Plantation forests are sources of sustainable timber and actively growing carbon sinks, which can deliver tradeable carbon credits.

Carbon gives forests a far more powerful role in our economy.

Plantation forests are not only sources of sustainable timber, but are actively growing carbon sinks that can deliver tradeable carbon credits. Blairlogie Pine Investment is structured to harness both streams: carbon credits and the option of timber returns.

Here’s how it all fits together – and why Blairlogie Pine Investment is designed to capture the upside.

Carbon credits: how do they work?

It’s now broadly accepted that greenhouse gases from use of fossil fuel is driving climate disruption. A stable climate is essential if we want to grow crops, avoid extreme weather events, and support healthy communities.

The Emissions Trading Scheme (ETS) is an essential tool in New Zealand’s strategy to meet its greenhouse gas reduction targets. Under the ETS, large emitters must buy and surrender carbon credits (NZUs) for the emissions they produce, effectively putting a price on carbon.

Forests that actively remove carbon dioxide from the atmosphere earn these credits, creating a valuable revenue stream for landowners who invest in carbon forestry.

This system rewards sustainable land use and ensures that emitters carry the cost of their environmental impact. Ultimately, the ETS encourages industries such as energy, power generation and transportation to innovate, invest in cleaner technologies, and transition toward a low-emissions economy. At the same time, the ETS rewards those, such as forest owners, who help get us there.

Over the past several years, the NZU market has demonstrated both resilience and strong upward price momentum, reflecting tightening supply and growing demand from emitters.

Independent analysts forecast continued strength in carbon pricing as New Zealand advances toward its 2030 and 2050 emissions reduction targets, reinforcing the long-term revenue outlook for registered carbon forests.

Development of ETS and carbon accounting

Over the past decade the ETS rules have shifted materially, especially around how forest carbon is accounted for. The treatment of forests in the ETS depends partly on whether land was forested pre-1990, and when registration occurs, as well as the carbon accounting method chosen or mandated.

Pre-1990 vs post-1989 forest land

• Pre-1990 forests (afforested land that existed on January 1, 1990) receive far less favourable treatment. They do not accrue carbon credits for growth and have harvest restrictions.
• Post-1989 forests (land that was not afforested as at January 1, 1990 and is now planted) are eligible for voluntary registration and accrue credits as carbon accumulates. These are the typical carbon forestry investment vehicles.

Stock change vs averaging accounting

This is a crucial distinction – and a real source of value difference in carbon forest investments.

• Stock change accounting: Under this method, forest owners earn credits as the forest’s carbon stock increases, and must surrender credits if the stock is reduced (for example at harvest or if carbon is lost). This “earn as you grow, pay when you cut or reduce carbon” method is close to a direct tracing of carbon flows.
• Averaging accounting: Introduced more recently (mandatory for new entrants), averaging gives forest owners credits up to a long-term average carbon stock level rather than based on the actual annual growth trajectory. Under this method, carbon credits stop accruing once the forest reaches its average (by age), and the credits typically do not need to be surrendered upon harvest (assuming replanting).

This is the critical drawback of averaging: once a forest moves past its “average age,” no further carbon credits accrue; even if the forest continues to sequester carbon in later years. Averaging is mandatory for new forests registered in the ETS from 2023 onward unless they are permanent forests, which still use stock change accounting.

This makes it harder for new investors to benefit from a full life-cycle carbon accrual. But for forests like Blairlogie Pine already registered and structured under stock change, Blairlogie Pine is able to leverage that legacy advantage.

How Blairlogie Pine is structured to capture value

The key features of Blairlogie Pine Investment follow.

• Blairlogie Pine is an 888-hectare forest in the Wairarapa region, with over 80 per cent of the land registered in the ETS and eligible for carbon credits under the more favourable stock change accounting.
• Its projected internal rate of return (IRR) is about 9.8 per cent, per annum.
• The minimum investment is 200 shares – approximately $13,538.
• Distributions from carbon credit sales are forecast to begin in 2034.
• Dual revenue streams: carbon credits and optional timber harvest.
• At exit in the final year, land and any standing timber will be sold.
• Each 200-share investment will sequester around 48 tonnes CO₂e annually – more than 10 times the average New Zealand household emissions.
• Forest Enterprises Limited, a licensed MIS manager, is the investment manager, bringing high integrity experience, governance safeguards, compliance systems, and advantages of scale.
• Forest Enterprises combines investment administration and forestry stewardship, which helps align interests and reduce costs.

Forest Enterprises has a commitment to sustainable forest management to deliver long-term value to investors, communities and the environment.

Creating wealth, naturally

Blairlogie Pine Investment provides portfolio diversification and lower volatility. Being a land-backed, biological asset, it effectively bridges climate goals and investor returns. Blairlogie Pine Forest is where environmental responsibility and financial performance come together.

A copy of the product disclosure statement for Blairlogie Pine Investment is available at forestenterprises.co.nz/blairlogie-pine and on the Disclose Register at disclose-register.companiesoffice.govt.nz.

 

Forest Enterprises Limited is the licensed manager of this investment under the Financial Markets Conduct Act 2013.

 

Projected returns are not guaranteed. Returns are based on assumptions and may differ due to market conditions, carbon credit prices, forestry yields, and other factors.