New Zealand is part of the worldwide effort to reduce greenhouse gas emissions and limit global average temperature increase to 1.5°C above pre-industrial levels, so we can avoid the worst effects of climate change.
To achieve this, every sector – including agriculture – has a part to play.
Last year, the Government asked the Interim Climate Change Committee (ICCC) to look into options to reduce agricultural emissions. We have used the ICCC’s recommendations, as well as conversations with leaders in the agriculture sector, to put together some proposed ways forward.
We propose putting a price on agricultural emissions at farm level from 2025. There are also two options for managing emissions in the interim. These options are to put a price on emissions at processor level, or establish a formal sector-government agreement.
How to review our proposals and submit feedback
The 'Action on agricultural emissions’ discussion document sets out our proposals.
The consultation closed on 13 August at 5pm.
Key findings from submissions will help inform final decisions on the proposed policies.
The ICCC report
Last year, the Government asked the Interim Climate Change Committee (ICCC) to look into options to reduce agricultural emissions.
The ICCC has provided a report that details:
- evidence, analysis and recommended options for reducing agricultural emissions
- the issues involved and the common themes highlighted through engagement by the ICCC on its analysis and recommendations.
The Agriculture Sector Leaders Proposal
The Government has received a proposal from leaders of the agriculture sector setting out a five-year programme of action to address agricultural emissions.
This is described in the discussion document as Interim Option 2: a formal sector-government agreement.
We held public information sessions around the country.
|Tauranga||22nd July||5:30pm - 7:30pm|| |
9 Willow Street, Tauranga
|5:30pm - 7:30pm|| |
474 Maunu Road, Whangarei
|Christchurch||24th July||5:30pm - 7:30pm|| |
50 Park Terrace, Christchurch
|10am - 12pm|| |
Ashburton Events Centre
211a Wills Street, Ashburton
|Lake Karapiro||26th July||1pm - 3pm|| |
Lake Karapiro Event Centre & Accommodation
601 Maungatautari Rd, Leamington, Karapiro
|Hawera||29th July||10am - 12pm|| |
Camberwell Road, Hawera
|New Plymouth||29th July||5:30pm - 7:30pm|| |
92-100 Devon Street West, New Plymouth
|Napier||30th July||10am - 12pm|| |
Napier Conference Centre
48 Marine Parade, Bluff Hill, Napier
|Gisborne||31st July||10am - 12pm|| |
The White House
69 Peel Street, Gisborne
|Wellington||31st July||5:30pm - 7:30pm|| |
147 The Terrace, Wellington
|Invercargill||1st August||5:30pm - 7:30pm||Ascot Park Hotel |
Cnr Tay St and Racecourse Rd
|Greymouth||2nd August||5:30pm - 7:30pm|| |
Welshman Conference Centre, Shantytown Heritage Park
316 Rutherglen Road, Paroa, Greymouth
|Carterton||5th August||10am - 12pm|| |
Carterton Events Centre
50 Holloway Street, Carterton
|Palmerston North||5th August||5:30pm - 7:30pm|| |
Palmerston North Conference & Venue Centre
354 Main Street, Palmerston North
|Auckland||6th August||5:30pm - 7:30pm|| |
Level 4/205 Queen Street, Auckland
|Nelson||7th August||10am - 12pm|| |
27 Nile Street West, Nelson
|Webinar||8th August||7pm - 9pm||Online: Register here|
|Dunedin||9th August||1 - 3pm||Dunedin Town Hall (Conference Room 2)|
How were the proposed policies developed?
- In April 2018, the independent Interim Climate Change Committee (ICCC) was established by the Minister for Climate Change and tasked with looking at options for reducing emissions from agriculture, including whether/how these emissions could be priced under the NZ Emissions Trading Scheme (NZ ETS). The Committee also looked at options outside the NZ ETS.
- The ICCC talked with a wide range of stakeholders (including those from the agricultural sector, rural communities and iwi/Māori) and completed in-house analysis and commissioned work from consultants. They provided their advice to Ministers on 30 April 2019.
- The Government carefully considered all of the recommendations and has agreed in principle with all of the ICCC’s report. The Government has proposed policies building on these recommendations.
- After the ICCC’s report was received, the government also received a proposal from agriculture sector leaders to take a different approach that worked more directly with the sector. This options has been included in the consultation.
- We are now seeking feedback from New Zealanders on these proposals before making final decisions on policies to be presented to Parliament.
When is it likely that a price on livestock emissions at the farm level would be introduced?
- This is proposed to begin from 2025, once the necessary tools and systems for measuring and reducing emissions are in place.
- There will be a report to Ministers in 2022 on further detail of the farm-level pricing scheme including:
- What type of pricing scheme (eg, NZ ETS or levy rebate scheme)
- What method of free allocation should be used
- How methane could be treated differently.
- The report will also consider the feasibility of a farm-level scheme. If this is not deemed feasible, emissions would be priced at the processor level.
How will farm emissions be measured or calculated?
- This is something the government would work on with scientists, farmers and other experts as the approach for farm-level reporting and pricing scheme is developed.
