Red meat sector says ETS proposals hold 'significant fish hooks'

The red meat industry is concerned about emissions trading scheme proposals. Photo / Thomas Bjorkan.

The red meat sector has expressed concern that emissions trading scheme proposals as they stood were unwieldy and would add unnecessary complexity, cost and confusion to the industry as a whole.

Justin Courtney, head of communications and sustainability at Silver Fern Farms said in its current form, the zero carbon Bill held "significant fish hooks".

"As it stands, processors would effectively have to set up a trading desk to manage ETS units, forecast livestock flows and then pass that cost through to the farmer, potentially with a rebate in that system which adds significant regulatory complexity.

"It's like a trading foreign exchange desk for us which is totally clouded from market signals which is that it is based on carbon demand, which as a price could be anywhere between $30 and $200. As a processor we have to manage that supply and demand.

"All processors would have to scale up to absorb that cost and pass it back to the farmer. That's not a market signal around the price of carbon, it's an administrative burden."

Meanwhile, the Meat Industry Association (MIA) has called on the Environment Select Committee to amend the methane target in the Bill, based on new analysis by Nicholas Leach of the University of Oxford, which by following the Government's conditions for limiting climate change to 1.5degC and net zero for all greenhouse gases except short-lived biogenic methane, shows the global biogenic methane reduction required by 2050 is 7 per cent - not the 24 per cent -47 per cent range picked by the Government.

Tim Ritchie, chief executive of the MIA said the report casts serious doubt over the methane targets in the current Bill.

"We believe that long-lived gases should reduce to zero by 2050 and short-lived methane reduced to a level where it has zero increased impact on the temperature.

"In its current form, the Bill will have a significant impact on New Zealand's regional communities and the country's largest manufacturing sector. We want a sector that is not contributing to increased global warming and we accept the need to address climate change using the best available science-based policy.

"Our sector is the county's second-largest goods exporter and we directly employ some 25,000 people. Given the potential enormous economic and social cost to New Zealand from the Bill's targets, it must get the numbers right", Ritchie said.

The MIA is also concerned about the long-term impacts of the net zero target for carbon dioxide emissions.

"This allows fossil fuel users to offset their carbon emissions by planting pine forest. We can't keep kicking this can down the road. At some point, Government or Parliament needs to address how much carbon emissions can continue to be offset by planting forest."