The New Zealand government is set to deliver on its election commitment to take agriculture out of the New Zealand Emissions Trading Scheme (NZ ETS).

The NZ ETS is a tool for meeting domestic and international climate change targets, and it requires businesses to measure and report on their greenhouse gas emissions.

However, the announcement today (Tuesday, June 11) means that agriculture will be excluded from the scheme.

Agriculture minister Todd McClay said: “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,” he added.

The government will establish a new pastoral sector group to constructively tackle biogenic methane, according to the coalition government agriculture and climate change minister.

New Zealand ETS

McClay confirmed that later in June 2024, the government 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.

Cabinet has decided to formally disestablish, the primary sector climate action partnership, 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,” McClay said.

Reducing emissions

Climate Change minister Simon Watts said the government has committed NZ$400m 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 NZ$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;
  • 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,” Watts added.

Welcoming the announcement

Beef and Lamb New Zealand (B+LNZ) has welcomed the government’s announcement that it is amending climate change legislation to keep agriculture out of the NZ ETS.

B+LNZ chair Kate Acland said: “We have consistently argued that agriculture going into the ETS would be a disastrous outcome. We welcome certainty about this being removed.”  

“We withdrew our support for He Waka Eke Noa because of the significant impact this would have had on our farmers.   

“Emissions reductions in the sheep and beef sector are already happening more quickly than needed. 

“The significant decline in stock numbers as a result of afforestation in the last few years means our sector will likely exceed the current target of a 10 percent reduction in methane by 2030,” Acland said.