Wednesday, December 6, 2023

National may have to change ETS legislation to fulfil its ag promise

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The issue is the current government has legislated that agricultural emissions will enter the ETS from January 1, 2025.
Beef + Lamb NZ chief executive Sam McIvor says that if it is proposed that farmers should pay a bill, everybody wants to be confident that, actually, it’s calculating the right figure and a fair figure.
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If National wins the election, it may have to change legislation in order to stick to its promise of not putting agriculture in the emissions trading scheme (ETS).

Earlier this week, National released its Getting Back to Farming document which included 19 different policies.  

At the very end of the document – in the “Key Issues” section – it reiterated that “agriculture will not go into the ETS under National”.

A spokesperson for National said that the party will “release its agriculture emissions policy in due course, but as has been our long-standing policy, we do not believe agriculture should be in the ETS”.

This looks like a bit of a line in the sand. 

The issue here is the current government has legislated that agricultural emissions will enter the ETS from January 1, 2025, if an effective and workable alternative is not put forward. 

Federated Farmers president Andrew Hoggard said there simply isn’t enough time. 

“Given where we are at currently, I can’t see any government being able to stand up in the timeframe remaining an alternative system before January 1, 2025,” he said.

“We’re kind of running up against the wall, quite frankly.” 

Many agree that agriculture shouldn’t be put into the ETS, but under current legislation it is the fallback option. 

If nothing else happens, the bill will apply farm-level surrender obligations on livestock emissions and processor-level surrender obligations on fertiliser emissions in the ETS for emissions from the Jan 1, 2025, deadline.

Mandatory reporting obligations on livestock emissions will apply at farm level for emissions from the year beginning Jan 1, 2024.

A key part of He Waka Eke Noa, a partnership with industry, Māori and government, was to hammer out an alternative farm-level pricing mechanism.  

That process is progressing, albeit slowly.  

In the latest developments, the government released a section 215 report under the Climate Change Response Act, outlining several changes to the proposed agricultural emissions pricing system after a public consultation.  

He Waka Eke Noa industry partners, which jointly submitted on emissions pricing, have said the report is moving in the right direction, while noting there was still work to do on the details. 

The next step is for cabinet to make final policy decisions on agricultural emissions pricing.

It is not clear when this will happen, and time is clearly of the essence. 

Because there is no decision on pricing, it’s not possible to create the necessary system to cope. The numbers are not small. Federated Farmers alone has 13,000 members. 

This is creating a raft of complications, including the fact that another system needs to be created for the ETS in the event it is necessary.  Again, farmers number in the tens of thousands. 

Beef + Lamb NZ is also lobbying for more time.

Chief executive Sam McIvor said the aim is to ensure there is a “really robust system of measurement and reporting”. 

“If it is proposed that farmers should pay a bill, everybody wants to be confident that, actually, it’s calculating the right figure and a fair figure and that’s what you are paying on.” 

He didn’t rule it out happening by Jan 1, 2025.

“Where there’s a will, there’s generally a way,” he said. 

Both McIvor and Hoggard were largely upbeat about National’s announcement although “the devil is in the detail”, McIvor said.

“On the face of it, it is quite a good response to the things we’ve been advocating for with all parties.”

Hoggard pointed to plans to establish a permanent Rural Regulation Review Panel, to consider every local and central government regulation affecting farmers and advise central government on solutions, as being key.

“I think that would make a change,” he said.

If some of the more problematic legislation and change had been looked at early on “before just rushing it into legislation”, it might have stopped some “dumb stuff” before it happened, he said. 

He also pointed to plans to introduce a no-duplication rule.

According to the document, it would mean “the government cannot ask farmers for the same information twice”. 

“It is up to officials to share supplied information where appropriate within the system,” National said.

The only caveat is that it needs to be farmers who grant permission for data to be shared, said Hoggard. “They need to be in the driver’s seat of granting permission.”

Others were not so impressed. 

“National’s plan will take our agriculture sector back decades because its continued export growth depends on our environmental credentials,” said agriculture minister Damien O’Connor.

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