New Fees and Charges in the New Zealand Emissions Trading Scheme: What You Need to Know

The Ministry of Primary Industries (MPI) has updated the fee structure for the Emissions Trading Scheme (ETS). Effective from 19 October 2023, understanding these new fees is important for those who are already part of the ETS or considering joining. In this blog, we’ll break down the new fees, tackle some of the most pressing questions you might have about these changes, and share our perspective.

Summary of the New Fees

In total, there are new fees for 22 existing and new ETS services. These range from application costs to emissions returns and more.

Below is a breakdown of some of the most relevant new fees:

Service Description	Fees (NZD)
Annual fee per hectare of Post-1989 land registered in the ETS	$14.90/ha/year (Note: changed from $30.25/ha/y in Jan 2025)
Registering Post-1989 Forest Land	From $488.89 to $4,125.00
Adding More Land into the ETS	From $88.89 to $4,125.00
Emissions Returns	$165.00
Move post-1989 forest land registered as standard forestry to permanent forestry	$742.50
​Removing all your post-1989 forest land from the ETS and deregistering	$577.50, plus surrender of all units issued for the forest.

You can view the full list of fees on the MPI website, which you can view here.

Frequently Asked Questions (FAQ)

How much is the annual charge going to cost me specifically?

The annual charge will be $14.90 per registered hectare. For example, if you have 20 ha registered, your annual fee will be $298.00+GST. This fee is for any forest registered, regardless of its species or accounting method. There is an exemption for indigenous forest which is less than six years old. Note: The annual charge is not the only fee you'll incur. If you submit an emissions return, the fee to process the transaction is $165.00.

When do I need to pay the annual fee?

If you are a participant with post-1989 forest land in the ETS, you will receive a first invoice in November 2023 with your annual charge calculation based on the total area of forest land that you have registered in the ETS. The invoice will be sent to you as the participant, regardless of whether you have a forestry consultant nominated as your representative and will be due in dollars (not NZUs). The first invoice you receive for these annual charges will be calculated from registered hectares on 19 October 2023 for the 256 days until 30 June 2024. From 1 July 2024, the charge will become annual and apply from the beginning of each financial year (from 1 July to 30 June). This annual charge will then be based on the land registered in the ETS on 1 July and covers the year ahead (the following 12 months). If you register or add more land within a year, you will be invoiced for a part-charge that covers the remaining portion of the annual charge for that year, once the application is complete.

Do I pay an annual fee even if my forest’s net sequestration is zero or negative?

Yes, the annual charge of $30.25 + GST per hectare applies regardless of whether your forest's net carbon sequestration is zero or negative. This fee is mandatory for all registered forests, except for indigenous forests less than six years old. For example, a recently harvested forest will have a negative carbon sequestration accounting for the loss in carbon due to the decay of the initial forest. During this period, no credits are earned but the annual fee is still due. Further work will be conducted by MPI for forests registered under Averaging Accounting past their average age that are effectively not earning any more units.

What if I don’t like this? What are my options to exit or deregister?

For most people, the ETS incentives will continue to provide a net benefit. Forest registered under Stock Change or Averaging Accounting If you're contemplating deregistering from the ETS, you will need to notify MPI. This is free of charge until 19 October 2023, before the new fees come into effect. After 19 October 2023, you can still deregister from the ETS but will have to pay the new fee of ‘Removing all your post-1989 forest land from the ETS and deregistering’ of $577.50. Deregistering from the ETS, will trigger the standard deregistration surrender obligation equal to 100% of the NZU issued to date for the deregistered land areas. Forest registered under Permanent Accounting If you have a forest registered as permanent, you have committed to keeping the forest for at least 50 years. You are not allowed to deregister the areas from the ETS.

What are other fees that MPI is introducing?

In addition to the annual fee mentioned above, MPI has announced a new pricing structure for 22 existing and new ETS services, effective from 19 October 2023. You can view the full list of fees on the MPI website, which you can view here.

Our Perspective

We're extremely disappointed by the introduction of these new fees, particularly in the context of permanent native forests which are disproportionately impacted due to their lower carbon sequestration rates and lower gross returns.

The introduction of a compulsory ongoing fee for all registered forest creates a concerning precedent and significantly weakens the incentives of the ETS for native forest restoration - in our view these new fees are in conflict with broader policy objectives around incentivisation of native forest restoration.

While the aim is to shift the financial burden of the ETS for forestry from New Zealand taxpayers to ETS participants, we believe that the impact on native forests carries a high risk of perverse incentives. This is compounded by the ongoing ETS review and uncertainty around the treatment and price of forestry removals in the future.

It's a challenging situation, and like many people, we’re figuring out what this means for our customers and our forests, but despite this uncertainty and new cost, we believe the ETS incentives will continue to provide a net benefit for the majority of landholders.