He Waka Eke Noa emissions pricing consultation

The He Waka Eke Noa partners – including B+LNZ – developed two emissions pricing options as alternatives to bringing agriculture into the Emissions Trading Scheme (ETS) and consulted farmers on these options.

This consultation informed the recommendations that went to Government. 

Last updated 19 November 2022

The Government’s consultation on its response to the He Waka Eke Noa Primary Sector Climate Action Partnership proposal on the pricing of agricultural emissions has now finished. Information on the Government’s consultation is available on the MfE website. You can also read more about B+LNZ’s views on the Government’s proposal, and how we supported farmers, on this webpage.

In September we developed an ‘explainer’ that outlines B+LNZ’s positions and addresses some common questions and misconceptions, in response to concerns about what the He Waka Eke Noa partnership had recommended to Government. Find it here (PDF, 782 KB). 

This page outlines the outcome of farmer consultation, as part of developing the He Waka Eke Noa partnership proposal, undertaken in February and March 2022.

Background to the consultation follows below.

The He Waka Eke Noa partnership delivered its recommendations to the Government on an agricultural emissions pricing system as an alternative to the ETS on 31 May and released the report publicly on 8 June.

The recommendation, which was influenced by the consultation with farmers undertaken in February and March, is for a farm-level levy on agricultural emissions with built-in incentives to reduce emissions and sequester carbon.

The Government will now decide whether it will accept this recommendation.

To find out more about what has been recommended, what changes were made to the recommendations as a result of farmer feedback, and what this means for farmers now, see the email we sent to farmers on 8 June.

Key information on the recommendations:

B+LNZ has also released additional analysis we undertook to inform the recommendations, focusing on the financial implications of what was proposed. This modelling reinforces the need to take a cautious approach on the prices applied to agricultural emissions, which B+LNZ will continue to push hard for. Find the modelling here (PDF, 1.36MB). 

Many farmers are keen to work out potential on-farm emissions costs based on the modelled pricing, but thre has been some confusion about how to use the information in existing tools. B+LNZ has therefore developed a factsheet setting out how to use B+LNZ’s GHG Calculator, Overseer and FARMAX to work out potential costs for short- and long-lived gas emissions. Find the factsheet here (PDF,974 KB).

Background  information: where did this come from?

In 2019, following the passage of the Zero Carbon Act the Government consulted on bringing agriculture into the Emissions Trading Scheme (ETS). The agricultural sector, working together, convinced the Government not to do this and to work with the sector and iwi on an alternative approach for managing our emissions – through the He Waka Eke Noa partnership – with a view to introducing the framework in 2025.  

However, the Government made it clear that if we did not meet certain milestones, it would bring agriculture immediately into the ETS. There is already legislation in place that would allow it to do this – the ‘ETS backstop’.   

Learn more about He Waka Eke Noa.

What was released for consultation?

The partners in He Waka Eke Noa (including the Government) have developed two alternative options to the ETS. Farmers are being asked for their feedback – this feedback will inform the advice the partnership provides to the Government.

You can read a summary of the options in this booklet we developed with DairyNZ (PDF, 11.7MB). This is an updated version of the booklet that was mailed to farmers in December.

The formal consultation materials released by the partnership consist of:

The options were discussed in more detail, and farmer feedback was invited, at DairyNZ/B+LNZ roadshow events in February and March – at 30 physical locations around New Zealand and online via 6 national webinars, 15 regionally-focused webinars and further online meetings.

What are we trying to achieve? 

B+LNZ has worked to try and come up with a better system for agriculture that seeks to fairly treat different types of farming systems and the different stages of farmers in their development, as well as working for other sectors. We have been part of this process with other agricultural organisations, including DairyNZ and Federated Farmers, and the Government and iwi.

Our key priorities have been: 

  • de-linking the methane price from the carbon price (to reflect the separate greenhouse gas targets in the Zero Carbon Act)
  • getting more recognition of the sequestration happening on farms than currently under the ETS
  • the ability for farmers to be recognised for progress on reducing their warming impact, and
  • money raised being invested back to agricultural research or on-farm changes that reduce emissions.

Our vision is to establish a framework that is separate for agricultural emissions from the ETS and which can be evolved and improved over time.  

While they’re not perfect, we believe the alternative emissions pricing options have advantages over the ETS for sheep, beef and dairy farmers. We believe they provide farmers with a lot more control and options to reduce the costs they face over time, either through getting their on-farm actions recognised or through better recognition of their sequestration. 

The proposals are a starting point and will evolve as science, measurement and technology allow more accurate recognition of what’s happening on individual farms. 

How does this process relate to the methane reduction targets? 

New Zealand is the only country into the world to have taken a split gas approach to methane emissions, through the Zero Carbon Act. B+LNZ does not agree that the methane targets in the Act are justified based on the science around methane’s impact on warming.  

However we can’t change the targets through He Waka Eke Noa and this is a separate process. There will be a review of the targets in 2024 and we are committed to working with Federated Farmers, DairyNZ and others to get the targets reviewed using the latest science. 

Our overall vision is to come up with an agricultural specific framework through He Waka Eke Noa and get the methane targets successfully reviewed in 2024, so that by 2025 when the He Waka Eke Noa framework comes into effect we have the fundamental building blocks in place for a fair system for agriculture. 

It’s important to note that if we’re unable to reach agreement on a pricing framework and agriculture goes into the ETS, in effect we will have lost the split gas outcome and it won’t matter what the targets are as the methane price will simply be linked to a rapidly-increasing carbon price.  

Background resources