Oct 11, 2022
Deer Industry New Zealand recognises that the government proposes to adopt a system for pricing agricultural emissions outside the New Zealand Emissions Trading Scheme (NZETS).
The farm-level pricing system the government has announced is in line with the He Waka Eke Noa proposal. However DINZ remains deeply concerned about the impact of prices on farmers who have no cost effective way to reduce their emissions of methane and nitrous oxide, says Deer Industry NZ chair Mandy Bell.
We have just received the consultation documentation and now need to go through it in detail to understand the impact on deer farming. But the initial review highlights the following:
- Agricultural emissions will be priced from 1 January 2025.
- The Government is proposing a farm level pricing system.
- Methane is to be priced by weight and separately from nitrous oxide and CO2. This is important as it recognises the short live nature of methane.
- The system will incentivise actions to reduce emissions.
- Some on-farm sequestration is to be recognised, but not in the way that the HWEN recommendation had proposed.
- Revenue collected from ag. greenhouse gases would be reinvested to assist agriculture manage and reduce emissions.
There is as yet no guidance for the price of methane; there is a recommendation that nitrous oxide would be linked to the ETS NZU, but with a discount.
The government has also released economic modelling to demonstrate the impact on a range of farm types. As was previously communicated to government, the largest impact falls upon the most extensive farming systems. The government has acknowledged that the pricing system has different impacts and is seeking sectors’ views on levy relief and transition mechanisms for farming businesses who are most exposed.
Mandy Bell says “DINZ will be reinforcing to policy makers what they have already recognised - that the farm price needs to allow businesses to remain economically viable until practical tools to reduce methane and nitrous oxide emissions from pastoral farming are available.
“We believe it is essential that government and sector invest in developing and bringing new technologies to NZ farmers to help them reduce their gross emissions as soon as possible. If our farmers have practical technology they can use, they will use it. Our farmers are rapid adopters and are innovative.”
Here are the links to the consultation documents:
Full document: https://environment.govt.nz/publications/pricing-agricultural-emissions-consultation-document
Consultation page: https://consult.environment.govt.nz/climate/agriculture-emissions-and-pricing/