"While Air New Zealand employees who volunteer for our internal Green Team are involved with a range of community planting events, the proposed private afforestation fund is the first time we've developed and will directly fund an initiative to encourage new planting for carbon benefits," a spokeswoman said.
The airline's chief executive Christopher Luxon said Air New Zealand had been a strong advocate for more quality offsetting options.
"We are pleased to work with Government to encourage thousands more hectares of trees into the emissions trading scheme, which will create broader social, environmental and economic benefits," said Luxon.
MPI director-general Martyn Dunne says the Ministry was well-placed to be involved with this initiative.
"MPI has significant expertise and experience in forestry and forestry-related investment."
In October 2016 the International Civil Aviation Organisation reached a historic agreement on a global scheme designed to achieve carbon-neutral growth from 2020.