FARM EMISSIONS LEVY PROPOSED A farm-level levy/rebate scheme that puts a price on emissions has been proposed to the Government as the best way to reduce agricultural methane and nitrous oxide emissions.

The scheme would see dairy farmers

Emissions Trading Scheme (ETS)

paying on average 1 cent per kilogram at processor level by 2020. It is

“It is proposed that the money

raised by a pricing policy is put into

of milk solids ($ .01/kg MS) in the initial anticipated that a phased-in approach an Agricultural Emissions Fund for stages, according to the report from

will provide time for farmers to collect

the Interim Climate Change Committee and measure the required data to (ICCC), impacting the bottom line for all agribusiness, including PKW.

But the incorporation is welcoming the recommendation, says

Mitchell Ritai, General Manager

Shareholder Engagement, as part of its commitment to manage climate

change in the Kaitiakitanga Strategy. “We take our role as kaitiaki of our

whenua very seriously and believe that many other farmers do as well” says Mitchell. “While there seems to be a

general agreement on the outcome, knowing how it will be achieved will

require further debate and discussion with all who will be impacted.” The ICCC was asked by the

Government to find a solution to the issue of agricultural greenhouse emissions (mainly methane and

nitrous oxide), which make up around 48% of New Zealand’s total reported

greenhouse gas emissions. Reducing greenhouse gases is seen as crucial

to achieve the targets set by the Paris Agreement in 2015 to limit global warming to well below 2 degrees

above pre-industrial levels. Globally, the world is not on track to achieve this target.

The ICCC has recommended a 5 year period to implement the scheme while

also introducing an interim step where emissions will be priced through the

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report on their annual emissions.

The levy/rebate scheme has been

mooted as a simple way of including

agriculture in the existing ETS without having to trade units, and farmers will initially receive a 95% free allocation. This will help minimize any social

impact from increased costs as well as incentivise farmers to reduce

levy costs through reducing on-farm emissions.

While compiling the report, and its recommendation, the ICCC

highlighted that any policy must

fulfill Te Tiriti o Waitangi principle of partnership and good faith with iwi

and hapū and recognise the unique characteristics of Māori land.

The ICCC also recommended that

any board or committee established

to manage the funds generated by a pricing policy, estimated at between $47 and $95 million per year over the first decade, includes

representatives from the agriculture sector and iwi/Māori landowners to ensure effective co-governance.

recycling back into programmes that will directly help farmers to transition

to farm-level pricing in 2025. A portion of the fund will be used to enable owners of Māori land to equitably

engage in this process and access

opportunities,” says Mitchell. “While

we welcome the Government’s plans, we also acknowledge that there are still some areas that need further

attention; we are looking forward to

the Government’s response from the consultation round.”