O’Connor told the Herald it was still the Government’s intention to have an emissions pricing plan ready before Parliament wrapped up before the last sitting day but they were also considering other interim options that would raise funds for research and development.
He confirmed he had discussions with the sector about a fertiliser levy, which they said they did not want.
A levy would have applied per tonne of fertiliser, of which farmers use over 400,000 tonnes of a year.
“The idea of a levy that would have contributed to money for research and development was my idea of a possible good investment,” O’Connor said in response to questions from Act’s Mark Cameron in the House.
“The industry leaders have come back to me and said they don’t like that.
“We now have to sit down and work on the best way forward of following through with He Waka Eke Noa, but dealing with the dilemma that they don’t want to pay anything until they’ve worked out the full analysis of sequestration options.
“That will take some time. It will take more research and development. The issue is who will pay for that.”
The confirmation came after sector lobby group Beef + Lamb chair Kate Acland told The Country last week the Government was considering such a levy, which was also reported by Politik today.
Climate Change Minister James Shaw told the Herald it was “very unlikely” legislation around pricing emissions would be in place before the election so they were looking at other interim options.
“We haven’t ruled anything out. And we’re constantly talking to the sector about what the options are.
“There are a lot of calls from the sector to delay the introduction of the pricing scheme.
“But I think there is an expectation that the sector should be paying for its emissions somehow, from New Zealand society, and from every other sector of the economy that already does pay for their emissions.”
As part of global efforts to keep global warming below 1.5C, the Government has committed to a 10 per cent reduction in methane emissions from agriculture and landfills by 2030, going up to a 24-47 per cent reduction by 2050, compared to 2017 levels. It comes alongside a net-zero carbon emissions target for 2050.
A key plank in accounting for and bringing down carbon emissions is the Emissions Trading Scheme. This requires polluters to purchase carbon credits for each tonne of emissions they produce.
The scheme, introduced in 2008, included a carve-out for agriculture, which acknowledged the fact mitigation and offsetting of carbon was much simpler than for gases such as biogenic methane emitted from livestock (mainly cow and sheep burps) and nitrous oxide (fertiliser and excrement).
The industry-led He Waka Eke Noa seeks to develop a separate “split-gas” pricing scheme for agriculture, which would be the first in the world, but negotiations on this have stalled after the Government last year rejected their proposal.
While the Government tilted in the direction of the He Waka Eke Noa group, deciding to set the levy at the lowest possible price to reduce emissions, parts of the farming sector were unhappy with the rules around sequestration.
Contention also remains over that price within the Government and between the Government and the agricultural sector.
In December, the Government said it would look at broadening what would qualify as sequestration under the scheme, allowing farmers to get credits for more of their sequestration efforts.
The National Party supports a form of emissions pricing to get to net-zero emissions by 2050, and previously said it was leaning closer towards the He Waka Eke Noa position.
National Party agriculture spokesperson Todd McClay today told the Herald the party would be unveiling its emissions pricing proposal within the next month.
He said the He Waka Eke Noa process was “close to being over”, which he blamed on the Government rejecting their proposal last year.
He said National would not support a fertiliser levy, which he said would increase food prices. He would not give anything away about its proposal but said its main principles were to not push production offshore and to provide farmers options other than destocking.
