Climate change legislation
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Over the last 30 years, the New Zealand Government has made International and Domestic commitments to ensure New Zealand reduces its greenhouse gas emissions in line with other developed countries. The Zero Carbon Act sets the reduction targets for all greenhouse gasses as agreed in the nationally determined contribution through the Paris climate accord. DairyNZ is firmly committed to dairy farming playing its part in transitioning to a low- emissions economy alongside the rest of New Zealand. This transition needs to be equitable, fair, and grounded by scientific, economic, social, and cultural considerations.
Current Policies – how they fit together
The Government has wanted to price agricultural emissions since establishing the Emissions Trading Scheme (ETS) in 2008. In 2019, Government passed the Zero Carbon Act and proposed to bring agriculture emissions into the ETS.
What the climate legislation means for you
There are some sector milestones for emissions reporting and farm plans that all of the agriculture has been working to meet. More information on the numbers of dairy farmers meeting the milestones can be found here.
Farm Plans
Dairy processors have been working to have all farm plans to have a written plan in place to measure and manage their greenhouse gas emissions by 1 January 2025.
Your processor should provide your emissions data and for more information on your numbers, visit Know your numbers | Ag Matters.
The He Wake Eke Noa partnership has released updated guidance to help farmers measure, manage and reduce greenhouse gas emissions – this update can replace previous versions.
Farmers and farm consultants can use this guidance to incorporate the management of greenhouse gases into farm planning by:
- Understanding your farm’s emissions profile
- identifying activities that contribute to your farm’s emissions profile
- identifying opportunities that can be explored to reduce emissions, and
- how to keep good farm records.
DairyNZ has some helpful information on how to get started with your Farm Environment Plan and how to link it with Good Management Practice.
History of Ag Emissions Pricing
2018 - Government legislated agricultural emissions to be priced by 2025 through the NZ ETS.
2020 - He Waka Eke Noa Primary Sector Climate Action Partnership was formed.
The agriculture sector, working together with iwi, convinced the Government to work with the sector to develop an alternative framework for managing sector emissions. This partnership is called He Waka Eke Noa.
Saying no to the partnership was not an option.
The Government had written into legislation that agricultural emissions will enter the ETS, if the partnership was not able to come up with a viable alternative option.
If agricultural emissions were to be priced through the NZ ETS it would reduce the control farmers have and result in a broad-based tax that is linked to carbon dioxide and emissions from other industries. Farmers would receive no recognition for any on-farm actions that would reduce emissions or alternative forms of sequestration.
May 2022 - He Waka Eke Noa Partnership delivered its recommendations for pricing agricultural emissions report to Ministers.
The recommendation was a farm level levy that worked to reduce emissions but also
recognise and incentivise on-farm actions, including sequestration. It also would drive investment in research and development, to find new solutions.
It was informed by consultation with farmers from January to March 2022. DairyNZ and Beef and Lamb NZ partnered together to engage with farmers over six weeks, through a series of in-person sessions and online webinars.
The He Waka Eke Noa Partnership report can be found here: Recommendations - He Waka Eke Noa
He Waka Eke Noa has been designed to improve on the ETS in four key ways, it:
· Gives farmers choice and control over how they manage their emissions
· Recognises the different warming impact of methane
· Recognises carbon sequestration from a range of on-farm vegetation not able to be entered in the ETS
· Reinvests revenue raised from the sector back into the agriculture sector.
October 2022 - Government consulted on their pricing proposal
The government proposal was significantly different from the He Waka Eke Noa recommendations. DairyNZ made it clear we do not accept this proposal.
DairyNZ engaged with farmers during the consultation period and made a submission to the Government in November. We recommended they set aside their proposal and fully adopt the original He Waka Eke Noa proposal.
You can view our submission here
December 2022 - Government released a report on the Government’s proposed system to price agricultural emissions.
The report addressed submission feedback and themes and outlines the direction of changes to its emissions pricing plan for agriculture. The report does not represent final decisions that are yet to be made by Cabinet.
Some of DairyNZ’s concerns were addressed but there are important issues that still need to be resolved to address farmer concerns and deliver a fair and practical solution to agricultural emissions pricing.
Important changes for farmers
- Methane and nitrous oxide prices set at the minimum level needed
- Methane and nitrous oxide prices fixed for a 5-year period
- Social, cultural and economic impacts will be considered when setting prices
- Commitment to recognise as many categories of sequestration as possible
- All farmers can report as collective.
Concerns still to be resolved
- Ensuring the voice of the sector is heard, with advice being put from the sector directly to ministers and not the Climate Change Commission.
- Clarity on the starting price, so farmers can calculate their costs.
- Ensuring the farm-level system is up and running by 2025 – DairyNZ does not support the introduction of an interim processor-level levy.
- Shifting the start date for pricing from 1 January 2025 to 1 June 2025.
- Ensuring a robust and detailed strategy for sequestration is delivered.
The Government’s report can be found here.