The BulletinJune 1, 2023

Running down the clock on agri-emissions pricing


Time is running out to nail down an alternative pricing scheme before the election. Ministers are said to be fed up with the lack of movement and the sector is calling for a delay, writes Anna Rawhiti-Connell in this excerpt from The Bulletin, The Spinoff’s morning news round-up. To receive The Bulletin in full each weekday, sign up here.

Legislation around pricing agricultural emissions before election ‘very unlikely’

Time races on. It’s now June and there are 28 sitting days left in parliament before the House rises before the election, including today. That puts increasing pressure on the government to get legislation through, with 31 bills currently at the select committee stage and nine at the second reading stage. They’re all of various sizes and scales and some may languish. There’s been speculation for a while that legislation around pricing agricultural emissions may not get through before the election. Climate change minister James Shaw said yesterday that it was “very unlikely”.

Questions around health of He Waka Eke Noa partnership

The government confirmed yesterday that its intention is to have an emissions pricing plan ready before parliament wraps up but agriculture minister Damien O’Connor also told Farmer’s Weekly last week that time is running out to finalise a system to price agricultural emissions. Questions remain about the level of pricing, how to recognise the various forms of sequestration and creating a single, internationally recognised emissions calculator for farmers to use. Speculation about the health of negotiations with the sector via the He Waka Eke Noa (HWEN) industry partnership ramped up yesterday with Politik’s Richard Harman reporting negotiations had broken down (paywalled) and a fertiliser tax would have to be imposed. National party agriculture spokesperson Todd McClay told the Herald yesterday that the HWEN process was “close to being over”.

Ministers said to be fed up with lack of movement 

There’s potentially a bit of playing chicken or “not budging lest ye be the first to budge” going on here but as BusinessDesk’s Riley Kennedy reports this morning (paywalled), sources have told BusinessDesk that the HWEN process stalled following the resignation of Jacinda Ardern as prime minister.  “While Ardern championed the initiative at the cabinet table, her replacement, Chris Hipkins, is said to have been far less engaged on its completion,” Kennedy writes. Ministers are said to be fed up with the lack of movement in the industry-led response to emissions reduction. Farming leaders have said rushing legislation through before the election will create issues and undermine the system’s credibility. If no agreement is reached by 2025, agriculture will enter the Emissions Trading Scheme.

Discussions on interim fertiliser tax

Talk of a fertiliser tax kicked off in the House yesterday with Act asking O’Connor whether he had had any official discussion with ministerial colleagues over a potential tax or levy. O’Connor has confirmed he had discussions with the sector about a fertiliser levy but the sector isn’t keen. Act took credit for “killing the idea” in its fifth and final press release of the day, yesterday afternoon. O’Connor’s rationale for introducing the idea is that the industry wants full analysis of the sequestration options which will require research and development resource. “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. “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,” he said. “The issue is who will pay for that,” he said.

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