Government announces delay to agricultural emissions pricing, Climate Change Minister James Shaw refuses to support plan

The Government says it's going ahead with proposed plans to price agricultural methane emissions, but is making further changes including a delay to when the scheme kicks in.

However, the plan won't be supported by the Government's own Climate Change Minister - Green Party co-leader James Shaw.

Agriculture Minister Damien O'Connor said in a statement pricing would now start in the fourth quarter of 2025. The original proposal was for pricing to start in the first quarter of that year.

The Government first released the plan in October, when Jacinda Ardern was Prime Minister. Confirmation the plan will go ahead makes New Zealand the first country to charge farmers for emissions.

But the plan going ahead in the format announced on Friday could depend on October's election, given it's previously been widely criticised by the Opposition and the agriculture sector.  

"Future export growth for our food and fibre products will depend on demonstrating their sustainability credentials. The decisions announced today set out a path that gives farmers certainty and addresses the ever-strengthening market signals from overseas on climate," said O'Connor on Friday.

"The reality is, Government required or not, our agriculture sector will have to adapt over the coming years and reduce emissions. It's a fact of business in the 21st century, but with the support of [the] Government, we can make that transition in a pragmatic way with the sector."

Shaw was refusing to support Labour's plan, saying it left "too much to chance".

"In my role as the Minister of Climate Change, I have made clear to my Labour colleagues why I do not support their preferred option for pricing agriculture emissions. We have agreed to disagree."

Shaw cited the plan having no cap on agriculture emissions, Cabinet pricing the emissions itself and its promise to keep pricing as low as possible and it being "weak enough that it could be easily dismantled by any future Government" as his reasons for not supporting it.

"Only the Green Party has a credible plan for what we should do next," he said.

"We need to learn from what works for pricing emissions in all other sectors in Aotearoa and apply the same basic principles to agriculture."

The Opposition National Party last year said it would back He Waka Eke Noa - a group made up of industry leaders trying to put the pricing on agriculture emissions. However, National pulled its support for the group in June.

"We've been having conversations with the sector about that for the last year or so but, sadly, what happened was the industry worked for two years to get a consensus together [and] gave it to the Government," National leader Christopher Luxon said earlier this year. "Then the Government went and blew it all up and, as a result, there isn't any consensus around what He Waka Eke Noa actually is any more."

National subsequently announced it wouldn't require farmers to pay for agriculture emissions until 2030. 

In addition to the pricing delay, O'Connor said the Government was recommending holding back mandatory reporting of farm-level emissions - legislated for January next year in the Climate Change Response Act 2022 - to the end of 2024. 

"We're proposing an Order in Council be approved, prior to January 1, 2024, to defer those provisions and public feedback is being sought on the proposal over the next few weeks.

"We believe it's crucial that work continues with the sector and Māori on the development and implementation of an alternative pricing system that's fit for purpose."

The Government has opened the deferring of emissions reporting requirements for public feedback, which closes on September 6.