Election 2023: National kicks agricultural pricing down farm path

They are putting a big focus on technology.
They are putting a big focus on technology. Photo credit: Getty Images.

The National Party won't require farmers to pay for agriculture emissions until 2030 at the latest, five years later than the scheme proposed by the Government.

Before charging farmers for on-farm emissions, National says they need to be provided with the tools to reduce their emissions. 

Under the party's plan, farmers would have the technology to recognise on-farm sequestration and measure emissions by 2025, but pricing wouldn't kick in then.

National's also promising to limit the conversion of productive farmland to forestry for carbon farming purposes, which it says will protect local communities and food production.

The policy from National comes after it last week announced it was pulling its support for the He Waka Eke Noa-influenced plan

He Waka Eke Noa was a partnership between government agencies, the primary sector and iwi that came up with a proposal for how to price agricultural emissions. It was intended as an alternative to bringing agriculture under the Emissions Trading Scheme (ETS).

The recommendation was to develop a farm-level split-gas levy, which would be up and running in 2025.

The Government took on some of the suggestions but proposed an alternative for how sequestration is recognised. This resulted in some concern from groups involved in He Waka eke Noa, like Beef + Lamb New Zealand. 

In December, the Government said final decisions on agricultural emissions pricing would be made by Cabinet in early 2023, with the intention of having legislation introduced by the middle of the year. But nothing has come of it so far.

"National supported the agriculture sector’s proposal for HWEN but the Labour Government rejected it, effectively killing any chance at consensus," the National Party says. "National's policy builds on the framework developed by the primary sector by supporting an emissions price based on pricing principles that include no leakage."

National would keep a split-gas approach to keep agriculture out of the ETS, with this operating by 2030 at the latest. It says prices would be set at a level that would reduce emissions but not risk forcing agricultural production overseas.

National agriculture spokesperson Todd McClay said technology isn't widely available to Kiwi farmers to reduce methane emissions. 

"That means any environmental costs lumped on farmers will push up food prices or send production overseas to higher emitting countries," McClay said. "National will give farmers the tools they need to reduce emissions before charging them for their on-farm emissions – by 2030 at the latest."

He said methane targets would also be reviewed "to ensure their consistency with no additional warming from agriculture".

The agriculture sector would be required to invest in research and development to reduce their emissions, he said.

"National will recognise on-farm sequestration, allowing landowners to earn carbon credits through other forms of carbon capture besides tree planting, for example restoring wetlands," McClay said.

"To prevent the loss of valuable agricultural land, National will introduce limits for new farm-to-forest conversions – including a moratorium on whole farm conversions to exotic forestry on high-quality land from 2024."

The party has released several principles which it believes are important for pricing, including that the price must be set "at the lowest level needed to achieve our emissions reduction targets, subject to no leakage".

An independent Agricultural Emissions Pricing Board would be established to implement the pricing system. 

"When pricing commences, the Agricultural Emissions Pricing Board will independently set the agricultural emissions price based on the above pricing principles. The Minister of Climate Change and Minister of Agriculture will retain the right to veto the price if it is not in line with the pricing principles.

"Revenue from pricing agricultural emissions will be ringfenced for use in agriculture. Funds will be reinvested into sector-led research and development to reduce farm emissions and support on-farm mitigation. National will also continue support for the Centre for Climate Action joint venture with leading agri-business leaders, aimed at developing new tools and technology to reduce on-farm emissions and drive their adoption."

Under the proposal from the Government last year, the pricing pathway for biogenic methane and nitrous oxide would be set for five years to provide certainty to the sector.

A board comprised of agriculture sector representatives and Māori was planned to be established to provide advice to the Climate Change Commission, which would have oversight of the pricing system. The sector would also have input into how income raised through the levy system is then used.

He Waka Eke Noa was established in 2019 after farmers expressed their desire to be involved in how the Government planned to tax agricultural emissions. If no alternative was developed, agriculture would fall into the ETS. 

The Government's first Emissions Reduction Plan (ERP) was released last year, detailing how different parts of the economy would cut down emissions over the coming decades. 

More than $700 million was allocated through the Climate Emergency Response Fund to reduce agricultural emissions. This included $339 million to accelerate the development of technology to reduce agricultural emissions and establish the Centre for Climate Action on Agricultural Emissions.

The plan said agricultural emissions make up 50 percent of New Zealand's gross emissions, including most nitrous oxide and biogenic methane. 

National climate changes spokesperson Simon Watts said the party was committed to meeting the Net Zero carbon target by 2050, and believed technology would be a significant part of that. 

"Around half of New Zealand’s greenhouse gas emissions come from agriculture but finding a sustainable pathway to reduce agricultural emissions, when we are among the most emission efficient farmers in the world, without decimating our most important economic sector is a major long-term challenge for New Zealand," said Watts.

"National is up for that challenge and that is why yesterday we announced we will remove the ban on gene technologies which will help give farmers the tools they need to reduce methane emissions through gene-edited crops, feed, and livestock."

Watts mentioned other National policies, including its Electrify New Zealand policy to increase renewable energy in New Zealand.