Contrary to what some may believe, forestry investors are not wanting to deliver a sea of pine trees across the rural New Zealand landscape in coming years.
Colin Jacobs, general manager of forestry investment company Lewis Tucker, told delegates at this year’s carbon forestry conference that there is even potential for significantly less land to go into trees, subject to forestry regulation changes.
Jacobs has overseen the establishment of the Dryland Carbon fund and more recently Forest Partners, with over 10,000ha of land planted for forestry and carbon sequestration with investors including Contact, Genesis, and Z Energy.
“For us it is about getting the most carbon benefit from each individual hectare,” Jacobs said.
He said this could be achieved even more effectively with longer rotation (50-year) forestry being included in Emissions Trading Scheme (ETS) forestry rules. Current regulations extend only to 28 years, with the government considering extending that to 40 years.
“But if you introduce the long rotation, it will deliver carbon benefits using significantly less land. A longer rotation model also would give additional areas of the country the ability to contribute to carbon – for example, Southland.”
Lewis Tucker has made a submission on the government’s proposed ETS regulation changes, asking it to include allowance for 50-year long-rotation forests.
Jacobs said the bulk of his company’s contact with landowners comes from farmers who have land that is less suitable for farming, and are keen to see it earning carbon income as an alternative.
“We look for tough marginal land to establish rotation forests on for a long period of time.”
Jacobs outlined some of the lessons his company has learnt in the sometimes fraught business of engaging in tree planting in rural communities.
His company typically enters into a negotiation with a view that some, but not all, of a farm will be planted.
“And often the neighbours will want to have a sniff at that property. Every property we have looked at will have had a neighbour who may have been looking to buy it for the past 5-10 years, who may get bent out of shape due to not being asked.”
Jacobs cited deals where his company would engage with that neighbour and reach agreements where they may buy a portion, leaving a portion for his company to buy and plant.
“And then they may tell us about part of their own farm they have that could be suitable.”
As absentee landowners, Jacobs said, his company has had to work hard to build trust in communities, appreciating the nuances and relationships that underscore all rural districts.
“And we look at ‘What could we do?’ versus ‘What should we do?’ when it comes to planting.”
In most cases fence-to-fence planting of the farm is not the thing to do, and usually subdivided portions of farms are identified for trees.
For example, he said the company has a 1500ha Southland farm the vendor inherited and only wants to farm 300ha of.
“We had a chat with his neighbours keen on parts of the farm. We could have planted 900ha, but planted 560ha of marginal land into rotation forestry, and also got a positive working relationship with three landowners.”
Jacobs said his company also looks hard at climate risk mitigation.
“With drier summers we need to look at where water could come from for fire control. You are putting a hell of a lot of fuel onto that land.”
Geographic diversity is also critical, spreading that risk of climate exposure.
Jacobs emphasised a desire by his partners to see NZ remain a food producer first and foremost, with the ability to also deliver timber investments that can grow significantly in the next 100 years.
“From a long-term perspective, we think this is the right approach.”
