Despite initial uncertainty and scepticism, the risk of climate change and the need to manage it proactively is now recognised by the majority of the world as real and immediate. The call to action is escalating rapidly and NZ has committed to an ambitious medium to long-term emission reduction programme.
Carbon sequestration through forestry has a key contribution if NZ has any hope of achieving its reduction programme and the Crown is committed to supporting afforestation.
As a result, the commercial opportunity available to owners of land suitable for afforestation have consolidated and improved materially. Drylandcarbon’s analysis suggest that income returns from marginal land are significantly higher when used for carbon farming rather than traditional pastoral farming.
Research studies have concluded that there is scope for carbon credit prices to increase, potentially materially over time, and this would further enhance the diversification opportunity and commercial returns from carbon farming.
Establishing forestry for carbon farming and potentially for rotation harvest on marginal land within a broader farming operation has the potential to be a valuable addition to a farming portfolio in terms of diversification, income enhancement, and retiring environmentally susceptible land.
Why are we doing this?
A partnership with Drylandcarbon has the potential to improve land profitability, productivity, environmental outcomes and supports rural communities.
Through our approach to long-term partnerships and commitments to rural communities, Drylandcarbon is the clear partner of choice for landowners considering diversifying into carbon farming.
FOR FARMERS
A partnership with Drylandcarbon offers farmers the opportunity to:
- Retain ownership of their land
- Diversify and increase income streams
- Improve productivity on marginal land
- Support succession planning and debt reduction through higher income streams
- Capture potential environmental benefits from afforestation of their marginal land.
- If desired, access carbon credits to offset the emissions generated by the balance of their farming operation
- Focus on and intensify productivity from their more productive land
- Reduce risk through outsourcing the management forestry operations and participation in the ETS and carbon markets
FOR NZ INC
The investment commitment the investor partners have made in Drylandcarbon is significant, with the potential to create a large geographically diverse forest portfolio.
This commitment, together with the opportunity for landowners to partner with Drylandcarbon for afforestation, will generate a number of significant benefits to NZ:
- Enables high sequestration of carbon from the environment at a time when NZ is highly reliant on forestry to minimise its emission reduction shortfall and the cost of this.
- Will see large forests established that will collectively make a significant contribution to the size and geographic diversity of NZ’s national forest estate, many of these established under a partnership model with farmers.
- Sees afforestation in the right place – marginal, uneconomic land where forestry is the highest and best use of the land.
- For permanent forests established on difficult erosion prone land, it establishes a much more suitable and environmentally friendly land use, with the potential to improve sediment retention and water quality.
- Enables the economic return from marginal, uneconomic land to be improved, that is significant for farmers and wider rural communities.
- Intensifies the productive opportunity for better pastoral land.
- Diversifies revenue streams and enables returns for tangata whenua off uneconomic land, while protecting the land.
- Enables New Zealand to advance towards meeting its international climate change commitments.
Because afforestation is such a long term commitment, it is critical that the land and captial partners in any afforestation partnership venture have well aligned objectives, values and priorities.
Establishing plantation forestry for the revenue generated by carbon credits represents a new set of choices for landowners. There are other participants in the carbon markets, but Drylandcarbon seeks to be the credible and trusted partner of choice for landowners.
Knowing who you are dealing with: Drylandcarbon is backed by four large, established and very well regarded kiwi companies with strong commitments to transparency, environmental best-practice and to supporting local communities.
Genuine partnership: Drylandcarbon prefers a long-term partnership model with land owners, through which farmers retain ownership of their land and Drylandcarbon provides the capital for afforestation, manages the planting, forestry and ETS operations and compliance obligations.
Portfolio strategy and composition: Drylandcarbon's portfolio will comprise directly owned land and land established in forestry under forest right agreements with individual landownners. Its forest portfolio will comprise both permanent forests operated for carbon farming and not intended for harvest, and rotation forests operated for both carbon farming and tree harvest.
Managing risk and operations: Drylandcarbon provides landowners with a transparent option to access capital, forestry and ETS expertise to establish forestry to generate a long-term income stream. Drylandcarbon manages the operational forest management, engagement with carbon markets and certain other risks in a transparent partnership with landowners, leaving them free to focus on the balance of their farming business.