3 key differences between the Emission Trading Scheme and Native CarbonCrop Units
In this post we’ll dig into some key differences between Native CCUs and the NZ Emissions Trading Scheme (ETS) and outline 3 ways that Native CCUs have been designed to help landholders access more incentives for native forest restoration.
Native CCUs complement the ETS by issuing credits for indigenous forest that wouldn’t otherwise be registered under the ETS, giving landholders the best of both schemes.
To be crystal clear:
CarbonCrop offers a free land assessment to New Zealand landholders via our website. If land qualifies for carbon credits under the ETS, we help register these areas on the landholder’s behalf and support them with ongoing monitoring and compliance activities, enabling them to earn New Zealand Units (NZUs) under the ETS.
If areas of native forest don’t qualify for the ETS but do qualify for Native CarbonCrop Units (CCUs), the landholder can choose to register that forest under the CarbonCrop Native program and to be issued CCUs instead. The same area of land is never registered under both schemes at the same time.
1. Native CCUs recognise forest established before 1990
One key difference between the schemes is that the ETS excludes indigenous forest established prior to 1990, even where it’s still sequestering carbon today, whereas Native CCUs can be issued to forests established at any time, with issuances based purely on their ongoing carbon sequestration.
To successfully register land in the ETS, the landholder must prove that it hadn’t started regenerating prior to 1990, which isn’t a simple thing to do - especially with marginal, scrubby land that has been intermittently grazed, for example.
With Native CCUs, instead of basing eligibility on a single establishment year, we focus on how much new carbon is being actively sequestered by that forest. This enables us to recognise native forests that were established before 1990 and even to incentivise landholders to improve the carbon sequestration of older degraded forests. We believe carbon offsets should reflect the amount of carbon being sequestered today, not just the year a forest was established.
Note we don’t issue credits back to when the forest started growing; Native CCUs are issued for carbon sequestered within the last five years, and every year forward as it continues to grow. This last principle is similar to the ETS, which awards NZUs within carbon accounting periods which typically last five years.
2. The ETS registration process advantages exotic planting over native regeneration
When registering forest for the ETS, it’s necessary to draw a precise boundary around the edge of a forest and identify a single establishment year for the trees within it. This is relatively straightforward for exotics like pinus radiata which often get planted uniformly in one big block, but a different story for regenerating native forest, which tends to spring up at different rates through self-seeding. Worse still, the ETS rules don’t permit the expansion of a registered area once it’s registered, and require NEW registered areas to be of at least 1ha and 30m average width, making it almost impossible to register areas of new ongoing area at forest fringes… exactly the way natural regeneration progresses. Given the difficulty of registering native regeneration, it’s no surprise that the majority of forests registered in the ETS are exotics.
Native CCU are designed differently. Instead of mapping a boundary around the trees which meet the ETS definition of qualifying forest land, the landholder can decide where their registration boundary goes based on their intention to reforest.
CarbonCrop uses artificial intelligence to calculate the actual ongoing carbon sequestration within that specified area, based on tree species, forest growth and maturity. This makes it easier than ever to register and recognise native forests.
3. Registered forest areas are easier to extend with Native CCUs
Landholders also tell us it can be hard to manage the process of aligning progressive regeneration with the areas registered under the ETS, because the forest boundaries change with time.
If native regeneration progresses across a hillside, for example, you can’t simply add small patches to the original area registered for the ETS unless each of those new patches is at least 1ha and at least 30m average width, and as described above that can take years of progression. To add any smaller area, the whole area would have to be deregistered, remapped and resubmitted - and while CarbonCrop uses tech to speed up the mapping process, it can still take the regulator months to approve the submitted changes. Worse still, the deregistration would require you to surrender all the NZU ever issued to the area you’re reregistering, which can create an insurmountable economic hurdle! The common result is that regenerating forest fringes simply go unrecognised in the ETS.
When it comes to managing change, CarbonCrop technology helps landholders to simplify their land management strategy. With Native CCU, if you’d like to increase the registered area you can easily extend the boundary at any time - and let our tech do the rest. And within the existing registered area, there’s no need to specify an exact forest boundary at any given time, as your AI determines that directly from the remote sensing data, and incorporates new forest automatically as it appears.
Apply for a free land assessment today to find out your native forest's eligibility for carbon credits.
We remotely analyse your forest's eligibility (with a little help from our AI) and calculate how much your carbon credits could be worth if you register. If you are not eligible for the ETS you may be eligible for Native CarbonCrop Units.