- In the meantime, farmers can use Overseer, the Ministry for the Environment’s Measuring Emissions Guide and the Lincoln University Farm Carbon Footprint Calculator to estimate their emissions – these are estimates using data from the farm such as inputs of feed, fertiliser, stock numbers etc.
Will the Government look at recognising a broader range of on-farm vegetation under the NZ Emissions Trading Scheme (NZ ETS)?
- As part of work toward developing a farm-level pricing scheme in 2025, the Government will consider options for how on-farm vegetation that is not currently eligible for emissions units under the NZ ETS could be recognised.
- Non ETS-eligible vegetation includes native vegetation, riparian strips, small woodlots, pole-planting of trees and forests planted prior to 1990.
- A number of types of on-farm vegetation and plantings are already eligible for existing government schemes, including the NZ ETS and grants available through the One Billion Trees programme.
- Farmers should talk to a rural consultant who is knowledgeable in this area about their options through the NZ ETS or One Billion Trees grants. Industry organisations such as DairyNZ and Beef+Lamb will be able to advise who to talk to.
What are the likely costs to farmers of being in an emissions scheme?
- The government has committed that if agricultural emissions are to be part of a scheme with financial obligations linked to emissions, then farmers would only pay for 5% of their emissions initially, as 95% of their emissions units would not be priced (this is called ‘free allocation’).
- If agricultural emissions were included in the NZ ETS today, at the current price of around $25 per tonne and with 95% free allocation of units, it would be expected to cost farmers on average 1 cent per kg of milk solids, 1 cent per kg of beef, 4 cents per kg of venison and 3 cents per kg of sheep meat.
- The cost of emissions varies by animal because it depends on the amount of emissions produced to yield one kg of product (i.e. meat or milk). The emissions are calculated over the lifetime of each animal, divided by the amount of product that animal yields. So the figure for milk solids (1c/kg) is lower than for sheep meat (3c/kg), as although a dairy cow is larger and produces more emissions, it yields much more product over its lifetime than a sheep. Similarly, beef cattle produce more emissions than a sheep, but yield much more meat when slaughtered. Hence the figure for beef is lower at 1c/kg, than for sheep meat.
Wouldn’t applying a price on agricultural emissions lead to business moving their production overseas?
- The Interim Climate Change Committee found the risk of production shifting overseas to avoid the costs of offsetting emissions appears to be low in the near term. Providing an allocation of 95% free emissions units initially means that the costs on the agriculture sector should be modest.
- We expect to see the continuing efforts of New Zealand producer/sector bodies to differentiate our products on quality and environmental sustainability.
How do these proposals relate to the Government’s Zero Carbon Amendment Bill?
- The Zero Carbon Amendment Bill, which was widely consulted on last year and is currently before the Environment Select Committee, will set the framework for New Zealand’s transition to a low-emissions and climate-resilient economy.
- The Bill proposes new greenhouse gas emissions reduction targets to reduce:
- all greenhouse gases except methane from agriculture to net zero by 2050
- methane emissions within the range of 24–47% below 2017 levels by 2050, including to 10% below 2017 levels by 2030.
- The proposals in this consultation will help New Zealand achieve methane and nitrous oxide emissions reductions needed to meet the Bill’s new 2050 target (once it is agreed).
- For further information on the Bill see Climate Change Response (Zero Carbon) Amendment Bill.
What are the tools and systems that are needed to implement an emissions pricing scheme at farm level?
Implementing an emissions price at farm level would require:
- the development of tools and advice for farmers to enable them to respond to an emissions price at farm level, in particular:
- building the capability of farmers and farm advisers
- developing a climate change module in farm environment plans
- supporting farmers to take early action to reduce emissions - including specific programmes to meet the needs of Māori land owners
- supporting ongoing research and development to expand the range of mitigation options available.
- the development of an emissions measure or calculation tool
- the development of a method for allocating ‘free’ emissions units (‘free allocation’)
- a system built to administer the scheme and register farmers in the scheme
- a compliance scheme to be set up
- the Climate Change Response Act amended to include start dates for farm level pricing and voluntary and mandatory reporting of farm level emissions.
Can farmers offset their emissions through soil carbon?
- Currently farmers are not able to offset their emissions through soil carbon.
- New Zealand’s soil carbon content is relatively high, so the ability of our soil to store more carbon may be limited and soil carbon can be quickly lost through events outside of people’s control like floods and droughts.
- New Zealand researchers are further exploring how farm practices and climate can change soil carbon stocks and whether it is possible to accurately account for changes on individual farms.
Can farmers offset their methane emissions with forestry planting through the Emissions Trading Scheme?
- In moving to a farm-level pricing scheme by 2025, the Government is committing to work with the agriculture sector to ensure farmers are recognised for their positive actions to reduce emissions on their land, including the trees they plant.
- The target for biogenic methane proposed in the Zero Carbon Amendment Bill is for a gross reduction in biogenic methane emissions. This means that, at a national level, offsets from tree planting or other removals would not be able to be counted towards the biogenic methane target.
