Red meat companies amongst those considering NZ ETS Review

Red meat companies and farms are among the businesses that will be responding to the Government’s review of the New Zealand Emissions Trading Scheme ( NZ ETS) to assess its operation and effectiveness to 2020 and beyond.

Tim GroserAnnouncing its opening earlier this week, Climate Change Minister Tim Groser explained that the review will look at how the ETS may have to evolve to support New Zealand in meeting new targets for reduction of greenhouse gas emissions (GHG) after 2020.

“We also want to ensure the NZ ETS can continue to support New Zealand’s transition to a low emissions economy and that we are prepared for the costs and opportunities associated with this transition,” he said.

The review will focus on three key areas: what to do about some transition measures that were introduced to moderate the initial impacts of NZ ETS, how the scheme needs to evolve to meet New Zealand’s future targets and operational and technical improvements.

Several of the larger meat companies, including Silver Fern Farms, Alliance, ANZCO Foods and AFFCO, have already been working to reduce energy and water use in their food manutacturing operations and have engaged in energy management programmes with the Energy Efficiency Conservation Authority (EECA) aimed at reducing carbon emissions. They will be interested to see how the review could potentially affect their operations, as will the many small and medium-sized agri-businesses, including farms, within the red meat sector. As with every other New Zealand household, farm households will be also subject to the same carbon tax costs passed on to consumers by organisations, such as petrol and energy companies.

Agriculture’s predominantly methane biological emissions, however, have not been included in the scope of the review. “The Government has previously said it would only bring biological emissions from agriculture fully into the NZ ETS if there were economically viable and practical technologies to reduce these emissions,” said Groser.

“We are putting considerable investment in research and development to find new options to reduce agricultural emissions and we will continue to work with the agricultural sector to enable and incentivise the sector to adopt new mitigation options as they become available.”

Forest owners question omission of agriculture from scheme

Forest owners welcoming the NZ ETS review, which they say gives much more long-term policy certainty for their sector, say the revised scheme may boost carbon forestry, but are among those questioning how agriculture could be ruled ‘out of scope’. The Forest Owners Association (FOA)’s chief executive David Rhodes says it is also contrary to the recommendations of the government’s own 2011 independent review of the NZ ETS, which envisaged agriculture being slowly phased into the scheme.

“All investors in land in New Zealand need to be given the same market signals about their role in reducing emissions. This includes those aspects of the ETS that encourage forestry. It is important that land owners – who can be farmers – factor in carbon as an income stream additional to that from the eventual log harvest,” he says.

FOA is calling for the phase out of subsidies to emitters and for carbon price stability.

What’s next?

Technical notes will be published in early 2016 to support and inform decisions. The review will involve research, analysis and stakeholder engagement. Officials will report to Ministers on the review in 2016.

A discussion document New Zealand Emissions Trading Scheme Review 2015/16 – primarily aimed at businesses, iwi, the forestry sector, energy users and non-governmental organisations – sets out the key issues for consideration under the review, which has been released on the Ministry for the Environment’s website. Since June, it notes, the NZ ETS is dealing only with domestic emissions, rather than including international.

Submissions are called for in two stages: the first stage focusing on priority issues, closes on 19 February 2016 and the second on other matters, closes on 30 April 2016. Submissions can be made online by emailing nzetsreview@mfe.govt,nz or writing to the Ministry for the Environment PO Box 10362, Wellington 6143.

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