The Primary Sector Climate Action Parternship, He Waka Eke Noa, has recommended a farm-level split-gas levy to reduce emissions and sequester carbon in New Zealand from 2025.

Farmers would be responsible for reporting their emissions using a greenhouse gas management plan, and paying levies related to the amount of methane and long-lived gases emitted.

He Waka Eke Noa chair, Michael Ahie said this is the best way to maintain the viability of farmers while meeting the government requirement for a price on emissions.

The chair explained:

“This system would give farmers the ability to control their own farm emissions, which will incentivise a change in behaviour as part of an integrated farm-management approach.”

Levies, which should be as low as possible, will be invested back into the primary sector for research and development of emissions-mitigation technology and practices, according to the partnership.

He Waka Eke Noa said the estimated impact on average farm profit varies from zero up to 7.2%, however, this can be significantly higher depending on the type of farm.

Farmers would be given incentives, the partnership said, for using inhibitors and animal genetics that reduce emissions per kg of food, and financial recognition of on-farm carbon sequestration.

The chair added that this would be the best alternative to pricing agricultural emissions through the New Zealand Emissions Trading Scheme, without disrupting the country’s global advantage of grass-fed systems.

Methane emissions in New Zealand

Under the proposed system, farmers would be able to clearly see the direct impact of their on-farm decisions on their emissions and costs, according to the partnership.

The split-gas approach considers the different impact of methane, compared to long-lived gases including nitrous oxide from livestock and synthetic fertiliser, and carbon dioxide from urea.

A separate price and levy on methane emissions recognises that, as a short-lived gas, these do not need to be cut to zero, but should be reduced and stabilised.

The proposals would incentivise additional cuts in methane emissions by 4%-5.5%, the partnership said, and, together with reductions from the waste sector, on-farm actions would achieve the 10% reduction target by 2030.

Already over 60% of farms in New Zealand know their on-farm emissions numbers, according to He Waka Eke Noa.

The government will now consider the partnership’s advice before making decisions later this year on how agricultural emissions are to be priced from 2025.