Government emissions pricing report moving in the right direction

December 21, 2022

He Waka Eke Noa partners who jointly submitted on emissions pricing say the Section 215 report the Government released today is moving in the right direction on the pricing system, while noting there is still work to do on the detail.

These partners welcome the Government’s willingness to engage with them in recent weeks to work through their concerns about the Government’s pricing proposal.   

Partners note the Government’s commitment to designing a system that is practical to implement and “with a view to maintaining a viable and productive agriculture sector” and will look for this to be carried through into legislation and implementation.  

“This is a high-level, direction-setting report and does not have all the detail farmers and growers will need, but it is an important milestone” says He Waka Eke Noa Independent Chair Sarah Paterson.

“It confirms that He Waka Eke Noa has been successful in putting the case for a farm-level split-gas levy instead of including agriculture in the New Zealand Emissions Trading Scheme (NZ ETS).

“It shows the Government is listening to sector and Māori views and is taking action to address concerns. This shows the value of working together.”

Significant improvements from the Government’s pricing proposal include:

• recognition that methane and nitrous oxide levy prices should be ‘the lowest possible to achieve outcomes’ and fixed for a five-year period to give farmers certainty
• agreement to take social, cultural and economic impacts into account when setting the prices 
• commitment in principle to recognise all categories of sequestration and to work together to see that implemented first under He Waka Eke Noa and ultimately the NZ ETS.  

Areas the partners will continue to focus on include:

• ensuring there is a balanced approach to price setting, as there is no support for an approach which drives for emissions reductions at any cost
• ensuring the advice of the Oversight Board on pricing is given adequate weight alongside Climate Change Commission advice
• ensuring the farm-level system is up and running by 2025 as partners do not support the introduction of an interim processor-level levy. 

While not part of the emissions pricing system, partners are also pleased to see a commitment from Government to review targets based on the latest science including GWP* and to respond with urgency to the perverse outcomes occurring in rural areas as a result of current NZ ETS carbon prices and associated policy settings. 

“The primary sector and Māori agribusiness are taking responsibility for managing and mitigating our climate impact.” 

“Our farmers and growers are at the front line of dealing with the consequences of a changing climate, such as droughts and floods, and we have a part to play in global efforts to address climate change.” 

The partners who signed the joint submission and have been involved in discussions with the Government are Apiculture New Zealand, Beef + Lamb New Zealand, DairyNZ, Dairy Companies Association of New Zealand, Deer Industry New Zealand, Federation of Māori Authorities, Foundation for Arable Research, Horticulture New Zealand, Irrigation New Zealand and the Meat Industry Association.

For more on partners’ perspectives on the S215 report please read the Initial Assessment document

For further information please contact Janice Rodenburg

email Janice.rodenburg@hewakaekenoa.nz

ph 021 705301