New Zealand takes a stand against farm-to-forest conversions
For years, New Zealand's climate policies have relied heavily on forestry offsets to meet emissions reduction targets
AUCKLAND, June 18, 2025 –– On June 16, the New Zealand Government introduced groundbreaking legislation aimed at curbing large-scale farm-to-forestry conversions, a move that has sparked debate across the nation.
The Climate Change Response [Emissions Trading Scheme—Forestry Conversion] Amendment Bill seeks to restrict the wholesale conversion of high-to-medium versatility farmland into exotic forestry, a practice that has been fueled by the country’s Emissions Trading Scheme [NZ ETS]. This legislation marks a significant shift in New Zealand’s approach to balancing climate goals with agricultural sustainability.
For years, New Zealand’s climate policies have relied heavily on forestry offsets to meet emissions reduction targets. Between 2017 and 2022, over 175,000 hectares of pastoral farmland were converted into exotic forests, primarily radiata pine, as investors capitalised on high carbon prices in the NZ ETS.
While some of these forests were managed for harvest, others were planted solely for carbon credits, a practice known as “carbon farming.” This trend has raised concerns about the depopulation of rural communities, loss of employment opportunities, and increased vulnerability to environmental risks like flooding and wildfires.
The previous Labour-led Government championed rapid decarbonization under its “Emissions Reduction Plan,” which included agriculture in the ETS starting in 2025.
However, the 2023 general election brought a center-right coalition to power, led by the National Party, ACT, and New Zealand First. This new Government dissolved the industry partnership He Waka Eke Noa [HWEN] and removed agriculture from the ETS, a decision welcomed by farming groups but criticised by environmental advocates.
Agriculture Minister Todd McClay has been vocal about the need to protect productive farmland, maintain food security, and ensure that forestry expansion does not undermine rural livelihoods. The proposed bill aims to restrict speculative carbon farming by capping new NZ ETS registrations on medium versatility farmland and exempting land owned by Māori Iwi to uphold the Crown’s Treaty of Waitangi obligations.
The legislation also seeks to stabilise land prices and reduce pressure on the sheep and beef sectors, which have been hit hard by declining livestock numbers and farm closures.
While farming organisations have praised the bill, forestry groups and carbon market participants warn that it could slow afforestation rates and hinder New Zealand’s ability to meet its climate targets under the Paris Agreement. Managed production forestry, which already covers 1.7 million hectares, may see modest expansion under stricter land use guidance.
The bill is currently in its early stages, with the first reading scheduled for late June 2025. Public submissions will open until late July, and final passage is expected by the end of the year.
As the legislative process unfolds, the Ministry for Primary Industries [MPI] and the Ministry for the Environment [MfE] will provide guidance on implementation.
This legislation reflects a global trend of re-evaluating the role of forestry offsets in national climate plans, particularly when agricultural trade and rural stability are at stake. New Zealand’s bold move to prioritise farmland protection over carbon farming could set a precedent for other nations grappling with similar challenges.
https://thecooperator.news/new-zealand-the-co-operative-bank-shares-us-2-5mln-profit-with-customers/
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