Thursday, December 7, 2023

Risk and reward for NZ in EU’s green efforts

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Push for organics is good news for some exports and a wake-up call for others.
David James Photography (copyright)
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The risk of New Zealand’s primary sector being left behind is very real as Europe’s organic expectations grow and legislation tightens up on pesticide use.

A new Our Land and Water report looks at the impact of the European Union’s Green Deal on NZ’s land-based producers and signals some rapidly advancing changes that offer as many opportunities as threats, co-author Tiffany Tompkins said.

The EU Green Deal is a package of wide-ranging proposals made by the EU with climate change at its centre, aiming to improve sustainability and reduce emissions.

Tompkins, the CEO of Organics Aotearoa NZ, flags the significant role organics is poised to play in the EU Green Deal. 

Expectations are that 25% of farmed area will be committed to organics by 2030 under the Farm to Fork initiative.

Coupled with this is the goal to reduce pesticide use by 50% by 2030, with a ban on the importation of any food products that contain any of the EU’s 195 banned treatments. 

“Until now it has been possible to import food products that may have had these pesticides applied, even though EU farmers could not use them,” Tompkins said.

The OLW report flags the issue because NZ has banned only 27 chemicals, against almost 200 in the EU.

“That is a big discrepancy. It does not mean we use all of them, but it does mean on a regulatory basis it raises a question about how sustainable NZ’s use of some chemicals is, and is something that can be cleaned up.”

But Tompkins said the EU is providing both the demand “pull” and supply “push” for increased organic sales, with strong promotion to consumers while also demanding more from its producers.

For the likes of NZ apples, pears and wine, which are all moving to significant reductions in pesticide use, this provides an opportunity they are well positioned for, with or without legislation.

“We asked what the opportunities were here, and modelled wine and dairy sectors for organic opportunities,” she said.

The wine sector was identified as having market opportunities to the value of $1.5 billion, with the bulk of that falling in Germany at $438m. 

Current total wine exports from NZ to the EU are about $150m a year.

For dairy, the opportunity has been identified as worth an additional $370m, with the Netherlands accounting for the bulk at $112m. NZ dairy exports to the EU are presently about $160m a year.

Tompkins said the EU’s regulations are only the beginning of a greater global move to organics, with a domino effect occurring among other NZ trade partners. 

Japan has the goal of converting to 25% organic by 2050, while the United States’s organic transition initiative is a US$300m (about $484m) fund offered through the US department of agriculture for organic transition.

NZ passed the Organic Products Act this year, and Tompkins said the hope is it will provide a framework for NZ to make up lost ground on organics’ profile, research and critical mass.

The report points out that the EU’s definition of organics fails to include a requirement on the inclusion of indigenous values and knowledge. It highlights the risk in the fact that the iwi organic verification system developed by Te Waka Kai Ora for Māori growers is excluded from the national organic standard.

The Green Deal’s potential to reach even further into NZ’s exports could be realised in later years through its carbon border adjustments, which aim to price carbon contained in a product and apply tariffs accordingly. 

At this stage it does not include food or beverages, but that has not been ruled out in the future. 

A “greenwashing ban” also promises to tighten up on claims made about sustainability, and this is likely to be backed up with a sustainability labelling scheme applying to all products sold there.  

Parameters will include water quality, soil impact, air quality, biodiversity and climate change mitigation.

Tompkins said this will also include a circular economy requirement, particularly around the use of plastics.

“We have already seen this with their requirement for standardised cell phone and computer cords. They do not want the waste.”

The Our Land and Water report can be read here

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