CarbonCurious March 2026 - That carbon price + new ETS planning tools
- Rebecca Hunink
- Mar 12
- 4 min read
Updated: Mar 16
Carbon prices have had a rough year. And if you're planting exotic forest, the new LUC restrictions make upfront ETS planning more important than ever.
In our March 2026 CarbonCurious session, CarbonCrop CEO and Co-Founder Nick Butcher covered what's been driving the NZU price down, what it might do next, and demoed new planning tools to help you work through LUC restrictions before they catch you out.
In this post we'll cover:
What happened to the carbon price in 2025
What's driving the price - and where it might go
New LUC restriction planning tools
What happened to the carbon price in 2025
The NZU price started 2025 at around $60 and spent the year sliding. By early 2026, it was sitting around $45. A few specific events shaped that trajectory.
In March 2025, the government auction failed to clear. That effectively put a ceiling on prices for the rest of the year - buyers knew they could always access units at the auction floor price (around $64 at the time), so there was little pressure to pay more on the secondary market.
Then in November 2025, a government announcement decoupled the ETS in legislation from New Zealand's NDC obligations. The market interpreted this as a weakening of the government's commitment to keeping the ETS effective - and prices fell sharply. Ministers moved quickly to reassure the market, but confidence took time to recover.
Early January brought another dip: the end of a mandatory emissions return period (MERP) meant a wave of forest owners received several years' worth of units at once - and some needed to sell quickly, adding supply into an already oversupplied market.
By February 2026, letters between Minister Watt's office and the Climate Change Commission signalling ongoing ETS commitment helped stabilise sentiment. The price has since trended back up to around $45.
What's driving the price - and where it might go
The short answer: a large stockpile of privately held units. As Nick described it in the session, demand in the ETS runs at roughly 40 million tonnes per year against supply of around 27 million tonnes - with the gap broadly filled from a large stockpile of privately held units, which sat at around 135 million tonnes at end of 2025, down from a peak of around 164 million in 2022. These figures are indicative rather than precise, and the actual path will depend on policy settings, auction outcomes, and how quickly the stockpile is drawn down. Failed auctions reduce supply at the margin, but the real weight on prices is that stockpile, held by people who'll sell when the price suits them.
As for the outlook - nobody can say for certain. Some analysis points to a structural unit shortfall in the next five years that could push prices toward $90. Others forecast oversupply in the late 2030s that could drag prices back down to around $50. Both could be true at different points in time.
Nick's practical take: even at $45, carbon income is meaningful. But don't build your plans around a specific future price.
New LUC restriction planning tools
The second half of the session was a live demo of new tools in the CarbonCrop platform designed to help landholders plan around LUC restrictions - the rules introduced in 2025 that limit ETS registration for exotic forest on LUC 1-6 land.
The key question these tools answer is: given what you're planning to plant, are your ETS registration pathways actually going to work?
The platform now lets you map your intended planting against your LUC classification, showing how much of your land falls under each LUC category, what your 25% allowance looks like, and how much of that allowance is already spoken for across different registration stages (draft, intended, prepared, submitted, registered).
Critically, the tools also flag risk: if you're relying on an LUC 6 ballot permit or a transitional exemption as your pathway, and those don't come through, do you have enough 25% allowance to fall back on? For some farms - particularly those with a small LUC 1-6 footprint - the answer is no, and it's better to know that before you plant.
Two things remain unconfirmed as of the session: the specifics of how the LUC 6 ballot will work (the expectation is two ballots in 2026 - watch for announcements), and the erosion prone land designation, which currently only applies in the Gisborne district under the regional plan.
Nick's advice: do the analysis upfront. Getting your planning wrong at this stage could mean a lot of forest you can't register - and at even $45 a NZU, that's a lot of money to leave on the table.
Watch the full recording
Want to hear the full discussion - including Nick's live platform demo and the Q&A? The recording covers the price chart walkthrough in detail and shows the planning tools in action across two different farm examples.
You can also get a free high-level LUC assessment for your land - no platform access needed.
Price commentary in this post reflects Nick Butcher's analysis as presented in the March 2026 CarbonCurious session. It is not financial advice and should not be relied upon as a forecast of future NZU prices.
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