What are the best alternatives to H.3 NZ Pine for board and batten?

For board and batten cladding, cedar is excellent although it is the most expensive. Imported cedar is always completely free of knots.

The second choice is heart macrocarpa. It is unlikely that there would be any or much sapwood in macrocarpa but sap macrocarpa is not durable. Knots in macrocarpa have an undesirable habit of checking but for vertical board and batten cladding that is not a problem because it will be backed with a building wrap.

Douglas fir should be durable enough for this application but there are doubts, especially if there is some sapwood on the boards.

For that use the heartwood of western red cedar, or macrocarpa would be suitable. Locally grown western red cedar is likely to be knotty and slightly less durable than imported western red cedar. Imported western red cedar has been available in clears and knotty grades but the latter sometimes include bark encased knots which are likely to come loose in service. Douglas fir is less durable, somewhat unreliable, although it has been used for external sheathing.