Submission: Climate Change Response (Emissions Trading Reform) Amendment Bill

This Bill was introduced last year to amend the Climate Change Response Act 2002. It aims to improve certainty for businesses, make the New Zealand Emissions Trading Scheme more accessible, and improve its administration. It has now passed into law.

We continue to support development of a predictable transition pathway for reducing carbon emissions for New Zealand agriculture, so that New Zealand has the best chance of maintaining its successful export industry in an increasingly unpredictable international trading environment. Clear signals, and consistency in approach, allowing certainty for investment, is critical to a successful transition for the agricultural sector.

"We believe that farmers and growers should have choice about the most effective way of managing emissions on their land," said Vera Power, Chief Executive of the Fertiliser Association.

"We continue to support farm scale accounting for greenhouse gas emissions, including nitrogen fertiliser."

Nitrogen fertiliser is an integral part of the farm system and most importantly, is the driver of feed for livestock. Its role in the nutrient and feed cycle drives other farm decisions, which impact on farm greenhouse gas emissions.

Farm level accountability means that farmers and growers can have an integrated view of the impact of greenhouse gas emissions from fertiliser as part of their overall emissions.

Mandatory farm scale environmental reporting is already, or very soon will be, a requirement for most New Zealand farms including horticultural and arable farms, to achieve water quality targets through regulation.

"Farm level accountability fits with the intent of the He Waka Eke Noa proposals," commented Vera.

"There appears to be a conflict between the intent of He Waka Eke Noa to have a farm level system for managing greenhouse gas emissions, and how government proposes to implement it in the current proposals."

Robust systems of farm accountability will need to consider impacts of both greenhouse gas and emissions to water.

It's unclear how work to build and deliver a system for estimating and benchmarking farm level greenhouse gas emissions will be effective if it doesn't consider the emissions associated with fertiliser, as part of the farm nutrient cycle which drives greenhouse gas emissions.

It's also unclear how Farm Environment Plans would be effective if they don't consider fertiliser greenhouse gas emissions as well as emissions to water.

"Farm level accountability would give farmers and growers choice as to how they might offset their fertiliser emissions with mitigations on farm," said Vera.

Farm level accountability avoids duplication of administration and risk management costs. Under the current proposals, the overall costs to the primary industry sector will be increased by requiring a separate layer of reporting at supplier level for nitrogen fertiliser, and at farm level for other farm-based emissions.

The proposals for a supplier level 'greenhouse gas price' added to the price of fertiliser will largely be invisible to the farmer and grower. The proposal will therefore, impose considerable administrative cost, but will have limited affect on the choices farmers make.

The industry recognises the costs and difficulty of implementing an on-farm accounting mechanism, and is well placed to assist with addressing the administrative challenge of farm level accountability of nutrient losses, including greenhouse gas emissions.

"Phase down of any free emission allocation for agriculture should be linked to realistic options and opportunities to make genuine farm greenhouse gas emissions reductions and greenhouse gas emissions efficiencies," said Vera.

Read the submission