The Government has recently released a discussion document of the second Emissions Reduction Plan. This plan outlines the strategies and actions that will take place across all sectors of our economy to meet our emissions budgets. The second emissions reduction plan is focused on what will be done to meet targets for emissions reductions between 2026 and 2030.
This blog will summarise and highlight:
- key context for emissions in New Zealand
- the Governments proposed plan for reducing agricultural emissions
- the proposed plans for the forestry sector that are of importance for the agricultural sector
- where the Government is at regarding plans to recognise non-forestry removals of carbon (e.g. wetlands, on-farm vegetation
The following link provides a brief explainer of emissions reduction plans and their relevance for New Zealand. https://www.youtube.com/watch?v=Twe66DHGRbQ
The Zero Carbon Framework is central to New Zealand’s approach to emissions reductions and responding to climate change. Central to this is the purpose of limiting global average temperature rise, as well as preparing for, and adapting to, the effects of climate change. New Zealand has domestic emissions targets which are:
- Long-lived gases are net zero by 2050
- Biogenic methane emissions are 10% below 2017 levels by 2030, and 24-47% below 2017 levels by 205
New Zealand has a unique emissions profile and it is important to understand this
New Zealand has a unique emissions profile compared to other countries around the world. This is because:
- Agriculture is our primary industry in NZ, meaning that a larger proportion of our emissions are from this sector. While we may be efficient, the scale of our production means that it is a huge component of our country’s emissions profile. It is important to think of agriculture as an industry as a whole when considering it in relation to emissions, not just what you do on your individual farm.
- Our energy sector is highly renewable which means that we have a lower footprint from the energy sector compared to other countries who have been more dependent on fossil fuels.
Our unique emissions profile means that our approach to reducing emissions is unique compared to other countries around the world. This is important to understand as our unique profile means that what works to get large emissions reductions overseas will not have the same impact on emissions reductions in New Zealand.
How do we approach emissions in New Zealand?
NZ’s approach to emissions is to use a net-based approach. This approach means that carbon removals have already been accounted for, and the emissions reductions that we need to enact need to be through additional practices, rather than anything that is already being done. The figure below shows how net emissions numbers are calculated. It is important to understand that current removals (largely sequestration) are already accounted for.
The Five Pillars of the Government’s Climate Change Strategy
The second Emissions Reduction Plan is based on 5 Pillars that represent the key areas of priority for the Government when it comes to Climate Change Strategy. These pillars are shown in the following figure:
The Emissions Reduction Plan covers the Government’s intentions for reducing emissions in the energy, transport, waste, agriculture, and forestry and wood processing industries.
The following summary will be focused on the Agriculture and Forestry sections which have greatest relevance for farmers:
AGRICULTURE
Why do we need to reduce emissions in agriculture sector?
As the agricultural industry is such a significant proportion of our emissions profile, the largest impact on our overall profile will come from reducing agricultural emissions. This is important for various reasons such as:
- Meeting our obligations for emissions reductions nationally and internationally
- Reducing emissions in the supply chain of our food exports to satisfy emissions targets across all parts of the supply chain, which is inherently linked to what happens on farm
What do NZ's agricultural emissions look like?
Agriculture emissions are a significant part of New Zealand’s emissions profile. This is unique compared to other countries as the sector is a significant proportion of our GDP, and because our electricity generation is largely renewable compared to fossil fuels like in other countries. Agriculture emissions can be broken down further with the following contributions:
- 78.2% is from methane emissions produced by ruminants
- 5.2% from soils. This mostly nitrous oxide
- 4.6% from manure management systems
- 2.2% from carbon dioxide from other sources
How does the Government plan to reduce agricultural emissions?
The Governments approach to emissions reduction in the agricultural sector is largely focused on innovation and technology. They emphasise their commitment to ensuring producers have the tools and technologies to reduce emissions. This is focused on:
- Accelerating the development and commercialisation of emissions-reduction tools and technologies
- Supporting clear and effective regulatory pathways for these tool.
- Currently reviewing methane science and targets
- Implementing a fair and sustainable pricing system for on-farm emissions by 2030
- Standardising the estimation of farm-level emissions. This ensures that emissions calculations are consistent across the sector. This will be available by 2025.
