Agricultural emissions

By the end of 2022, the Government will need to make a decision on how emissions from agriculture should be priced. We are developing independent, evidence-based advice that will help the Government to make its decisions on pricing agricultural emissions.  

There are two parts to our advice – assessing farmers’ readiness for a farm-level system for pricing agricultural emissions, and looking at what financial assistance – if any – should be provided to farmers participating in an emissions pricing scheme.  

The He Waka Eke Noa partnership is developing a proposal for pricing agricultural emissions outside of the NZ ETS. Our advice will include an assessment of the progress the He Waka Eka Noa partnership has made to prepare farmers and the sector for a farm-level pricing system. 

Agricultural emissions are legislated to enter the Emissions Trading Scheme by 2025. The Government can bring them in sooner if it believes the He Waka Eke Noa partnership has made insufficient progress in preparing the farming sector for farm-level emissions pricing.  

Both parts of our advice will help the Government make a decision on agricultural emissions pricing by 31 December 2022.

Agricultural Assistance

We are providing advice on what financial assistance – if any - should be provided to farmers participating in a farm-level emissions pricing scheme, and how assistance fits in with the proposals set out by He Waka Eka Noa, in their February 2022 consultation document.

He Wake Eke Noa received a one-month extension to the date their advice has to be delivered to Government, due to the impact of Covid 19 on their consultation plans. They will deliver their final recommendations to Ministers in May 2022.  

Due to the extension to the He Waka Eka Noa partnership's timeframes, the Commission asked Ministers to realign the timeframes for this request to match when He Waka Eka Noa reports to Government. Ministers agreed, and this advice is now due to the Ministers of Climate Change and Agriculture by 31 May 2022. 

The request for this advice has been made under Section 5K of the Climate Change Response Act.  The terms of reference for this work are published below (as required under the Act), along with our correspondence with Ministers.   

Letter from Ministers requesting advice from the Commission under 5k and draft Terms of Reference (TOR) (441 KB)
Our response letter and suggested amendments to the TOR (595 KB)
Letter from Ministers providing final TOR for the request (397 KB)
Terms of Reference (PDF 291 KB) 

Our letter to Ministers about the He Waka Eka Noa extension (290 KB)

Ministers' response to our request (174 KB)

Agricultural Progress Assessment

We are also preparing advice on farmers’ readiness for farm-level emissions pricing. This advice is due to the Minister of Climate Change by 30 June 2022. It includes an assessment of the progress that has been made through the He Waka Eke Noa partnership to prepare farmers and the sector for a farm-level pricing system, and if needed we will advise where more work needs to be done. 

How we’re developing our advice 

Our assessment will look at the agriculture sector’s progress towards measuring and reporting agricultural emissions at the farm-level, and making sure farms have effective plans in place to manage emissions. We will consider what support farmers might need for agricultural emissions pricing, and any barriers that could prevent farmers and the sector from participating in a farm-level pricing scheme.  

Our advice will draw on the best available evidence. There are some specific aspects we need to take into account when forming our advice, including current and upcoming requirements on farmers, existing and future technology, social circumstances, how impacts are distributed, and the Crown-Māori relationship.  

Engagement will play an important role as we develop our advice. We are talking to people who hold the knowledge and information we need to ensure our advice is robust. At the same time, this is complex mahi and many groups are being asked to consult or engage on over-lapping and similar pieces of work. We are working to coordinate and streamline engagement where possible. 

Why this advice is important 

Our assessment will help the Government understand how ready farmers are for an emissions pricing system that is practical, effective and equitable, along with how and why financial assistance might be provided to farmers. The Government’s decisions in December 2022 should provide clarity on what emissions pricing farmers will face.  

For a farm-level pricing scheme to be effective, it must drive emissions reductions while being practical to participate in. An equitable scheme is one that is workable for a range of farm types – including for iwi/Māori collectively owned land – and that manages social, cultural, and environmental impacts.   

We know that farmers need a clear and consistent way forward, and more certainty on what the future will look like for the sector. Many farmers have already started moving to lower emissions practices on farm. It will be important for farmers to know their emissions profiles ahead of any farm-level pricing scheme – so they know where their emissions are coming from, and what actions they can take to reduce them.