New Zealand proposes the introduction of GHG tax for farmers

New Zealand is proposing to tax farmers for greenhouse gas emissions (GHG) produced by livestock, in order to meet its 2030 methane reduction target.

The agricultural emission scheme is likely to be introduced in 2025. Monies collected from the tax will be invested in new farming technologies, research and incentives for farmers.

Prime Minister Jacinda Ardern announced the plans at a press conference on a dairy farm in Wairarapa, North Island.

“New Zealand’s farmers are set to be the first in the world to reduce agricultural emissions, positioning our biggest export market for the competitive advantage that brings in a world increasingly discerning about the provenance of their food,” said the Prime Minister.

New Zealand’s largest exports are agricultural and include dairy and meat. Almost half of the country’s greenhouse gas emissions are caused by farming, with the main culprits being methane produced by the digestive system of farm animals and nitrous oxide found in their urine.

Farming groups have criticised the proposal, fearing the tax will force them to sell their cow and sheep farms which will then be turned into forestry. Lobby group Federated Farmers’ president Andrew Hoggard said that the scheme would “rip the guts out of small town New Zealand.”

Under the new proposals, farmers with a certain livestock size and fertiliser usage will need to pay a levy set every three years by the government, following a consultation with the Climate Change Commission and the farmers themselves. The price will be linked to the decrease of New Zealand’s methane emissions, currently set at a 10% reduction to be achieved in the next eight years.

The proposal will go into consultation before it can become legislation.