Carbon trading helps profit and planet

City Forests chief executive officer Grant Dodson in front of a year-old radiata pine plantation near Takitoa. Photo: Brent Melville
City Forests chief executive officer Grant Dodson in front of a year-old radiata pine plantation near Takitoa. Photo: Brent Melville
City Forests believes the best way to fight climate change is to plant trees and is leading by example.

Last year the Dunedin city-owned forestry group expanded its forestry footprint by 1000ha to more than 18,100ha of productive forests, across localised land holdings of more than 22,500ha.

It also harvested more than 336,000cu m of logs, around 5ha a day.

The majority of those radiata pine were exported to the South Korean and Chinese markets or went into the domestic market.

The group’s growth aspirations are being funded largely by carbon revenues (NZUs), as part of the emissions trading scheme (ETS).

Its latest acquisition is 450ha of farmland next to its 351ha Takitoa forest holdings near Henley, which includes a 350ha tranche purchased from sheep and beef farmer Nigel Hillis.

The purchase of an additional 100ha parcel is also being finalised.

City Forests chief executive officer Grant Dodson said the acquisitions would effectively double the current forested block, which incorporated a wetland developed in concert with Fish and Game Otago over the past decade.

‘‘We’ve established roading, taken the fencing out, put a rip line through paddocks and are planting the best quality, fast growth radiata cuttings.’’

Mr Dodson said the company’s strategy would be to continue to expand its forestry estates, increase its sustainable cut levels and increase its carbon credit stream.

With an estimated 1.8 million tonnes of carbon stored in its forests, City Forests is part of the New Zealand emissions trading scheme.

Its forests established after 1989 qualify for carbon credits, which have been able to be traded within New Zealand from 2008.

Since that date the company has banked 2.5 million NZUs, generating around $30 million used primarily for debt reduction, land acquisition and to help pay dividends to Dunedin City Holdings.

Last year it sold 300,000 NZUs, at around $25 per unit, while earning a total of 183,000 NZUs.

The company’s NZU balance is 1.16 million at present, with a current book value of $26.9million.

Because City Forests was a mixed age estate, its carbon assets represented an important part of its product mix, Mr Dodson said.

‘‘Our primary focus, however, is about ensuring a sustainable cut level, improved productivity and high quality logs.

‘‘Like the property, forestry is about location, location and location.

‘‘In this case about being in a low lying, good terrain with good access to a port. That may not apply as much to someone who is planting a forest strictly for the carbon benefits and has no intention of harvesting.

‘‘But we are about both the wood and the carbon credits, so we are very aware of what we plant and where we plant.’’

brent.melville@odt.co.nz

Comments

"Carbon trading helps profit"
That's about all it does.

‘‘We’ve established roading, taken the fencing out, put a rip line through paddocks and are planting the best quality, fast growth radiata cuttings.’’

You forgot to mention spraying weedkiller from helicopter onto neighbouring properties (wind drift), killing native plants & vegetable gardens and contaminating rainwater collection supplies. But hey, you just gotta get those trees in.....

 

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