Thursday, February 29, 2024

Point of Order: Buzz from the Beehive - 29/2/24

ETS review will be good news (we think) for the forest sector but govt gets tough with Hamas and Israeli extremists

When the Luxon government took office last year, forest owners and investors were among the myriads of interest groups who pressed incoming ministers with pleadings, urgings and advice – typically self-serving – for change.

The forestry bunch hoped the new government would give clearer direction on the Emissions Trading Scheme as investment in the sector threatened to dry up in response to policy uncertainty.

Grant Dodson, president of Forest Owners Association, told Farmers Weekly the sector had had a whirlwind of ministerial and policy changes over the previous 12-18 months, leaving both overseas and local investors rattled.

He took some confidence from the National-NZ First coalition document, which promised to stop the review of the ETS that was then under way and restore confidence to the carbon trading market.

As Farmers Weekly explained, the most controversial reforms proposed by the previous government to revamp the ETS included separating forestry ETS units, and limiting the number of NZ Units (NZUs) emitters could use to offset their emissions.

Another proposal was to create two ETS markets, one for emissions reduction and one for removal. Big emitters could not use forestry NZUs to offset, and NZUs would be sold to the government, or on a separate market.

These proposals were further complicated by other government plans including centralising the sale of NZ carbon units, putting existing carbon traders out of business.

Add into this mix has been a limitation on foreign investors’ ability to buy land for forestry, having originally been favoured under the “special forestry test”. There has also been a significant increase in ETS charges.

Let’s see how the forest sector responds to today’s announcement of an independent review into the forestry component of the ETS Register to ensure it is efficient and cost-effective.

News of the review was posted on the government’s official website along with three announcements which address the country’s concerns with strife in Ukraine and the Middle East.
  • Foregn Affairs Minister Winston Peters has dealt the Russians another blow – the latest sanctions are Implementation of the G7-plus price cap on Russian-origin oil; making explicit the prohibition on exporting restricted items to Russia and Belarus through third countries; and designating 61 individuals and companies to counter evasion efforts.
  • He and the PM dealt a blow to extremist Israeli settlers in the form of travel bans. These bans are New Zealand’s response to the violent attacks against Palestinians in the West Bank by Israeli settlers. Peters said: “We are imposing travel bans on a number of people known to have committed violent acts. These individuals will not be able to travel to New Zealand.”
  • All of Hamas has been designated a terrorist entity. New Zealand has designated the military wing of Hamas as a terrorist entity since 2010. But the atrocities on 7 October meant no distinction can be drawn between the military and political wings of Hamas, Peters said.
  • The designation under New Zealand legislation freezes any assets of the terrorist entity in New Zealand. It also makes it a criminal offence to carry out property or financial transactions with them or provide material support.
There was more action on the health front, too. Health Minister announced the removal of access barriers to PET-CT scans as a result of Health New Zealand – Te Whatu Ora approving an updated national set of criteria that will allow for about 1,000 more PET-CT scans a year to be publicly funded.

This means New Zealanders will have the same access to PET-CT scans no matter where they live, Reti said.

The review will inform future decisions on funding the ETS regime forestry services, including the current revenue model.

McClay acknowledged that forestry owners had been raising concerns about the excessive costs imposed on them by the previous government.

He has identified 22 fixed service fees including a $30 per hectare annual fee for participants into the forestry ETS register that forest owners are expected to pay.

The review will examined whether the scheme’s operational costs are appropriate.

More than 560,000 hectares of post-1989 forest land are included in the ETS and over 4,000 forestry participants.

“They deserve to have confidence in the system the government has set up to manage their ETS obligations,” McClay said.

The review starts next month and is expected to report back by the end of April.

The Terms of Reference for the review is available here.

Latest from the Beehive

29 FEBRUARY 2024

Foreign Minister Winston Peters today announced a new package of sanctions as part of the ongoing international sanction response to Russia’s illegal invasion of Ukraine in February 2022.

Prime Minister Christopher Luxon and Foreign Minister Winston Peters have announced travel bans on a number of extremist Israeli settlers who have committed violent attacks against Palestinians in the West Bank.

Prime Minister Christopher Luxon and Foreign Minister Winston Peters have announced today the designation of Hamas in its entirety as a terrorist entity.

Forestry Minister Todd McClay has today announced an independent review into the forestry component of the Emissions Trading Scheme (ETS) Register to ensure it is efficient and cost-effective.

New Zealanders now have the same access to PET-CT scans no matter where they live, Health Minister Dr Shane Reti says.

Point of Order is a blog focused on politics and the economy run by veteran newspaper reporters Bob Edlin and Ian Templeton

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