Emissions Requirements Continue to Evolve

From 2025, farmers will be issued an invoice accounting for their annual emissions, with potential discounts to be gained by using emission-reducing stock or planting trees. Currently, the farming sector are campaigning for a variety of vegetation – not just trees - to be counted as part of their emissions discount and there is disagreement about how much carbon is being sequestered by those trees. The Government has agreed to revisit which vegetation will be included for discounts.

In December, it was announced that fertiliser application will be excluded from carbon dioxide emissions that need to be paid for.

It is currently not clear how much every tonne of greenhouse gas emitted will cost. The farming sector has proposed price caps that the Government has not yet agreed to, but the Government has said it will provide a pricing plan for methane and nitrous oxide from 2025 to 2029. Initially released rates are not guaranteed to be locked in, and they will be flexible depending on how well New Zealand meets its climate goals.

The farming sector was not able to secure control over prices through an oversight board, as suggested by He Waka Eke Noa. Industry-set rates are not afforded to any other industries.

The Climate Change Commission continues to report recommendations to the government regarding goals and prices. The Government does not have to accept all recommendations from the CCC and remains open to making changes later. The Government can reject recommendations if there are socio-economic or political effects that they foresee as being problematic.

Rural Accountants is continuing to stay up to date with this situation as it develops so that we can advise our rural clients on their financial position and responsibilities related to their emissions.