News and views

ForestX Comment





Despite what seems at times the endless frustrations of doing business in an environment largely controlled by a global pandemic, one of the very few stand out performers must be the strong rise in value of carbon units within the Emissions Trading Scheme (ETS). It was not so very long ago we were seeing the dollar value per tonne of carbon in the twenties. Now the Government has removed the cap allowing the value to ebb and flow in the open market, albeit with the inevitable tweaking as we progress, the current value is a whisker below $70 per tonne. This rise in value is an exceptional performance in anyone's language.

This performance, and the apparent ongoing need for the expansion of this scheme, bodes well for those who have existing on farm investments in forestry coupled with the ETS scheme. We are seeing the value of marginal land suitable for a 'change of use' to trees becoming more attractive on a daily basis. This of course will and is exerting pressure on the demand for approvals, which in turn is increasing the load and stretching the timeframes to process applications for new ventures to become registered.

Achieving registration is not as straightforward as we might have hoped. It is strongly recommended anyone considering entering into or expanding their interests in the ETS, commence the process sooner rather than later. Hesitation is now costing farmers serious income and there is little to indicate this is going to change. If anything, the opposite will occur.