- Recognising on-farm sequestration
- Providing extension to support producers make changes
Technological solutions are a vital component of what the Government is hoping will allow reduction in methane emissions to occur in the agricultural sector. It is important to note that these are not currently available for commercial use. The proposed technological solutions are summarised in the table below, as well as the assumptions that underpin meeting emissions reductions targets with this technology, as outlined in the Technical Annex.
FORESTRY
Why are the plans for the forestry sector relevant for the agriculture sector?
What occurs in the forestry industry is of critical importance for that of agriculture as both sectors rely on sufficient land. There have been increasing tensions over recent years due to the loss of highly productive farmland to forestry, which has been incentivised through the Emissions Trading Scheme (ETS). The ETS is a cap-and-trade system based on government-issued New Zealand emission units (NZUs). This requires emitters to surrender NZUs for their emissions, while removals through forestry can earn NZUs which can then be sold on to emitters. The returns that the ETS can provide for foresters has driven the increase in farmland being converted to large-scale forestry plantations.
Forestry is currently the only form of carbon removal that is recognised as contributing to New Zealand’s domestic and international climate change targets. Forests become carbon sinks while growing, and in long-lived wood products such as building materials, due to the storage of carbon within them. However, forests also can be a source of emissions through felling and deforestation.
The second Emissions Reduction Plan emphasises that forestry and wood-processing plays a key role in meeting New Zealand’s climate change targets and has great potential to support the Governments objectives to grow the economy and exports, while adding value and lifting productivity. This focus fits into the Governments wider plans for the sector that is based around:
- Contributing to economic growth, jobs and export revenue
- Delivering cost-effective, high-value, low-emissions products and solutions to shift away from emissions-intensive building materials and energy
- Supporting land-use resilience and adaptation in a changing climate to ensure forestry remains productive nationally and regionally, while delivering recreational, amenity and biodiversity benefits
- Removing carbon to support New Zealand’s climate goals
What proposed forestry policy and initiatives are of importance for agriculture?
The key focus for the forestry sector that is importance for agriculture is the Governments goal of encouraging afforestation through appropriate incentives. There has been greater investment in forestry (particularly exotics) over recent years due to the significant increase in carbon price. While this has had a benefit on meeting emissions budgets, it has caused an imbalance between the use of productive land for forestry and agriculture. The Government seeks to encourage afforestation for increased carbon sequestration, in balance with other land uses, and has proposed three policies to achieve this:
NON-FORESTRY REMOVALS
There is great interest in the agricultural sector regarding the potential for recognising and rewarding on-farm carbon sequestration through non-forestry removals. The Government recognises that carbon sequestration can occur through biological, geological, oceanic, chemical and technological processes. Additionally, the Government sees other forms of removing emissions as opportunities to reduce net emissions that may become viable in the future.
It is important to note that non-forestry removals are NOT currently in the plan of recognising carbon sequestration to work towards our climate targets. This is largely due to the fact that the science regarding the amount of carbon different non-forestry removal approaches actually sequester, and there is also a need for greater New Zealand specific science. Compared with forestry, the potential carbon sequestration from these categories is likely to be small in the short to medium term.
The Government is considering a range of ways to encourage non-forestry removals. Recognising non-forestry removals could provide some form of incentive that rewards businesses and landowners for their efforts. However, to ensure balance, such a scheme would also need to require the incentive be paid back if those carbon removals are later lost. This is how the ETS works in regards to forestry.
The table below identifies non-forestry removal activities that have potential to sequester carbon. While we know that carbon is sequestered in more than just forests, the recognition of this and rewarding via incentives is still some way off, and not in current plans for addressing our climate targets.
The Government wants and needs your feedback
The Government has identified some key questions that they would like feedback on regarding the planned approach for reducing agriculture emissions.
- What are the three main barriers or challenges to farmer uptake of emissions-reduction technology?
- How can the Government better support farm- and/or industry-led action to reduce emissions?
- How should Government prioritise support for the development of different mitigation tools and technologies across different parts of the agriculture sector?
- What are three possible ways of encouraging farmer uptake of emissions-reduction tools?
- What are the key factors to consider when developing a fair and equitable pricing system?
- Any additional feedback on the Government’s thinking about how to reduce emissions in the agriculture sector
Or want to have a chat about your thoughts?
Get in touch with Lucy at lucy@thewholestory.co.nz
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