ETS path outlined for farm emissions

A109 Light Utility Helicopter flight with mayor Gisborne City from the air in November 2023.

Opinion

It has taken a softly, softly approach, but farming leaders have accepted the inevitable and signalled support for the industry entering the Emissions Trading Scheme with livestock emission charges by 2025 — at 5 percent of total emission costs. At the current New Zealand ETS price of $25 per tonne that will equate to 1 cent/kg of beef, 1c/kg of milk solids, 3c/kg of sheep meat and 4c/kg of venison.

A phase-in would begin in 2022, with farmers being required to report their emissions by 2024.

The Government’s Interim Climate Change Committee has recommended a levy and rebate scheme that avoids the need for farmers to trade units.

It has also proposed the sector come into the ETS sooner via charging of agricultural processors, and fertiliser manufacturers and importers being charged fully for nitrogen emissions. The $47 million a year collected from processors would be recycled back to farmers and growers to help establish measurement tools by 2025.

The industry opposes this, describing it as a broad-based tax on farmers. Instead it proposes sector levy organisations fund the transition into an emissions pricing system by 2025.

The options will now be consulted on over the next four weeks.

The Government also appears to have accepted the committee’s recommendation to shift focus away from 100 percent renewable energy to other more effective and less expensive emissions policies.

The committee found that fulfilling such a policy would increase power prices by up to 39 percent, affect low income households the most, make blackouts up to 100 times more likely, and could actually raise emissions by inhibiting a transition from fossil fuels to electricity in transport and industrial heating.

It also found that renewables were already on track, without further intervention, to rise from 82 percent to about 97 percent of electricity production by 2035.

Energy Minister Megan Woods said the Government would not “die in the ditch” if its goal of 100 percent renewable electricity generation by 2035 wasn’t met, but she was “confident new technologies will be developed to help us get there affordably”.