Dairy group calls on change to methane target, says sector could be at risk

DairyNZ says the sector could be at risk under the Government's proposed Zero Carbon Bill.

The Bill was announced on May 8 and aims to curb New Zealand's emissions for both CO2 and methane.

DairyNZ has released its submission on the bill and is calling on the Government to revise the methane target.

It said the current proposed range puts New Zealand's world-leading dairy sector at risk, and predicts farm profit could go down by as much as 42 percent.

DairyNZ Chief Executive Tim Mackle said it would have a have a huge effect on national and regional economies.

Dr Tim Mackle has strong concerns about the proposed 2050 methane reduction target range.
Dr Tim Mackle has strong concerns about the proposed 2050 methane reduction target range. Photo credit: Supplied

"Dairying in New Zealand is world-leading in producing low emissions milk. We have a reputation for sustainability, and we want to keep it that way," he said.

"We are committed to playing our part in the transition to a low-emissions economy alongside the rest of New Zealand, but it must be done fairly, and consider the science as well as the economic impacts.

"DairyNZ supports much in this Bill.  However, we still have strong concerns about the proposed 2050 methane reduction target range, and our continued support for the Bill is conditional on this changing" said Dr Mackle.

The Bill contains a 2030 methane target and a 2050 methane target range.

"While the 10 percent reduction by 2030 will be very challenging, we believe we can make a decent crack at it.  Our modelling indicates an average annual cost could be up to $13,000 per farm between 2020 and 2030. That's why we are advocating for the target to be checked by the Commission once they are established, and regularly reviewed."

However he said the 2050 target was not realistic and must be changed. 

"The Government's proposed 2050 target range of 24 - 47 percent is not soundly based in science in a New Zealand context and it is higher than official advice."

Dr Mackle said the economic modelling used to inform the Bill was also undercooked and did not include a robust analysis of the implications for dairy farmers. 

"This is a fundamental issue, given the significant role of the dairy industry in New Zealand's economy."

DairyNZ wants the 2050 target to be up to 24 percent, and regularly reviewed whilst the science remains unsettled.  

It also wants farmers to get recognition for their planting as a way of offsetting emissions. 

DairyNZ estimated that with an up to 50 percent cut in methane dairy farmers total profit could reduce by between 33 to 42 percent across the 2030-2050 period. 

"This is a substantial loss in income and is more than ten times higher than the cost of $2,500 per farm estimated in the Regulatory Impact Statement."

He said farmers were putting a lot of effort into planting on their farms, which have water quality, biodiversity, biosecurity, and greenhouse gas benefits and policies must see farmers getting recognition for this.

Green Party co-leader James Shaw told Newshub Nation in May every industry is going to have to change their processes under the Bill.

"You've got industries like the steel mill for example, they've got to get down to net zero, currently the technology does not exist for them to be able to do that too.

"The whole point of this is that over the course of the coming 30 years you've got to see billions of dollars of investment and development, new industries, new technologies and so on.

"And it's not just about farmers, it's about all of us, it's got to affect steel, aluminium, cement, transport - virtually every part of the economy has got to see some shift."

Submissions on the Bill close today.