This email was sent to farmers on 21 August 2023.
On Friday afternoon, the Government released its agricultural emissions policy decisions. The timing of the announcement is incredibly frustrating given the significant financial challenges many of us are facing on-farm.
In summary, the Government plan includes:
- mandatory reporting of farm-level emissions beginning in the fourth quarter of 2024
- pricing of emissions starting from the fourth quarter of 2025
- expanding the ETS to include “scientifically validated" sequestration on-farm, with a possible interim system if the ETS is not updated in time.
Our view on the decisions
This is a policy the Government has landed on, not one agreed with sector groups. We were advised of the decisions less than 24 hours before the announcement.
We support the establishment of a practical, cost-effective, sector-wide farm-level measurement and reporting system which will show progress to targets and meet reporting requirements from larger processors and banks. However we have serious concerns about the balance of the plan, and our concerns about equity remain.
B+LNZ’s views are:
- There is no justification for mandatory pricing. The Government’s arbitrary pricing deadline of 2025 ignores the fact that agriculture is already on track to meet the 2030 methane reduction targets.
- There is no commitment to link the recognition of sequestration to the start of pricing. Farmers are being asked to pay for emissions in 2025, but the Government has not set a date by which sequestration will be recognised. That is not acceptable.
- The Government must focus on setting up a practical and cost-effective farm-level measurement and reporting system that works across the primary sector, resolve issues such as sequestration and ensure viable mitigation tools are available before it considers pricing.
- The arbitrary pricing deadline set by the Government ignores the scale of issues that still need to be addressed. From the start, this process has been driven by unrealistic timeframes, which has led to poor outcomes. This needs to stop.
Why the Government needs to think again
New Zealand is the first country in the world looking to price emissions from food production. This comes at a time when food security is topping lists of governments’ concerns internationally and there is no blueprint to guide us.
Given the significance of our economy's ties to food production and exports, it’s critical we take the necessary time to develop a fair and effective approach to reducing emissions.
If we get this wrong, and simply put farmers out of business, less efficient producers around the world will take our place, increasing emissions globally.
New Zealand's livestock producers are amongst the most carbon efficient in the world. Total methane emissions in New Zealand have been stable and even declined over the past decade.
We know many of you are already taking steps to measure and manage your emissions through on-farm planting, increasing efficiencies and, as market demands increase and more mitigations become available, many of you will increase your efforts – a tax will do nothing more than take money away from these on-farm improvements.
We will not give up and will be advocating alongside other sector partners to all political parties, including Labour, in an effort to get better outcomes for farmers.
In parallel we are working with Federated Farmers and DairyNZ on a review of the current methane targets to reflect the latest scientific understanding, and pushing for the reporting of warming in conjunction with emissions. We will release important research on this soon so stay tuned.
Please get in touch with the B+LNZ team or your local farmer director if you have any questions.