A 41ha piece of former forestry land in Naseby owned by the Central Otago District Council could soon come up for sale, as it is unable to be used by the public.
The land was hard to get to and often required obtaining permission from adjoining landowner Earnslaw One Ltd, which owns the Naseby Forest, meaning it was not used, council property officer Brian Taylor said.
Being ''generally off-limits for most people ... it offered no real recreational potential for the benefit of the community'', he said.
The block had been planted as a forest but with the Emissions Trading Scheme in effect, it was expensive to maintain and so the Maniototo Community Board decided to get out of the forestry game.
Under the scheme, the owners of land planted in forest before 1990 that had since lost trees, either by felling or natural forces, were legally bound to join the scheme.
If they did not replant, they would need to pay the Crown the equivalent worth of the carbon credits.
In 2011, the board decided to replant the forest block after it lost 95% of the trees in severe wind, in order to avoid a potential $373,160 bill under the scheme.
That was more than three times the cost of replanting but some of the new trees did not thrive.
The replanting was done in September and October last year but early this year, the trees showed ''advanced stress from competition and moisture deficiency'' and a council forestry consultant indicated a loss rate of up to 30%, Mr Taylor said in a report to be considered by the board next week.
The competition came from ''invasive'' grass growth that could have cost around $15,000 to tackle but as the growth was ''mature'' spraying might not have got rid of it.
Mr Taylor said it was ''doubtful whether the cost of spraying would justify the benefit''.
When the board decided to replant, carbon credits were trading about $20 per unit and were expected to rise to $25.
The New Zealand price then plummeted to $1.60-$1.80 while the European market had ''collapsed completely'' and was trading at 15c-20c.
An ''anomaly in the law'' that allowed the purchase of the European credits would be closed by 2014 so the board needed to act immediately to take advantage of the cheap price to quit forestry, Mr Taylor said.
Excluding management fees of $2800, it cost the board $2590 to exit the scheme but it would have cost $42,000 to replant the 30% of the trees that were not doing so well.
Mr Taylor has recommended the board declare the land surplus to requirements, revoke its status as a domain, applied in error about 40 years ago, and dispose of the land.
''Taking into account the location and nature of the property, the land is considered unsuited to any other form of reserve, and there is no merit in its retention.''
If the board agrees to Mr Taylor's recommendation, the council would need to ratify the decision at its September meeting before formal notification and the consideration of any submissions received on the matter would occur.
Subject to ministerial consent, the land will be offered for sale next year.
