NZ Companies creating forestry portfolio

Friday 15 Mar 2019

 
Air New Zealand, Contact Energy, Genesis Energy and Z Energy have joined forces to create a partnership that will establish a forest portfolio to sequester carbon and help meet their annual requirements under the emissions trading scheme.

Dryland Carbon LLP, or Drylandcarbon, chief executive Anthony Beverley said that now the partnership has been created, the next task is to focus on the land and the portfolio establishment. The main aim is to produce a stable supply of forestry-generated NZU carbon credits for the four companies. The initiative, however, will also expand New Zealand’s national forest estate.

Beverley said Drylandcarbon will target the purchase and licensing of marginal land across the country but will focus on where New Zealand has traditionally seen the strongest forest growth rate. "We are targeting the highest growth areas as the purpose of the partnership is to sequester as much carbon as we can," he said.

The portfolio strategy is to both acquire land and license land. "We see this as a really good opportunity for us to partner with landowners. We think there is a really compelling opportunity with landowners with marginal land that are looking for partners with capital and carbon expertise," he said.

The portfolio will focus on permanent forests but will also look to include some rotation forests. "Because of our carbon focus we would prefer some of the more remote, more difficult land as it's more cost effective."

The initial plan is to plant exotics but the aim is to transition to natives over time, he said. All four partners said the investment amount is commercially sensitive. Both Genesis and Air New Zealand said the value of the partnership is "far greater than purely financial."

Drylandcarbon will be managed by Lewis Tucker & Co, which describes itself as a boutique agri-business advisory service. The four companies will not have day-to-day involvement in the running of the business. Drylandcarbon is currently engaging with farming and regional communities around establishing carbon forests on private land.

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