DairyNZ is one of 11 primary sector and Māori farming organisations involved in HWEN, which today released its recommendations report outlining a credible pricing system, as an alternative to the NZ Emissions Trading Scheme (ETS).
“The HWEN partnership is recommending a farm-level split-gas levy with built-in incentives to reduce emissions and sequester carbon, starting from 2025. It’s a win-win that will achieve the best outcomes for farmers and New Zealand,” says DairyNZ chairman Jim van der Poel.
“As a sector we fought really hard for this opportunity to develop a better solution after the Government passed legislation to say it would put agriculture into the NZ ETS.
“Unlike the ETS, the HWEN system will actually reduce emissions, and will recognise and incentivise on-farm actions. It will invest in R&D to find new solutions, building on the already significant primary sector investment – including by dairy farmers, via DairyNZ.”
The HWEN system is expected to reduce methane emissions by between 4 to 5.5 percent. Alongside other actions underway to reduce emissions, HWEN would help achieve methane emission reductions of 10 percent, in line with the legislated reduction target.
“Crucially, the He Waka Eke Noa system would enable farmers to continue running successful businesses, which means we continue contributing to our families, the economy and local communities,” says Mr van der Poel.
“A collaborative governance structure will give our sector representation in levy price setting, where the goal will be prices kept as low as possible while still meeting our commitments, and adjusted as needed.”
Special thanks must go to the thousands of farmers who engaged with the process and gave robust feedback during the roadshow meetings, says Mr van der Poel.
“We have a stronger proposal as a result and we hope our farmers can see that feedback reflected in the final recommendation report. In He Wake Eke Noa, our entire primary sector has come together in a way we have never seen before. This is what farmers expect to see.”
HWEN takes a split-gas approach, which farmers asked for. It will apply different levy rates to short- and long-lived gas emissions recognising that methane, as a short-lived gas, has a different warming impact than long-lived gases such as carbon dioxide. Unlike CO2, methane only needs to reduce and stabilise, rather than go to net zero.
“We believe the system is credible, robust, delivers on farmer feedback and meets the Government’s environmental outcomes,” says Mr van der Poel.
Farm-level reporting will give farmers more control of their farm businesses and more choice in how on-farm emissions are managed. A wider range of on-farm sequestration will be recognised than the ETS. And there is an option for early adopters to be recognised for sequestration established pre-2008, if adequate evidence is provided.
“New Zealand dairy already has the world’s lowest carbon footprint for on-farm milk production. We want to maintain that competitive advantage to meet changing consumer demand, community expectations and farmers’ own environmental aspirations,” says Mr Van der Poel.
“Pricing under HWEN doesn’t start till 2025, so we have time as a sector to prepare.”
The Government will now consider the He Waka Eke Noa recommendations report and is expected to release their final proposed agricultural emissions pricing design for public consultation in August.
“That’s another opportunity for dairy farmers to have a say and we’ll keep speaking up actively on their behalf. It's vital we have a system that works. That’s why we’re working so hard to get this right,” says Mr van der Poel.
- More than 2600 dairy farmers and sheep and beef farmers attended 71 HWEN events hosted by DairyNZ and Beef + Lamb New Zealand (55 in-person events and 16 online meetings)
- 99% of farmers told us they didn’t want ag priced through the ETS.
- 86% supported farm-level pricing as the final outcome of HWEN.
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