NZ farmers blindsided by proposed changes to ETS

Farmers have already pushed back over propsed changes to the emissions trading scheme. Photo / Wanganui Chronicle

Farmers have been blindsided by the Government's announcement on potential changes to the emissions trading scheme (ETS), which they said could accelerate the purchase of productive land for the conversion into forestry if implemented.

Federated Farmers and BusinessNZ have also hit out at the short, two-month, window for submissions to the proposals.

New Zealanders have also been asked to share their views on a provisional emissions budget for the period 2021-2025.

The Government proposed lifting the current fixed-price option by $10 to $35 a tonne for emissions produced in 2020, but then replacing that with an auction floor price of $20 a tonne and a cap at $50. The consultation period finishes on February 28.

"Major announcements on potential changes to the ETS, and a consultation period shortened by the summer break, are not a Christmas present farmers will appreciate," Federated Farmers said.

"Apart from the unfortunate timing, we're concerned that limiting the number of emission units in the system and doubling the carbon price cap to $50 per tonne will accelerate the purchase of productive pasture land for blanket pine forest 'carbon farming'," Federated Farmers climate change spokesman Andrew Hoggard said in a statement.

Hoggard said the proposals announced should have been carefully considered by the new independent Climate Change Commission.

Farmers would also have preferred discussion on options for tree planting that don't come at the expense of prime sheep and beef land, he said.

"We'd like to talk about accounting under the ETS of trees planted already - and into the future - in shelter belts, riparian strips and smaller woodlots," Hoggard said.

"With recognition of these options there's great potential for additional carbon sequestration without the undermining of livestock production capacity and the hollowing out of rural communities," he said.

"Right now, we're working to reform the Emissions Trading Scheme to better translate our emission reduction targets into a predictable emission price. That will incentivise our biggest polluters to invest in the transition to a clean, green economy," Climate Change Minister and Green Party leader James Shaw said in this week's statement.

BusinessNZ chief executive Kirk Hope said the February 28 deadline placed additional responsibilities on the people and organisations involved in the process, just days before Christmas.

"Businesses are already responding to other draft regulatory changes that will be related to ETS settings, including climate-related financial disclosures, ETS auction rules and others.

"Meanwhile, other relevant pieces of work including the draft Resource Management Act replacement are not yet available for consideration," he said in a statement.

"The process of working towards a better suite of environmental laws and regulations is being handled in a piecemeal and disorderly way," he said.

"Many people and businesses will be impacted by this sub-optimal approach to law-making."

BusinessNZ will seek an extension to the deadline for reforming the scheme.

- Staff Reporter