Next steps critical for delivering Aotearoa New Zealand’s climate goals

25 July 2025

• The Minister of Climate Change has today released the Commission's 2025 emissions reduction monitoring report.
• The report looks at Aotearoa New Zealand’s progress to date, and how well current policies and plans are setting the country up to meet its future climate goals.
• Domestic emissions continued to decline steadily in 2023, and the country is likely to meet the first emissions budget. However, there are significant risks to meeting future climate goals. More work is needed – and soon – to lay the groundwork for emissions cuts after 2030.
• The Commission’s report shows there are opportunities across the economy to reduce emissions further – particularly in renewable energy, transport and agriculture.
• The Commission’s independent monitoring role supports the government-of-the-day to continually improve its plans for climate action to keep the country on track.  

The Climate Change Commission’s 2025 emissions reduction monitoring report shows steady progress on reducing the country’s climate pollution, but urgent action is needed to get on track for future climate goals says Jo Hendy, Chief Executive of the Climate Change Commission.

“Change is happening,” says Hendy. “We’re seeing more renewable energy generation, process heat conversions, electrification. And it’s starting to show more in the emissions data. The key now is to build on that momentum – the next steps are crucial for delivery.”

“Our role is to give New Zealanders a clear, independent picture of how the country is tracking – no matter who’s in government – where we’re making headway, and where more action is urgently needed.”

“Going further is in the country’s best interests,” Hendy says. “Climate action and economic opportunities go hand-in-hand. There’s growing global evidence that countries investing in clean technology and renewable energy are not only cutting emissions, they’re also boosting productivity, creating jobs, building resilience, and unlocking long-term growth.”

The Commission’s report shows the country is likely to meet the first emissions budget (2022–2025), in part due to accounting changes. However, the assessment shows that although it is possible to meet the second and third emissions budgets, the risks have increased. 

• There are significant risks to achieving the second emissions budget (2026–2030).
• Current Government plans are insufficient to meet the third emissions budget (2031–2035).
• There are significant risks for meeting the 2050 target. 

Hendy says the Commission’s analysis shows that while things are broadly on track through to the end of this year, the risk of veering off course after that has increased. 

“The current policy settings aren’t enough to deliver the emissions reductions that Aotearoa New Zealand has committed to. That’s why we’ve recommended specific next steps, because delivery will falter without them.”

“Falling short doesn’t just mean missing a target – it means higher costs down the track, lost economic opportunities, and more disruption for communities. That’s what we’re trying to avoid.”

“Delivery is a stated priority for the Government,” Hendy says, “and our report provides the independent advice needed to help them make good on that promise.”

To ensure the country can meet its future emissions goals, the Commission recommends the Government acts now to:  

• strengthen the structure of the New Zealand Emissions Trading Scheme (NZ ETS) – so it can play a strong, ongoing role in helping cut emissions fast enough, and
• implement additional targeted policies – to speed up the shift to renewable energy, cleaner transport, and low-emissions farming.

 “Cost matters, and many people have it tough right now,” Hendy says. “That’s why the way we manage the transition is critical. New Zealanders care deeply about fairness and about securing a better future – and we can do both.”

“There are smart opportunities in every sector,” she says. “And it makes sense to use as many of them as we can, not just to reduce emissions but to spread the risks, share the benefits, and build resilience.”  

“This approach also helps buffer against factors outside of the Government’s control. For example, a dry year could increase emissions from electricity generation, storms or wildfires could reduce the amount of carbon dioxide removed by forests, or international accounting rules could change.”

“The biggest opportunities are in renewable energy, transport and agriculture.  

“Lower prices for solar, electric vehicles, and batteries can accelerate the shift to affordable and reliable low-emissions energy and transport systems. In agriculture, tailored advice and incentives can help farmers and growers adopt new tools and practices in ways that work for them – there’s no one-size-fits-all, and our competitive advantage depends on getting that right.” 

“This is a fork-in-the-road moment for Aotearoa New Zealand,” Hendy says. “Electrifying our ageing, high-cost energy system isn’t just good for the climate – it makes economic sense. It’s also the best way to address wider issues such as gas supply constraints and volatile petrol prices, while making us less vulnerable to global shocks and natural disasters. The decisions made now will shape our energy costs for decades.” 

“Many of the actions that cut emissions also strengthen communities and improve lives,” she says. “Cleaner transport reduces harmful air pollution that could save NZ$1.1 billion per year by 2035. Warmer, more efficient homes protect families from energy hardship and poor health.” 

“People can’t hold governments to account if they don’t have the full picture. That’s what this monitoring is for – to provide independent, transparent evidence that supports both public understanding and good policy.” 

“Ultimately, getting on track isn’t just about meeting climate goals,” Hendy says. “It’s about reducing economic risks, strengthening our position in a rapidly changing world, and building a fairer and more resilient future for everyone.” 

Report and graphics available for download

The full report is available on our website alongside a range of supporting materials:

• One-page overview – key points and figures
• At a glance – plain language summary of the report
• Whakahekenga rehukino summary – covering key points for emissions reduction actions centred on iwi/Māori, available in te reo Māori and English.
• Sector summaries – covering key points for energy, industry and buildings; transport; agriculture; waste and fluorinated gases; and removals. 
• Technical material, including our technical annex and data that informed our analysis
• Image files (.PNG) for graphs and diagrams in this report: Download image files [.ZIP – 2.96 MB]

About this monitoring report

This is the second time the Commission has delivered the emissions reduction monitoring report. Aotearoa New Zealand has set emissions budgets for reducing climate pollution. Each year the Commission assesses how the country is tracking towards meeting those budgets, which builds up a clear view of how the country’s emissions are tracking over time.

The Commission’s independent assessment supports the government-of-the-day to continually improve its plans for climate action to keep the country on track. It also gives people clear, trusted information to hold governments to account, which helps build trust in the system. The Commission is not required to make recommendations in this report, but can choose to if the circumstances warrant it.

The Commission’s analysis covers government policy and action for the 12 months up to 1 April 2025. Since the Commission’s 2024 report, the Government has published its second emissions reduction plan, so the Commission has updated the benchmark used to assess adequacy to reflect the modelling used for the Government’s plan.  

Gross vs net emissions

Gross emissions are the country’s total greenhouse gas emissions from human activity. Net emissions include removals of CO2 from the atmosphere by forests. 

How the 2025 emissions monitoring report links to the Commission's previous advice

The Commission’s advice and reports serve different purposes but are interlinked. 
The annual emissions monitoring report tracks progress against Aotearoa New Zealand’s current emissions budgets and 2050 target, and assesses whether the Government’s emissions reduction plan is adequate.

In April 2025, the Commission provided advice on settings for the NZ ETS. The purpose of that annual advice is to align the unit volumes in the scheme with the Government’s plan to meet current budgets and targets. The Commission therefore recommended settings in line with the Government’s second emissions reduction plan, which had just been released.

In November 2024, the Commission recommended tightening the first, second and third emissions budgets to reflect updated accounting rules and higher forest planting rates than anticipated when the budgets were set. If the Government adopts this recommendation, further steps to reduce emissions will be required – and remain achievable.

In this 2025 emissions monitoring report, the Commission has found that the Government’s current plan does not lay sufficient groundwork to meet the current third emissions budget, or the tighter budgets proposed in November. However, there are credible opportunities to close the gap – particularly across energy, transport, and agriculture – if timely action is taken.