forests as long term carbon sinks to mitigate climate change to enable the transition away from a fossil fuel-based economy. "We note concerns by some sectors of the community over which species these forests should be, where they should be planted and how they should be managed. There are particular concerns for "carbon farming" and the establishment of permanent carbon forests".

The FOA suggests the terminology needs defining, particularly as all forests sequester whether in the ETS or not. Fire breaks and water sources are a necessity with permanent forest – Murray Simpson looks over the results of the Fairview fire of 2o2o.

The FOA wants forests that have been deliberately planted for carbon with nil harvest to be referred to as "carbon-only forests".

This distinguishes them from those forests that have been developed for both carbon and fibre production. "All can, of course, have a range of other values for which they are often established for biodiversity, erosion control and recreation."

The FOA does not support carbon-only forests being established and managed in a way that significantly increases risk to other forests and surrounding properties: "A carbon-only forest will typically not have the same level of management or roading, fire breaks and ponds as production forests, and consequently it poses an increased threat in terms of biosecurity, pests and fire."

It also observes that nil harvest affects wood production which would work against the development of the forestry and domestic wood processing sector with a negative effect on GDP and employment.

Native shrubs prosper in Dunedin City Forests.

As carbon prices are predicted to skyrocket, the FOA wants to prevent forest owners delaying harvest to cash in on carbon credits. Thus two accounting approaches have been introduced, the Stock Change approach and Averaging.

Referring to carbon accounting, FOA President, Phil Taylor, explains that Averaging will become compulsory next year and Stock Change will disappear. "Although at this stage the existing registered stands will be able to continue using Stock Change. "With Stock Change your carbon stock increases annually until you clear fell, and then you have to repay it back on harvest. With Averaging, you can earn and sell up on carbon stock (age 16 years for p radiata) - provided you replant on harvest you do not have to pay it back."

Putting the case for Southern Wood Products, Grant Dobson, Dunedin City Forests CEO, says it is “very important to stress” that carbon forests are very different from commercial forestry intended for productive harvest. “The NZ ETS is not linked to any international schemes, that is any carbon credits earned in NZ forestry investment can only be sold to NZ emitters within the NZ ETS.” (So how do overseas investors using local based companies benefit?)

Mr Dobson observes that many organisations have reservations about using short-lived exotic tree species including p radiata for permanent carbon forests. “Any permanent forests need to be on appropriate land and in long-lived species such as natives.”

The country needs to expand the commercial forestry estate, forest industry and wood processing sector, Mr Dobson emphasises. "There is a real risk that any controls put on carbon forestry (can) spill over into commercial forestry ," he warns. NZL

Carbon farming permanent forest, Tokorahi.

EXCLUSIVE EXCLUSIVE NEW ZEALAND NEW ZEALAND DISTRIBUTOR OF DISTRIBUTOR GB FORESTRY PRODUCTS GB FORESTRY PRODUCTS

EXCLUSIVE NEW ZEALAND DISTRIBUTOR OF GB FORESTRY PRODUCTS

EXCLUSIVE NEW ZEALAND DISTRIBUTOR OF GB FORESTRY EQUIPMENT

EXCLUSIVE NEW ZEALAND DISTRIBUTOR GB FORESTRY PRODUCTS

" "

PITCHGAUGE

3/4

PITCHGAUGE

EXCLUSIVE NEW ZEALAND DISTRIBUTOR OF GB FORESTRY PRODUCTS