- Decisions on how the target and emissions budgets are translated into policy to incentivise emissions reductions have yet to be taken.
- However, if agricultural emissions were to face an emissions price, under current NZ ETS settings the liability for those emissions could be ‘offset’ by earning carbon credits through the NZ ETS for on-farm carbon sequestration from eligible forests.
What can farmers do to reduce agricultural emissions?
- Joint Government/sector research found there are a number of actions that farmers can take to reduce their on-farm emissions and that farms can potentially maintain profitability if improved farm management practices are put in place. These include:
- increasing the productivity of animals (e.g. through improved reproduction), so fewer stock are needed to yield the same amount of product
- standing stock off pasture in winter if possible
- using nitrogen fertiliser more efficiently, so less is used (i.e. using the right product in the right amount, in the right place at the right time)
- managing pasture to ensure grass feed is optimised (rather than bringing in other types of feed supplements which produce more methane)
- using low-protein supplementary feeds, if additional feed is needed
- increasing farm forestry.
- Farmers can also sequester carbon, and be rewarded for it, through on-farm forestry that is eligible under the NZ Emissions Trading Scheme.
- These changes together could potentially reduce emissions by 5-10% for an average farm while maintaining production. However, all farms are different (e.g. their land, farm type, geology/topography, weather, distance from processors) and all farmers are different. It is important farmers get tailored advice about what would work for them and what impacts changes would have on their farm’s profitability.
- There are other technologies under development that could be available in New Zealand soon, including methane inhibitors and nitrification inhibitors.
What is the government doing to support farmers to reduce their emissions?
- Over the past ten years, MPI Investment Programmes have provided funding support of around $462 million related to sustainable agricultural initiatives. This includes $378 million to fund innovation to grow value and improve sustainability and just over $83 million for climate change research on adaptation, mitigation and support/development services.
- The Productive and Sustainable Land Use Package – of $229 million over four years - will help us tackle the environmental issues New Zealanders care about and at the same time support the primary sector cornerstone of our economy to increase the value from our exports. Of this, $122 million over five years will be used to provide information, tools and on-the-ground advice to support farmers and Māori agribusinesses, as well as improve on-farm emissions data.
- For more information on this Budget package, visit the Beehive webpage.
- We have been continuing to work with industry to address agricultural emissions. For example, in 2018 the Biological Emissions Reference Group (made up of industry and government representatives) released a report exploring what the agricultural sector can do now, and in the future, to reduce on-farm emissions as well as assess the costs and opportunities of doing so.
- Meanwhile MPI is supporting primary industries, including farmers, to meet environmental objectives through a range of projects, programmes and initiatives.
- We are also working closely with a range of agencies to build resilience and preparedness in rural communities’ ahead of climatic events.
How do New Zealand’s emissions compare with other countries?
- We contribute about 0.17% of the world’s emissions, but have the 7th highest level of emissions on a per capita basis.
- We rank 24th in emissions among our peer countries (Annex I) for total emissions.
- Biological emissions from agriculture make up nearly half New Zealand’s greenhouse gas emissions, which is unusual among developed countries.
- About 70% of our agricultural emissions is methane from cows (burping it out in the digestion process); the rest is nitrous oxide from livestock urine and fertiliser application.
- Between 1990 and 2017, New Zealand’s total emissions increased by 23%.
- Since 1990, emissions from agriculture have increased by 13.5% but have stabilised in the last four years.
- For more information on New Zealand’s greenhouse gas emissions see State of our atmosphere and climate.
The Interim Climate Change Committee (ICCC) is an independent ministerial advisory group that looked into how best to manage reducing emissions from agriculture (including the option for these emissions to enter the New Zealand Emissions Trading Scheme).
The ICCC commissioned technical reports, and engaged broadly with farmers and growers from around the country, primary sector organisations, Māori land owners, foresters, NGOs and bankers, to develop its recommendations. We have used these reports and recommendations to help put together our policy proposals – see our Discussion Document for more information.
BERG members included representatives from agricultural sector organisations and government agencies. Their final report, and background reports, cover:
- Opportunities to reduce biological greenhouse gas emissions (methane and nitrous oxide) from New Zealand agriculture
- The costs and benefits of these opportunities and any barriers to their use.
The NZAGRC was created to build on existing research, working with existing organisations to create an effective, trusted partnership to bring cost-effective, simple solutions to New Zealand farms, and contribute world leading results to the international science community. The linked brochure reports on the modelling work done over four years on a range of dairy, sheep and beef farms, as part of a number of projects, including for the NZAGRC. It also discusses forestry as a carbon sink and possible costs to farmers. There is also a range of other research and information available on the website.
Modelling of agricultural climate change mitigation policy scenarios - report to come
This report is being prepared by Manaaki Whenua Landcare Research. We have used the initial results to help understand the possible impacts of our policy proposals on farmers and on greenhouse gas emissions – see our Discussion Document for more information. At the time of writing, the report is still being completed, so the final results may change. We expect to be able to make the final report available soon.