Douglas fir, such as these owned by City Forests near Three
Mile Hill Rd, in Dunedin, yesterday, have double the carbon
credit value of radiata pine. Photo by Linda Robertson.
Southern forester Ernslaw One has sold more than $10
million worth of carbon credits to the Norwegian Government -
believed to be the first international carbon credit sale by a
New Zealand company.
A company spokesman said the credits were sold overseas out
of "frustration because of the political interference here"
over the Emissions Trading Scheme.
Industry sources understand the 520,000 Ernslaw credits were
sold for $21 to $22 a tonne, earning between $10.9 million
and $11.4 million, depending on the exchange rate.
This makes it the world's largest forest-sink sale to date.
Ernslaw recently sold about $1 million worth, or 50,000
credits at $20 each, domestically.
The international deal is being hailed as the start of a
possible major export earner with "enormous potential" for
Otago and Southland.
The Ernslaw sale also brought into sharp focus uncertainly
over the future of the Emissions Trading Scheme (ETS), which
has been put on hold by the Government and is under review.
Privately-owned by a Malaysian family, Tapanui-based Ernslaw
One has almost 28,000ha of forests - 11,000ha of Douglas fir
in Otago and Southland and almost 17,000ha of radiata pine in
the North Island. The potential for millions of dollars in
revenue for the South lies in the Douglas fir, which can
absorb twice as much carbon as radiata pine.
The carbon credits could be sold internationally during the
Ernslaw One chief executive Phil De La Mere said the sale was
"very good news" at a time when the forest industry was
shrinking and hundreds of jobs had been lost.
He declined to confirm the per-tonne price paid for the
carbon credits but said it was "significant" for Ernslaw.
Mr De La Mere said that with the ETS under review, there was
no need for domestic carbon emitters to buy credits until
they knew the conditions attached.
"We sold the credits overseas out of frustration because of
the political interference here," he said, citing Labour's
implementation of the ETS and the National Government's
desire to implement changes.
Ernslaw environment manager Peter Weir, who is also chairman
of the New Zealand Forest Owners Association. said the ETS
select committee had recommended New Zealand's ETS be linked
to international trading rather than a carbon tax as the
primary economic way of managing climate change.
"Policy and political uncertainty" had actively discouraged
new forest plantings during recent years, he said.
"The Government needs multiple party support to confirm
legislation that provides for stable long-term policy to
incentivise new planting."
Southern Wood Council chairman and the chief executive of
Dunedin City Council-owned City Forests, Grant Dodson, said
any government modifications to the ETS legislation from the
review had to take the needs of New Zealand forestry into
"Landowners can then maximise the opportunities that now
exist for international carbon trading."
The Wood Council believed the carbon unit sale by Ernslaw
demonstrated significant interest internationally in New
Zealand's forestry carbon units, and highlighted the
potential value of Otago and Southland plantation forests for
Emissions Trading Scheme
> Limits on greenhouse gas emissions, with those exceeding
their limits having to buy carbon credits from those with
credits to spare.
> The tradeable domestic New Zealand unit equates to 1
tonne of carbon dioxide.
> These can be converted into assigned amount units for
> AAUs are sold by brokers to (non-European) overseas
companies, or Kyoto-signed-up governments, which hold AAU
> Malaysian-owned Ernslaw One is one of New Zealand's
largest private owners of Kyoto-compliant forests.
> The Southern Wood Council represents Otago and Southland
forest owners with an annual harvest of 1.2 million cu m of
wood and 140,000ha of forests.