Denmark first EU buyer of NZ permanent forest units

Friday 18th June 2010

Permanent New Zealand forests have been recognised as a credible way to store carbon for the first time by a European Union country, with the Danish Energy Agency buying 22,000 New Zealand Assigned Amount Units, based on 1,700 hectares of long-term forestry.

AAUs are not compliant with the Kyoto Protocol, and are not part of the emissions trading scheme, but are tradable and capable of being used by sovereign states to balance their carbon accounts, despite non-compliance.

AAUs also suffer reputationally because of their association with units created in Eastern Europe and Russia when the failure of former Soviet bloc economies led to massive carbon emissions reductions. The credibility of these AAUs is accordingly tainted.

So, acceptance of NZ AAUs by the Danish Energy Agency is significant, according to the deal's broker, Permanent Forests International of Christchurch.

"It shows Permanent Forest Sink Initiative credits are recognised by buyers as having quality," PFI's managing director Mark Belton told the Carbon News service. "Buyers are swamped with offers all the time, and mostly they won't buy them."

Belton says the sales process was slow because of the due diligence undertaken on the units.

Businesswire.co.nz

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