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Nationwide roadshows on pricing options for agricultural greenhouse gas emissions

January 31, 2022

Feedback is being sought from farmers, growers and others in the primary sector on options to price agricultural greenhouse gas emissions.

Two options have been released for discussion by He Waka Eke Noa – the Primary Sector Climate Action Partnership – which is a partnership between industry, Māori and government.

The options that the partners will seek feedback on are a farm-level levy and a processor-level hybrid levy. 

The other way to price emissions would be to include agricultural emissions in the NZ Emissions Trading Scheme (NZ ETS), described as the ‘backstop’ option in the consultation document. The Government has already legislated to include agricultural emissions in the NZ ETS but agreed to work in partnership with industry and Māori to design an alternative that would achieve better outcomes for New Zealand and the agricultural sector.

“The pricing system is part of a whole framework around managing agricultural greenhouse gas emissions,” says Programme Director Kelly Forster. “Paying a price isn’t the only thing that would encourage farmers to reduce emissions.”

That’s why the options are based on putting money raised back into research and development, incentives to uptake technology, or actions on-farm that help reduce emissions. The sector and Government are actively developing and evaluating mitigation technologies, both from Aotearoa New Zealand and from offshore.

The two He Waka Eke Noa options are estimated to deliver emission reductions broadly aligned with current split-gas legislated targets in conjunction with existing policies and allowing for reductions from the waste sector, and if accompanied with the commercial availability of emissions mitigation tools such as methane inhibitors and low emissions livestock genetics.  The legislated targets are for methane emissions to reduce by 10% below 2017 levels by 2030; and nitrous oxide and carbon dioxide to reduce to net zero by 2050.

He Waka Eke Noa partners DairyNZ and Beef + Lamb New Zealand will explain each option, answer questions and listen to farmer feedback as part of a nationwide roadshow. 

Other partners including Deer Industry New Zealand, Federated Farmers, the Foundation for Arable Research, Horticulture New Zealand and Te Aukaha (Federation of Māori Authorities), are also discussing the options with their farmers and growers.

More than 30 meetings and webinars are scheduled for the coming month.  In light of the move by the country to the Covid-19 red traffic light setting, some changes have been made to the sector’s engagement programme and partners will keep farmers informed of any further changes.

“The Partnership has narrowed down pricing system options to two choices, and the backstop” says Kelly. “Each option has its trade-offs, and this period of meetings, workshops and webinars is a chance for farmers and growers to learn about the choices and provide an opinion on their preference and feedback on how options may be improved.”

The pricing options’ aim is to recognise the efforts of individual farms as they reduce their emissions. Farms could also choose to combine forces as collectives to report and account for their emissions.

The Partnership has also considered the possibility of starting with a processor-level hybrid levy and transitioning to a farm-level levy in future and will be discussing that with farmers over the coming month.

A key aspect of the two He Waka Eke Noa options is a “split-gas” approach that separates the short- and long-lived gases and applies different pricing mechanisms to each. This recognises the different impacts of the main agricultural greenhouse gases: biogenic methane, nitrous oxide, and carbon dioxide.

“Importantly, the options also recognise sequestration from indigenous forests and other on-farm vegetation that is not currently eligible for the NZ ETS such as riparian planting, perennial cropland, and windbreaks.  This planting may all count towards a farm’s sequestration, which can offset their emissions liability,” says Kelly.

The Consultation Document draws on extensive modelling and analysis of costs and impacts.  The supporting technical reports are also available on the He Waka Eke Noa website,   hewakaekenoa.nz/your-say .

Feedback from farmers and growers will be incorporated into final work on the recommendations which the Partnership is due to make to Government in April. The Government will make the final decisions on an agricultural emissions pricing system.

The Consultation Document is the basis of the conversations that partners are having with farmers and growers.

Details of events and webinars led by DairyNZ and Beef + Lamb New Zealand can be found on their websites DairyNZ and B+LNZ. 

Farmers and growers can provide feedback at the events or online. 

For further information contact yourfeedback@hewakaekenoa.nz

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