Time to file an emissions return

Denis Hames

By Denis Hames, Crowe Horwath partner and agri/trust specialist

At the end of this year all registered post-1989 forest owners are required to submit a Mandatory Emissions Return (MER) to the Ministry for Primary Industries (MPI).

This requirement has brought into focus the fact that many farmers (and indeed accountants and lawyers) are not aware of their responsibilities when land has been bought or sold.

MPI is being very vigilant in this area and penalties apply if the correct transfer of participation forms have not been completed as part of the purchase and sale process.

The mandatory MER returns will also be more complicated than previous emissions returns. This is especially the case when you have harvested any trees on registered post-1989 forest land, or do not have the correct details or authorised persons on your account(s).

If you have 100ha of post-1989 forest land registered in the ETS you will need to add field measurements to complete your MER.

The field measurement approach will calculate your forest's carbon stocks. If you have reduced your registered forest area to below 100ha there are other regulations to follow through on.

Should you own less than 100ha you use look-up tables to give pre-calculated values for a forest's carbon stock based on its age, region (if pinus radiata) and forest type.

Where all of the land has been deforested, the land must be removed from the ETS (unless replanted). The removal is done by filing a deregistration form.

If only one area of land has been removed then the remove a carbon accounting area form needs to be submitted.

This serves as a good reminder that this is an opportunity to collect the second five years' worth of carbon credits with the traded carbon price currently sitting at around $18/tonne. Other opportunities in this process may involve:

* reverting indigenous vegetation or native/amenity forests
* registering plantings of poplar and willow (that are greater than 30m wide on average) and unlikely to be felled due to the protection purposes they were planted for
* registering any pinus radiata plantings that have not been previously registered because of the uncertainty around the ETS.

What is certain is the ETS is here to stay, the carbon price has increased substantially from previous lows, and compliance around the scheme is going to be enforced. There is also a lot of uncertainty around original registrations and what this means regarding the filing of this year's MER. You need to talk to your ETS experts and not leave this to the last moment.

For further information please contact the team at Crowe Horwath on 06 858 5540.
This information is general in nature and readers should seek specialist advice before making financial decisions.