Our German Desk
The challenging economic environment for New Zealand’s forestry industry continues, with China’s demand for our logs remaining subdued.
Moreover, in addition to the change in Government, there have been a number of regulatory changes affecting the industry over the past year. Our Forestry Team recap three recent key changes.
- Plantation Forestry Standards Update
(in force 3 November 2023)
Perhaps the most significant reform was the introduction of the National Environmental Standards for Commercial Forestry (NES-CF), which replaces the previous National Environmental Standards for Plantation Forestry (NES-PF). This is the country’s primary tool for managing the environmental effects of plantation forestry.
The key changes include:
- The inclusion into the standards of exotic continuous cover forests (carbon forests) in addition to exotic and indigenous planation forests.
- Increased powers for local governments.
- Major changes to slash management.
- Requirement for foresters to have management plans.
Under NES-CF, councils now have more power to determine where forests are located when granting afforestation consents. The new regulations give councils the ability to consider erosion risk, slash risk, the effect on ecosystems and freshwater, and other social and economic effects before granting consent. This is intended to address concerns around the conversion of farmland into forestry and the associated effects on the environment.
Carbon forests are now in! This means forests planted for the sole purpose of earning carbon credits are now within the ambit of the rules applying to normal plantation forests. Carbon forests will now face the same requirements around management and consent, including for sub-activities like stream crossings, sediment loss, and access track drainage.
Management plans are now required for all afforestation activities.
An increased focus on slash management at harvest means that when operating in areas with a high risk of erosion (designated as red or orange zones), solid wood slash that is longer than 2 metres (i.e., slash over 2 metres that can be moved without breaking or degrading) must be removed if it is safe to do so.
- The Crackdown on Illegally Harvested Timber
(in force May 2026)
The Forests (Legal Harvest Assurance) Amendment Act 2023 (Act) was enacted on 19 May 2023 and aims to strengthen the crackdown on illegally harvested timber products in the industry. Forest owners, primary processors, log traders, and timber exporters will need to provide assurance that their timber has been legally harvested or sourced from legally harvested timber.
The Act will introduce a government assurance framework to ensure that all the timber products traded from New Zealand are harvested legally and that illegally harvested timber products are prevented from making it to New Zealand shores. This keeps New Zealand in line with steps we are seeing globally from the likes of Australia, the United States, and the European Union.
The Act will commence in 2026, and a further 12 months will be allowed for compliance.
- Cyclone and Flooding Extensions are Available for ETS Replanting Timelines
(in force September 2023)
Following cyclones Hale and Gabrielle in 2023, many New Zealand forests were at risk of being considered ‘deforested’ by the Emissions Trading Scheme, resulting in a technical liability to surrender units.
In September 2023, by an Order in Council under the Severe Weather Emergency Recovery Legislation Act 2023, forest owners were granted a replanting extension. This allowed for more time to replant forest on land affected by certain weather events of 2023. This means that the land will not be considered deforested if re-establishment has been delayed by the weather. Forest owners affected by these weather events may apply for a 3-year extension on their 4-year and 10-year re-establishment tests, i.e., extend the 4-year re-establishment criteria to the 7th year, and the 10-year re-establishment criteria to the 13th year.
The 3-year extension also applies to forests established to offset carbon in pre-1990 forest land and the particular ‘offset date’ accompanying that.
Forest owners wanting to apply for the extension should submit a statutory declaration either:
- Before the new extended date for re-establishing the forest (i.e., the relevant test plus 3 years) or before/on the day they submit their emissions return, or
- Before the new offset date or before or on the day they submit their P90 release criteria notice.
If you have any questions about the changes in the forestry regulations, please get in touch with Ben Hickson or your usual contact at Hesketh Henry.
Disclaimer: The information contained in this article is current at the date of publishing and is of a general nature. It should be used as a guide only and not as a substitute for obtaining legal advice. Specific legal advice should be sought where required.
