Agricultural emissions trading system delay: Government accused of jeopardizing New Zealand’s competitive advantage in foreign markets

Labor agriculture spokeswoman Jo Luxton said market access for agricultural exports was at risk following the government’s latest ETS decision.

The alliance has confirmed It would exclude agriculture from the Emissions Trading System (ETS).

The government is scrapping the industry-led “He Waka Eke Noa” panel and establishing a new livestock sector panel to “constructively address” the biomethane issue.

The government will amend the Climate Change Response Act to exclude agriculture, animal processors and fertiliser companies from the emissions trading system from 2025.

The Federation of Farmers’ Union, Beef and Lamb New Zealand and Dairy New Zealand all welcomed the decision, however, Labour and the Greens were critical of it.

Labour said the government was doing everything it could to delay climate action by deciding to start years of work on reducing agricultural emissions from scratch.

Luxton said the longer it takes to decarbonize the economy, the higher the costs will be and the greater the damage to agriculture and industry will be.

“This puts market access for our agricultural products at risk.”

She said the previous government had secured seven new and upgraded trade deals, however the country needed to “maintain a leading position in exports of clean, green, low-emission products” to take full advantage of those opportunities.

“Overseas buyers want sustainably produced products and our primary producers rely on those markets. National is taking New Zealand backwards on climate action and this is jeopardising our competitive advantage.”

She said the government needed to be clear on how it would achieve net zero emissions by 2050.

Green Party co-leader Chlöe Swarbrick said the government was in denial about its climate responsibility.

She said the government had again delayed progress on climate action by excluding agricultural emissions from the emissions trading system.

“Climate delay is the new denial. The government’s announcement today that it will undermine progress on agricultural emissions pricing is just the latest display of indifference to our climate and environment,” she said.

She accused Agriculture Secretary Todd McCrea of ​​being out of touch with reality by claiming the state can still meet its climate change commitments.

“From pouring oil, coal and gas into the fire of the climate crisis, the government has now added half of our emissions from agriculture to the industry-led ‘excessive’ category.

“At the same time, farmers are among the first and hardest hit by climate change.”

Swarbrick said the scientific evidence clearly shows we need to reduce methane emissions.

“Fair pricing is a key way to achieve this, putting the industry on an equal footing with the rest of our economy.”

Greenpeace New Zealand said there was no significant loss in the dumping of He Waka Eke Noa, but the establishment of a livestock group said another thing.

Spokeswoman Niamh O’Flynn said both measures were designed by the dairy industry to delay climate action.

“The dairy industry is New Zealand’s largest climate polluter and successive governments have failed to take any action to limit its emissions.

“Allowing dairy and agribusiness to continue to evade emissions responsibility through the ETS will only mean that the rest of us, including other industries, will pay the price through increased costs and increased climate disasters and freshwater pollution.”

Meanwhile, ACT said the statement recognised farmers were the “backbone of our economy”.

“Under Labour and the Greens, farmers have been sacrificed to the climate gods,” said Mark Cameron, the party’s rural communities spokesman.

He said the country could meet its emissions obligations “without harming the productive potential of rural New Zealand”.

“We will continue to pursue a split approach for methane and CO2 and review the science and targets for methane through 2050. We will ensure farmers can offset their emissions responsibilities with carbon sequestered on their farms.

“True environmentalists would support this approach because it would prevent production from moving to more carbon-intensive countries.”

Industry groups welcomed the decision

The New Zealand Beef and Lamb Producers Organisation said it was pleased to see agriculture removed from the emissions trading system.

Chair Kate Acland said the group had always argued that including agriculture in the ETS would be disastrous, while removing it would provide certainty.

Akram also welcomed the formal disbanding of the He Waka Eke Noa Primary Sector Climate Action Partnership.

“While we prepare to join a new group discussing how to manage emissions from New Zealand agriculture, any engagement will be fully transparent and involve discussions with our farmers. We will not allow this to become a duplication of the He Waka Eke Noa process,” she said.

She said putting a price on agricultural emissions would not achieve emissions reductions, and that reductions in agricultural emissions were already happening faster than needed.

“The significant decline in livestock numbers over the past few years, thanks to reforestation, means our industry is likely to exceed the current target of reducing methane emissions by 10% by 2030.

“Based on that, there is absolutely no reason to raise prices. For our farmers, it is non-negotiable.”

“Our view is that we should focus on the outcome we are trying to achieve – agricultural emissions management – ​​and be open to solutions and different ways of achieving that.”

Sheep and cattle farmers have reduced their absolute emissions by more than 30 per cent since 1990, and offset a large part of their remaining emissions through trees and native vegetation on their farms. She said recent analysis by AgResearch showed sheep farming had “no impact on climate warming”.

Federated Farmers president Wayne Langford said the previous government was too focused on pricing farmers and blindly pursued unachievable, politicized and unscientific methane reduction targets.

“They are completely ignoring the huge and unjustifiable costs this plan will impose on hardworking farming families and the New Zealand economy as a whole.”

Mr Langford said United Farmers would never accept a plan where 20 per cent of sheep and beef farms, and 5 per cent of dairy farmers, were priced out of business.

The bottom line for federal farmers is that methane targets will be reviewed; providing farmers with tools that are feasible and cost-effective, and that do not result in emissions leakage.

“The government’s announcement today gives us confidence for the future,” Langford said.

DairyNZ chairman Jim van der Poel said the announcement was positive given the uncertainty facing dairy farmers.

If the previous government had continued with this policy, milk production would have shifted to less efficient overseas producers. This would have hurt farmers and the economy, and led to an increase in global emissions.

He said any path forward must be based on science.

“While there is currently no significant technology to reduce methane emissions from New Zealand pastures, our farmers continue to make great progress in measuring emissions on their farms and we look forward to contributing to the Government’s methane reduction efforts.”

DairyNZ will continue to work on developing cost-effective on-farm emissions reduction tools and technologies, “including testing methane-reducing compounds and delivery options for our pastures, and exploring low-emission feed and genetic technologies”.

The government has previously said it would introduce a fair, practical pricing system by 2030.

“As an industry we need clarity on targets and how pricing mechanisms will work with appropriate timeframes and incentives, and how to choose practical solutions that work on farms, before any emissions pricing system can work,” van der Pol said.