Planting more trees for the sequestration (removal and storage) of carbon is crucial to achieving this target. It is estimated an annual area of 44,000 hectares is needed to be planted annually to meet New Zealand's target of achieving net zero by 2050.
Traditionally, the capital requirements for establishing a forest and the lack of cashflow generated throughout its life have made forestry investment a difficult proposition for domestic investors seeking cash income.
This situation has changed in recent years as a result of policy changes around climate change and more widespread acceptance that the phenomenon is real and happening. Approximately 1.74 million hectares is planted in production foreest across New Zealand down from 1.83 million hecatres from the peak in 2003.
The price of one New Zealand Unit (one tonne of carbon) has more than doubled over the last two years strating from $35 in September 2020 to reaching peaks of over $85 in September 2022.
A positive demand outlook for New Zealand forest products here and overseas along with the potential for generating income from carbon sequestration has sparked renewed interest in this key export earning sector and opened up new opportunities for forestry and carbon investment.
Gross asset value