New Zealand’s agricultural emissions tax will be as low as possible

New Zealand will set the greenhouse gas tax on the country’s farms at very low levels to avoid overburdening primary producers.

“The most important thing is to implement sustainable emissions reductions,” Prime Minister Jacinda Ardern said in a statement in Auckland on Wednesday. “

In October, the government indicated that it would tax agricultural emissions at the farm level instead of including them in an emissions trading scheme. Farmers have protested a requirement to begin paying a regulated price for their methane, carbon dioxide and nitrous oxide emissions, which would push many people off their land, reduce the country’s exports and hurt rural communities.

Today’s response follows an industry filing period and represents a “workable system,” Ardern said. It includes a five-year path to levy starting in 2025, providing certainty to farmers and allowing industry participation in the levy-setting process, he said.

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As announced in October, ministers will set the levies on advice from the Climate Change Commission. But the government has agreed that a board with representatives from the agricultural sector and Māori will provide advice and act as a channel for input from the sector.

The government is working with the sector to develop a process for recognizing carbon sequestration from on-farm plantations.

Ardern said the government’s shared goal with industry was to support farmers to increase exports, reduce emissions and maintain the sector’s international competitive advantage.

“New Zealand needs to be at the forefront to be competitive in a market that increasingly demands sustainable produce,” he said.

Industry group partners He Waga AK Nova, which includes Beef + Lamb New Zealand, Dairy New Zealand and the Meat Industry Association, said the government was moving in the right direction, but there was work to be done on the details.

They welcomed the commitment to take into account social, cultural and economic impacts when setting emission prices. They said there was no support for an emissions-reduction-at-any-cost approach.