Hon Todd McClay
Minister of Agriculture
Minister of Forestry
Hon Simon Watts
Minister of Climate Change

Agriculture and Forestry Minister Todd McClay and Climate Change Minister Simon Watts have today announced clear rules to limit farm to forestry conversions entering the Emissions Trading Scheme (ETS).

“These changes deliver on a key election commitment to protect food production for farmers while providing ETS certainty for foresters,” Mr McClay says.

“They also address the previous Government’s failed ETS policies that incentivised large-scale conversions, created ETS complexity, and undermined our world-best primary producers.”

The farm to forestry changes include:

• A moratorium on exotic forestry registrations for Land Use Classification (LUC) 1-5 actively farmed land.
• An annual registration cap of 15,000 hectares for exotic forestry registrations on LUC 6 farmland.
• Allowing up to 25% of a farm’s LUC 1-6 land to be planted in forestry for the ETS, ensuring farmers retain flexibility and choice.
• The ability for landowners to have their LUC categorisation reassessed at the property level.
• Excluding specific categories of Māori-owned land from the restrictions, in line with Treaty obligations, while ensuring pathways for economic development.
• Transitional measures for landowners currently in the process of afforestation who can demonstrate an intent to afforest prior to 4 December 2024.

“These measures help to protect our most productive farmland while allowing room for sustainable forestry growth. Landowners will retain the ability to make smart land use decisions, enhancing both profitability and environmental outcomes," Mr McClay says.

Climate Change Minister, Simon Watts says these changes provide much-needed certainty for participants in the ETS, ensuring that foresters, farmers, and investors can plan ahead with confidence.

“These reforms ensure a credible ETS whilst protecting rural livelihoods.”

“Forestry and agriculture both play an important part in our climate strategy. It’s important we are incentivising the right balance so New Zealand can have prosperous communities, increasing primary production and exports, and a thriving economy while meeting our climate goals,” Mr Watts says.

“The Government is also progressing policy to partner with the private sector to plant trees on Crown land with low environmental and farming value. Together these policies will strike the right balance of afforestation, maintaining farmer flexibility, and creating more productive value from Crown assets,” Mr McClay says.

Legislation will be introduced in 2025 and is intended to enter into force from October 2025.

Notes

In November 2024, Cabinet agreed to the following policy changes to limit the conversion of farmland into forestry registered in the ETS:

• a moratorium on exotic forestry registrations on Land Use Capability (LUC) class 1-5 farmland
• an annual hectare limit of 15,000 hectares for exotic forestry registrations on LUC class 6 farmland
• allocating rights to register exotic forests in the ETS on LUC class 6 farmland via a first-in, first-served allocation system
• an exemption from the above limits on up to 25% of LUC class 1-6 land on a farm
• those wanting to register forest land into the ETS will be able to use a default, national scale, LUC map. To provide flexibility, and recognise the coarse scale of national level mapping, there will be an option to undertake property scale reassessment of LUC and use this.
• exemptions from the above limits for some types of Māori land, specifically Māori land held under Te Ture Whenua Māori Act 1993, land on which the status was changed to general land under the Māori Affairs Amendment Act 1967, and land returned pursuant to a Treaty settlement
• transitional measures for landowners currently in the process of afforestation who can demonstrate an intent to afforest prior to 4 December 2024.
• no effect on other classes of farmland already registered in the ETS.

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