What is Carbon Farming?
Carbon farming is the practice of managing land—typically through forestry—to capture and store carbon dioxide from the atmosphere. In New Zealand, landowners can register eligible land in the Emissions Trading Scheme (ETS) and earn carbon credits (NZUs) as their trees grow and sequester carbon.
Why Carbon Farming?
Trees are nature’s carbon capture technology. As they grow, they absorb CO₂ from the atmosphere through photosynthesis and store it as biomass—in their trunks, branches, leaves, and roots.
A single hectare of well-managed pine forest can absorb 25-30 tonnes of CO₂ per year during peak growth years. That’s equivalent to taking 5-6 cars off the road annually.
The Opportunity for Landowners
Carbon farming creates a new income stream for landowners, particularly those with:
- Marginal land that’s uneconomic for traditional farming
- Erosion-prone hillsides that need stabilisation
- Retired farmland looking for productive use
- Bush blocks that could be expanded or enhanced
Many farmers are converting less productive areas into carbon forests while continuing to farm their best land. It’s not all-or-nothing.
How the Money Works
When you register land in the ETS and establish a forest, you earn NZUs (New Zealand Units) as the trees grow and absorb carbon. Each NZU represents one tonne of CO₂.
Current NZU prices typically range from $50-80 per tonne, meaning a hectare earning 25 NZUs per year could generate $1,250-2,000 annually in carbon revenue.
Important: Returns aren’t linear. Young trees absorb less carbon, peak growth happens around years 8-20 for pines, and you’ll need to account for harvest liabilities if you plan to cut the trees.
Native vs Exotic Forests
You have choices when it comes to species:
Radiata Pine (Exotic)
- Fast growth, well-understood carbon curves
- Higher early returns
- Typically harvested at 25-30 years
- Must surrender NZUs if harvested
Native Species
- Slower growth, lower early returns
- Permanent carbon sink (no harvest liability)
- Biodiversity and environmental benefits
- Growing interest and support
Many landowners choose a mix—pines for income, natives for permanence and biodiversity.
Is Carbon Farming Right for You?
Carbon farming suits landowners who:
- Have land that’s marginal for other uses
- Are comfortable with long-term timeframes
- Want to diversify their income
- Care about climate and environmental outcomes
- Can manage or outsource the compliance requirements
It’s not a get-rich-quick scheme. It requires planning, patience, and ongoing management. But for the right land and the right landowner, it can be a rewarding way to generate income while contributing to New Zealand’s climate goals.
Next Steps
Ready to explore carbon farming for your property?