Is Your Forest ETS Compliant? Now is the time to act and reduce Cost
Innocent Non- Compliance may be Widepread
We estimate up to 35% of ETS forestry participants have non-compliance issues and the majority will be unaware a problem exists. Some non-compliance will be minor but others can be significant.
Common Issues- Mapping & Emissions Returns
Most issues relate to mapping and claiming carbon, or a combination of the two. Often forests are mapped incorrectly and not according to the GIS Mapping Standard or emissions returns are calculated in error. Both of these issues can lead to an over issuance of NZUs.
But Didn't MPI Approved the Mapping & Carbon Claims?
MPI do carry out some checks but ultimately it is the participants responsibility to ensure they are complying. The online ETS mapping tool initially used out of date imagery which has resulted in errors. Because of this even quite significant over issuance of NZUs can occur.
Non-compliance can be Expensive
Not only do participants need to repay NZUs but there can also be significant penalties. These include a doubling of the number of units to be repaid and an additional monetary charge of $30 per unit. More extreme offences can attract fines of up to $50,000 and imprisonment.
How to resolve Non-Compliance- Voluntary Disclosure is Key
The good news is that MPI are more interested in ensuring good compliance than punishing inadvertent and innocent mistakes and they have the discretion to waive penalties up to 100% in some cases. Crucial to this is Genuine voluntary disclosure. Other factors include participants willingness to assist, previous compliance history, and reliance on professional advisers.
Why Act Now?
Right now the price of replacement NZUs is still relatively low, whereas prices may increase into the future. Also over issuance will compound and grow over time. Lastly it is best to come forward and voluntarily disclose early and likely get penalties waived rather than get audited by MPI down the line.
More information can be found in an article by Carbon Forest Services published in the NZ Tree Grower Magazine which can be read here.
Our Services- How we can Help
We can audit your forest mapping and emissions claims to assess if compliance issues are present. If issues are found we can then help you plan and implement the best path back to good compliance at least cost.
We have a proven track record of already helping many NZ forest owners rectify non-compliance issues successfully and at low cost.
What will it cost me?
We charge a fixed fee of $165+GST to carry out the high level original assessment. Further costs will depend on the type of issues that are found.