High country leaseholders are crossing their fingers the government will see sense in adjusting legislation to better enable them to capitalise on carbon opportunities Emissions Trading Scheme (ETS) and He Waka Eke Noa (HWEN) bring.
Gerald Fitzgerald, legal counsel for the High Country Accord group, said Wellington has repeatedly overlooked high country Crown pastoral lessees when drawing up legislation, whether it be stock exclusion, biodiversity, and more lately new carbon rules.
“Again and again, we have been frustrated there is no recognition in policy design work of the particular tenure of Crown pastoral leases. This is at a technical legal level, and a lack of insight at a practical level on the different farm management systems on high country farms,” Fitzgerald said.
He said the extensive nature and light footprint of high country operations on leased public land presents government and New Zealand with an excellent opportunity to utilise the 1.2 million hectares for carbon sequestration.
“Over the years we have seen significant regeneration of growth on high country properties, particularly mānuka and kānuka, and major efforts by runholders themselves to improve and protect biodiversity.”
He said of the 1.2m hectares in pastoral lease, Crown has advice estimating 330,000 to one million hectares could be available for carbon sequestration, thanks to the high level of natural regeneration.
At present only a handful of leases have exotic forests, and only two have ETS certified blocks upon them.
“But there are now issues of fairness and opportunity here to address. The critical questions are who owns the carbon on high country leases, and can lessees participate in ETS or generate credits to offset He Waka Eke Noa liabilities?” he asked.
He said in comparison to freehold farms, there was an element of confusion in the way legislation is constructed in the Climate Change Response Act.
“To be fair, I think it has been a case more of ignorance in Wellington, rather than intent,” he said.
To register for ETS a participant must be a landowner, which leasees are not, or hold a registered forestry right.
Consent could be sought from the commissioner for Crown lands to grant a leasee a special forestry right.
But approval would be very dependent upon the particular property, and unlikely to occur for many due to conditions on protecting natural land values and minimising soil disturbance.
To enable ETS participation by high country farmers would require changes to the Act, including simplified consenting for permanent indigenous revegetation, or carving out a separate forestry right for leaseholders.
When it comes to HWEN, Fitzgerald said lessees needed more clarity about whether they owned the carbon that arises from managed indigenous revegetation.
He was encouraged by a HWEN review report that recognised the inconsistencies in carbon capture legislation.
“If you charge for carbon on one hand to have to take account on the other side for what has been captured, it has to also be fair to all land users,” he said.
Mt Nicholas Station lessee Kate Cocks said the position for high country runholders is also complicated by some stations, including hers, having vast tracts of indigenous bush area.
The efforts by runholders to cull deer and pests is effectively a form of carbon sequestration, by removing them as methane emitters, and increasing the health and carbon capturing capacity of native forests that are no longer subject to pest damage.
“There are a lot of opportunities in these areas that also impact on carbon capture but they can get lost when you get into these rules and regulations. For many the most beneficial thing we can do is simply kill deer,” Cocks said.
HWEN cost estimates for Phillip Todhunter’s Lake Heron station were $19,700 for 2025, rising to $64,800 if carbon prices moved to $138 a unit.
Cocks said estimates for Mt Nicholas in year one based on methane priced at 11c with no offset was $50,000 a year.
Todhunter said there was also a need for more clarity around the ability of runholders to amalgamate their leased blocks with freehold farms they may have, and how carbon sequestrated and emitted could be accounted for.
Fitzgerald said next steps including meeting with the Agriculture Minister Damien O’Connor for more clarity on carbon ownership under leases, possibly including a pathway for ETS participation that was by a way other than through forestry right.
