Agriculture to come out of the ETS

The Government will deliver on its election commitment to take agriculture out of the New Zealand Emissions Trading Scheme (NZ ETS) and will establish a new Pastoral Sector Group to constructively tackle biogenic methane, Coalition Government Agriculture and Climate Change Ministers say.

Agriculture Minister Todd McClay says New Zealand farmers are some of the world’s most carbon-efficient food producers.

“The Government is committed to meeting our climate change obligations without shutting down Kiwi farms. It doesn’t make sense to send jobs and production overseas, while less carbon-efficient countries produce the food the world needs.

“That is why we are focused on finding practical tools and technology for our farmers to reduce their emissions in a way that won’t reduce production or exports.

“Later this month, we will introduce legislation amending the Climate Change Response Act 2002 (the CCRA) to ensure agriculture does not enter the NZ ETS.”

The amendment to the CCRA will remove agriculture, animal processors and fertiliser companies from the ETS before 1 January 2025. For these organisations, their emissions associated with non-farm activities will continue to be covered by the NZ ETS.

“It is now clear that Labour’s He Waka Eke Noa process has failed and is no longer tenable.

“The primary sector worked collaboratively for years, however Labour rejected many of its proposals compromising consensus, relationships, and confidence across rural New Zealand. To restore confidence, Cabinet has decided to formally disestablish He Waka Eke Noa from today.

“It’s time for a fresh start on how we engage with farmers and processors to work on biogenic methane.”

To do this, the Government will engage directly with levy bodies and sector organisations that represent the pastoral sector - DairyNZ, Beef + Lamb New Zealand, Deer Industry New Zealand, Federated Farmers, Dairy Companies Association of New Zealand, and the Meat Industry Association. Terms of reference for the Pasture Sector Group will be developed and agreed with the group,” Mr McClay says.

The Government is investing further in R&D to develop practical tools to help lower on-farm emissions while protecting production.

Climate Change Minister Simon Watts says the Government has committed $400 million over the next four years to accelerate the commercialisation of tools and technology to reduce on-farm emissions.

“As part of our commitment to the sector, we are scaling up funding for the New Zealand Agricultural Greenhouse Gas Research Centre where an additional $50.5 million will be invested over the next five years in projects to find solutions to reduce the sectors emissions. These projects include the development of a methane vaccine; a project to breed lower emissions cattle; and accelerating the work on methane and nitrous oxide inhibitors.

“These investments signal the Governments support for farmers while ensuring New Zealand meets its international climate change obligations,” Mr Watts says.

Associate Minister of Agriculture Andrew Hoggard says it’s critical that our domestic efforts to cut emissions do not harm our local agricultural sector.

“Agriculture is the backbone of our economy and maintaining its profitability is pivotal to boosting our GDP, raising the standard of living, and providing the high-quality public services Kiwis deserve,” Mr Hoggard says.

Associate Minister of Agriculture Mark Patterson says by working closely with the sector we will ensure consumer expectations are met and that we continue to lift New Zealand’s sustainability credentials.

“This Government will future-proof our export growth to ensure the success of dairy and sheep and beef farmers who produce high quality protein, which is sought after by customers all over the world,” Mr Patterson says.

Agriculture Minister Todd McClay says the coalition Government is investing heavily in research and development to provide farmers tools to reduce methane, not productivity.