DairyNZ chair Jim van der Poel says what the Government has come back with is more closely aligned with what the sector proposed earlier this year – but the devil will always be in the detail and industry will be working constructively to get clarity around that and the changes, where necessary.

“Farmers are already facing huge cost pressures with rising interest rates and on-farm inflation driven by feed, fuel and chemical prices. Emissions pricing is going to add yet another cost, so it's important we continue work to achieve emissions reductions in a fair, practical and equitable way,” says Mr van der Poel.

“Throughout this entire process, DairyNZ has maintained that ‘no deal is better than a bad deal’ and we would never accept an emissions pricing system that would put our farmers or rural communities at risk – and we stand by that.”

Changes to the Government’s emissions pricing plan include confirmation the price will be set at the lowest rate needed and fixed for five years to give farmers certainty, and better recognition for on-farm planting. Farmers will also be able to manage and report their emissions as collectives.

“The changes are a direct result of strong sector advocacy and shows what can be achieved when we all stay at the table and work through the tough issues together in a constructive way,” says Mr van der Poel.

“We are pleased the Government has listened to concerns from farmers and the rural community during the consultation period. I want to acknowledge that feedback has been taken on board and changes have been made.

“Although we have made good progress, there are still a number of issues we want to continue to work through with the Government, including legislative timelines, the retention of a processor-level backstop and the reduced role of the oversight body from what we understood had been agreed.

DairyNZ chair Jim van der Poel.

“DairyNZ has real concerns that, because of delays in the process, there will not be enough time to implement the scheme before the Government’s intended start date of January 1, 2025, and that, as a result, farmers may end up in a processor-level system through no fault of their own,” says Mr van der Poel.

“We are also extremely disappointed to see the role of the oversight body has been significantly reduced, with advice to be provided to the Climate Change Commission, not directly to the minister, for consideration. This, in our view, is a key issue we will continue to work on.”

Government has also confirmed the Climate Change Commission will be required to consider scientific developments such as GWP* (an advanced metric for measuring methane emissions) when it reviews emissions reduction targets in 2024.

DairyNZ welcomes this news, as it has previously called on the Government to use the latest and best science when setting methane targets. The current metric overstates the warming impact of methane emissions by three to four times when emissions are stable, as they are in New Zealand.

The Government has legislated to put agriculture into the Emissions Trading Scheme (ETS) but agreed to work with the sector on finding a better alternative. Earlier this year the primary sector partnership delivered recommendations to the Government that would actually reduce emissions and recognise and incentivise on-farm actions, including sequestration. It also would drive investment in research and development, to find new solutions.

New Zealand is committed to reducing emissions through being signed up to the Paris Agreement, which aims to limit global warming well below 2 degrees Celsius, preferably below 1.5 degrees Celsius.

“DairyNZ will continue to advocate strongly on behalf of farmers and rural communities to resolve these issues and ensure the Government’s high-level direction aligns with the detail, when we see it early next year,” says Mr van der Poel.

Media contact
Justine McLeary
Senior media specialist
027 808 0673

Page last updated:

21 Dec 2022


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