Farmers and environment win with ETS amendments

The Government has promised that agricultural biological emissions will remain outside the Emissions Trading Scheme (ETS) until at least 2015.

This is a huge win for New Zealand's farmers.

It was part of a package of proposed amendments which will lessen the cost of the scheme on agriculture, encouraging growth.

It follows continued hard lobbying of Government by the Federation to ensure farmers are not being unfairly treated compared to their international counterparts.

Initial estimates by the Prime Minister of the cost of the previous government's ETS was around $30,000 for the average farmer. This is now substantially reduced.

The Government is to make three significant changes:

Delaying any decision on the entry of biological agricultural emissions to the ETS until the next review of the scheme in 2015. Current legislation would see biological emissions enter the ETS in 2015, regardless of whether cost-effective mitigation technologies are readily available, or other countries have moved to impose similar obligations on their own farmers.

Allowing offsetting of forests, so pre-1990 forests can be effectively moved to where it makes more sense for them to be. This marks a big step towards farmers and foresters managing their land in a way which sees land put to best use.

Transition measures currently in place to minimise the cost impact of the ETS are proposed to extend beyond this year. The measures include the one-for-two surrender obligation and the $25 tonne price cap. These are vital for New Zealand to mitigate against the effects of the inconsistent efforts on climate change among other countries.

Other proposals will improve the treatment of forestry under the ETS by allowing minor clearance of forest boundaries, extending the deadline for the filing of emission returns to six months and easing restocking requirements for predominantly indigenous regeneration or erosion control plantings of poplar and willow.

However, while these and other proposals are greatly appreciated, the Government is also proposing amendments which still require some attention, particularly a potential levy on vehicle licencing and some rules around forestry units.

The announcement compliments work already underway in the agricultural sector to look to reduce emissions.

Significant money has been invested in research, both domestically and internationally, through the Global Research Alliance on Agricultural Emissions, which involves 33 countries and was instigated by New Zealand Climate Change Minister Tim Groser.

Farmers also continue to invest and drive for improved farm productivity to produce more with less inputs and environmental effect. New Zealand farmers are already highly efficient comparded to other producers, so continued growth here will work to reduce global emissions.

Irrespective of agriculture's biological emissions, progress is being made in all aspects of the industry, because reducing emissions is simply good business.

Fonterra, for example, has a target of a 20 per cent reduction in emissions intensity right across its supply chain by 2020.

It is also important to note farmers, like other New Zealand business, currently pay for ETS carbon emissions, through carbon costs on fuel, energy and farmers' share of the carbon cost being paid by processors.

The draft legislation containing the changes should be tabled in Parliament later this year and Federated Farmers continues to work towards ensuring the best possible outcome for farming.