Te Arawa has decided not to bid for the closed Rotorua sawmill, Tachikawa, because it would cost about $25 million to buy and run. Source: Radio New Zealand
The company went in to receivership in October with 120 employees, most of them Maori, losing their jobs.
It prompted a Te Arawa collective to consider putting up a bid to retain jobs and to reclaim tribal land.
Te Arawa Federation of Maori Authorities deputy chair Te Taru White, who has been leading the idea, said he is disappointed it could not put up a bid, but it wasn’t sustainable for the collective to make an offer.
He said the tribal collective estimated it would cost about $25 million to purchase and operate the mill.
White said it needed to take account of a volatile exchange rate, a fluctuating market and a competitive industry.
He said it considered bidding for the land but according to its estimations it would be too expensive at about NZ$3 million.
The Carbon Farming Initiative (CFI) was launched in 2011 under the former Labor government to drive emission reductions in sectors not covered by the carbon pricing mechanism, as part of Australia’s target to cut greenhouse gas emissions to 5% below 2000 levels by 2020.
Under the CFI, developers that curb carbon emissions are issued offset credits, known as Australian Carbon Credit Units (ACCUs), which they can sell to big emitters looking to meet carbon targets imposed by the government.
As the Abbott government is eager to repeal the carbon pricing scheme, demand for ACCUs has fallen away and development of new projects has almost ground to a halt.
The conservative government wants to keep the CFI as a supplier to carbon cuts under its proposed Emissions Reductions Fund, but it remains unclear how the fund will work.
Of the 3.1 million ACCUs issued since the Carbon Farming Initiative started two years ago, nearly 80% have gone to projects that capture methane emissions from landfills. But those are mostly projects that were already up and running when the CFI launched.
Landfills have been successful under the scheme but other activities have been slow to take off and only a few projects have seen the light of day.
“We haven’t had any investment interest in 18 months,” said Andrew Grant, CEO of CO2 Group, Australia’s biggest carbon project developer.
In addition to political uncertainty and lack of demand, project development is also hampered by the long lead-time and approval process farming and forestry projects need, according to observers.
“A few small forestry projects have gotten through however, the larger projects have found it very onerous,” said one developer who wished to remain anonymous.
“In reality, investment in new CFI land-based forestry projects will not be viable without a significant carbon price or a clear price and purchasing signal.”
Last week’s Carbon Expo held in Melbourne said as much with scant information relating to forestry evident in discussions. Presenters touched very lightly on the subject.
Carbon Expo 2013 concentrated mostly on the detail behind carbon business in Australia with overseas and local experts discussing at length the changes and repercussions of the new government regulations in the post-election carbon landscape.
With at least another seven months likely to pass until the future of Australia’s climate policy becomes clear, observers expect the nation’s offset market to languish.
