New Limits on Farmland to Forestry Conversions

The amount of farmland being converted to exotic forestry and registered in the Emissions Trading Scheme (ETS) has been limited with the introduction of the Climate Change Response (Emissions Trading Scheme-Forestry Conversions) Amendment Act 2025. The legislation came into force on 31 October 2025.

‘Farmland’ is classified according to the Land Use Capability (LUC) scale. Classification is based on the farmland’s long-term ability to support various productive uses. Features such as climate, soil, slope, vegetation and erodibility are taken into consideration. The classes include:

•   Classes 1 to 4 – arable land for a range of cultivations

•   Classes 5 to 7 – non-arable land suitable for pastoral farming and forestry, and

•   Class 8 – severe restrictions around land use.

Since 31 October, there are new limits on how much exotic forest can be registered on the ETS. The restrictions impact post-1989 forest land classified within LUC classes 1 to 6 that was not already forestry land on 31 October 2025, where the forest species on the land are mostly exotic. If one of the following exceptions apply, however, the land can still enter the ETS:

•   Indigenous forest land

•   Exempt as Māori land

•   High or severe erosion prone land in a regional or district plan

•   Crown afforestation land

•   Unmapped and not on the national LUC scale map

•   Unfarmed land, or

•   Classed as 7 or 8 on the LUC scale.

You can check your land’s classification on the national LUC map or have your own LUC assessment completed.

If land is restricted from conversion to forestry under the Act you may still register up to 25% of restricted land on an individual farm in the ETS scheme. There is also a biannual national ballot for land classed as 6 on the LUC scale to allow a further 15,000 hectares annually to enter the ETS scheme. The 25% allowance is of your total land within the farm boundary including any non-restricted land.

The new legislation aims to protect the future of New Zealand food production, while still allowing sustainable growth in the forestry sector. It also protects farmers’ ability to diversify their farmland.

DISCLAIMER: All the information published is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this article. Views expressed are those of individual authors, and do not necessarily reflect the view of this firm. Articles appearing in this newsletter may be reproduced with prior approval from the editor and credit given to the source. Copyright, NZ LAW Limited, 2019. Editor: Adrienne Olsen. E-mail: adrienne@adroite.co.nz. Ph: 029 286 3650 or 04 496 5513.