Carbon credits sold to Europe

A Southland forestry company has secured its private investors a multimillion-dollar sale of carbon credits, after it recently closed a deal with an unspecified European government.

It is the third southern-based carbon-credit deal secured during the past 10-months.

Winton-based Independent Forestry Services (IFS) carbon services manager Mike Mitchell said the multimillion-dollar sale of carbon credits was a "first-of-its-kind" for a small privately owned company in the Otago-Southland forestry sector.

Pioneering carbon credit sales by large-scale corporate owners Ernslaw One and the Dunedin City Council's forestry investments arm, Dunedin City Forest Holdings, of respectively more than $10 million and $3 million, had been "well-publicised" last year when the companies were among the first to profit from the emissions trading scheme.

While Mr Mitchell declined to specify the sale price or name the government involved in the deal, the trade was good news for the ETS given some of the negative publicity it has recently attracted.

Under the New Zealand Government's ETS, carbon credits were given to forest owners because of the carbon trees can absorb.

Allocated credits can be sold on by forest owners to industry sectors which have large carbon emissions or governments which want to balance their country's emissions, Mr Mitchell said.

Credits were selling for between $16 and $20 a tonne of carbon dioxide, and the recent sale represented a significant windfall for the "handful" of forest owners involved in last week's deal, he said.

The trade by IFS on behalf of its private forest owners would result in profits derived from the ETS being reinvested in New Zealand's forestry sector, he said.