A new agricultural emissions reduction policy approved by the cabinet removes most but not all aspects of an earlier proposal that the primary sector walked away from in June.
Issues raised at the time by the He Waka Eke Noa (HWEN) partnership appear to have been addressed, such as delaying the requirement to report farm-level emissions by almost a year and the pricing of those emissions from late 2025, and the government recognising scientifically validated on-farm sequestration in the Emissions Trading Scheme (ETS).
But a review of methane targets and their impact on global warming – requested by Beef + Lamb New Zealand (BLNZ) and Federated Farmers – is not included.
Agriculture Minister Damien O’Connor said the new proposal is the result of discussions and agreement with farming leaders.
“The decisions announced today set out a path that gives farmers certainty and addresses the ever-strengthening market signals from overseas on climate,” he said.
The policy includes the development of a system to measure emissions and retains the proposal to price emissions at farm level, a split gas approach and greenhouse gas prices, which will not be determined until 2025, set at the lowest level needed to meet reduction targets.
This year’s Budget allocated $15.4 million to continue the development of a system to enable farmers and their advisers to calculate and report agricultural emissions, which is needed to underpin farm-level pricing.
O’Connor said like it or not, the sector has to adapt and reduce its emissions, a fact he said the HWEN partnership acknowledges.
He said the government has listened, is being flexible and is accommodating issues raised by the HWEN partners on timelines and establishing a framework for factors that will determine the farm-level levy price.
“We have shifted farm-level emissions reporting requirements into Quarter 4 of 2024. Emissions pricing won’t start until two years from now in Quarter 4 of 2025, and work will also get underway to allow scientifically validated forms of on-farm sequestration into the ETS, which can help reduce the cost to farmers.”
He said the implementation plan supports farmers’ transition, helps meet the requirements of export customers and works alongside other climate policies.
A policy to defer until later in the year the requirement for farm-level reporting from January 1 next year will be subject to public consultation, which opens today and closes on September 6.
The original agricultural greenhouse gas pricing proposal fell apart earlier this year due to farmer disquiet at changes proposed by the government to what had been agreed to by HWEN.
The partnership said those changes disproportionately affected the meat and wool sector and did not recognise the various forms of on-farm sequestration as extensively as the original proposed.
BLNZ chair Kate Acland said in June that while committed to a partnership, the producer group would not support a system that threatened the viability of sheep and beef farmers or current methane targets without a review based on the science of warming.
It also argued the focus should be establishing an agreed farm-level measuring and a reporting system for emissions with no price set until issues such as sequestration were resolved and viable mitigations were available.
The primary sector partners considered methane targets were too high and did not reflect the latest science on methane’s warming impact.
Dairy NZ chair Jim van der Poel said earlier this year that the HWEN partnership would continue to advocate for a standardised measurement and reporting system, ongoing investment in research and development, education, extension, an equitable pricing mechanism and validation of all forms of sequestration.
Federated Farmers had a similar approach, calling in June for a review of methane targets, forestry rules in the ETS and the net carbon zero target.
The Climate Change Commission has previously called for reform of the ETS and more focus to reduce emissions instead of allowing the planting forestry offsets.
