The Forest Owners Association has rejected the Climate Change Minister's criticism of its stance on the Emissions Trading Scheme.
The association, along with others in the forestry sector, has been a strong critic of the Government's ETS scheme.
It believes the price of carbon in the scheme is too low because the Government has allowed unrestricted use of cheap foreign credits.
The association says that has removed the incentive for land owners and investors to plant trees for carbon storage and weakened its effectiveness as a means of reducing carbon emissions.
The minister, Tim Groser, has accused the forest owners of misleading the public with its criticisms.
He says there is no net deforestation taking place in New Zealand and the association is making self-interested comment.
However, association chief executive David Rhodes is puzzled by the Mr Groser's accusation that it is making misleading statements.
"All we're doing is reporting on how the foresty sector is reacting to the signals that Government is setting," he says. "There's no misleading about it, we're simply stating facts."
Mr Rhodes says with the current prices the Government has set there is an increase in deforestation and there will be virtually no new planting.
The forest industry wants the Government to limit the use of cheap carbon credit units in the ETS, as the European Union and Australia have done.