Agricultural greenhouse gas emissions pricing will come into effect in 2025, with the government close to confirming how the pricing system will work.
At the end of 2022, the Government agreed, in principle, to accept the agriculture emissions pricing package developed by He Waka Eke Noa. The proposed system is awaiting Cabinet sign-off, but the Government’s December ‘section 215 report’ confirms support for the Primary Industries Partnership/He Waka Eke Noa’s plan for a farm-level split-gas levy instead of including agriculture in the New Zealand Emissions Trading Scheme (ETS). That’s a big win for team agriculture!
However, December’s section 215 report only outlines high level planning. It shows that Government thinking is moving in the right direction, but doesn’t provide much detail on how the pricing system will actually be managed and implemented. That work could not properly get underway until the high level details were confirmed.
Know your number!
While the detail around greenhouse gas emissions (GHGe) implementation is yet to be confirmed, the big picture isn’t going to change. From 2025, the majority of New Zealand farms will be charged for their GHGe. That means that if you don’t already “know your number” it’s time to get moving.
FAR has developed a GHGe calculator, called E-Check, specifically for arable farms. It’s a simple spreadsheet: download it from the FAR website, type in your farm size and a couple of other details, then add in how much N fertiliser you’ve applied in a 12 month period, along with your stock numbers for the same 12 months. Once that’s done the spreadsheet will calculate your farm’s GHG emissions, providing separate numbers for methane (CH4), nitrous-oxide (N2O) and carbon dioxide (CO2), as well as an emissions total in kg CO2/ha.
Once you have these figures, you can start developing an emissions reduction plan. For example, if E-Check shows that the majority of your farm’s emissions are in the form of N2O, you can start looking at ways to reduce N use on farm. Reducing N will automatically reduce N2O emissions. FAR Focus 14: Nitrogen, The confidence to cut back, is a great place to start if you’re looking to reduce N use. If, however, you want to reduce CH4 emissions, you’ll need to consider reducing stock numbers, as the majority of CH4 comes from animals.
You may choose not to reduce emissions, judging that the cost of emissions will be lower than the impact of any changes you make. For example, if lamb grazing is an integral and profitable part of your system, you may choose to keep the same number of animals on farm, rather than removing them from the system. That’s entirely your call. Unfortunately, it’s very difficult to provide clear guidance on such reduction plans at present, as we have yet to find out what GHGe prices will be.