The Forest Owners Association says an intention by the Government to make companies which use wood pellets and other biofuels pay a levy on emissions above a certain level, is the last straw for many in the forest industry.
David Rhodes says the Ministry for the Environment has asked for feedback on a proposal that companies pay for methane and nitrous oxide emissions above 5,000 tonnes.
He says while it will affect only large emitters, such as pulp and paper mills, it sends the wrong signal.
Mr Rhodes says the message the Forest Owners Association takes is that the Government can't be relied on to develop an emissions trading scheme which is fair and rational.
A Parliamentary Select Committee is currently considering a Bill which amends the scheme.
The Emission's Trading Scheme is part of the Government's efforts to reduce greenhouse gas emissions and meet a target set by the Kyoto Protocol.