What are we doing?
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’.
The partnership needs to provide advice to the Government by the end of April 2022 on an alternative framework.
Learn more about He Waka Eke Noa.
What has been released?
The partners in He Waka Eke Noa (including the Government) have developed two alternative options to the ETS.
A high-level explanation of these options has been released, along with an outline of what the ETS backstop would look like.
Information is being made available now, so you have time to understand what’s being considered, how the options work and how they compare. There will be a full formal consultation process in February where you can provide feedback (more detailed information will be released in late January ahead of this).
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.
In the lead-up to Christmas: We’re undertaking targeted engagement with the B+LNZ Farmer Councillors and Māori farmers to get guidance on what needs to be developed further in the proposals.
February 2022: All farmers will have a chance to have their say on the pricing options, through a formal engagement process – B+LNZ, DairyNZ and Federated Farmers will be running a roadshow around New Zealand to get farmer feedback and answer questions and there will also be an opportunity to provide feedback online.
April 2022: Farmer feedback will inform the recommendations He Waka Eke Noa partners provide to the Government about pricing. The Government will consider this advice and farmers will then likely get a further opportunity to provide feedback on pricing as part of further public consultation before the final framework is put in place in 2025.