Agriculture in the Emissions Trading Scheme

How is agriculture affected by the ETS?

Participants in the New Zealand Emissions Trading Scheme (NZ ETS) for agriculture will have to report activities and surrender New Zealand Units (NZUs) to account for agricultural emissions. They will receive allocations of NZUs to help offset the cost of this.

Compulsory reporting begins in 2012 but the requirement to surrender NZUs begins only in 2015. Voluntary reporting begins in 2011.

Like all New Zealanders, farmers and growers are likely to notice a small increase in energy prices due to the ETS. For more information on these effects and how to reduce your energy costs, please see What does the ETS mean for me?

Participants

With some exceptions, participants for agriculture are meat and dairy processors, exporters of live animals, fertiliser importers and manufacturers, and egg producers.

Farmers and growers do not need to register and directly participate in the NZ ETS.

Obligations

Agricultural participants will face an obligation to surrender NZUs for agricultural emissions.

Please see Agriculture’s obligations: Reporting emissions and surrendering NZUs for more information.

Regulations

The Government made regulations in September 2010 that set out the exemptions for agricultural participants, the information to be provided, and the formula to calculate agricultural emissions.

Details can be found on the Ministry of Agriculture and Forestry’s website.

Allocations

Please see Agriculture Allocations: NZUs for Agriculture for more information.

Agriculture and climate change

New Zealand’s biologically-based economy relies on a temperate and stable climate for production. Action on climate change – here and internationally – is crucial for New Zealand’s long-term economic, social and environmental wellbeing.

The agriculture sector is the largest single source of greenhouse gas emissions in New Zealand, making up approximately 48 per cent of our total emissions. Emissions in the sector are continuing to grow.

By placing a price on carbon, the ETS provides an incentive to reduce the level of emissions for every unit of agricultural output. Emissions reductions can be made by:

  • improvements in farming efficiency
  • increased tree planting
  • more efficient use of nitrogen fertiliser
  • increased use of nitrification inhibitors
  • more effective management of animal waste, and
  • the use of other mitigation technology as it is developed.

 

Last updated: 16 December 2011