In 2015, New Zealand was due to make history by becoming the first country to include agriculture into its Emissions Trading Scheme (ETC). The decision to include agriculture in the ETS was initially made by NZ’s ruling Labour party in 2007 as a result of the huge (49%) contribution that agriculture makes to the country’s total greenhouse gas (GHG) emissions.
However, it was met with concern by NZ’s meat industry, which warned that it could be a death blow to a livestock sector already struggling in the face of rising costs. Speaking at the time, Beef and Lamb New Zealand (B+LNZ) chairman Mike Peterson told politicians that the proposed carbon price of NZ$25 per tonne of carbon would cost the average sheep and beef farmer NZ$40,000 a year, which he warned would be “unsustainable” for many operations.
So it was with great relief that the sector greeted a decision by the current National-led government last year to indefinitely exempt agricultural emissions from liabilities under the ETS. Under new legislation, passed in November 2012, agriculture will only become liable for its emissions if there are “economically viable and practical technologies for farmers to reduce emissions” and “NZ’s trading partners make more progress on tackling their emissions in general”. Progress towards these conditions will be reviewed in 2015.
“The start date for surrender obligations for biological emissions from agriculture has been removed because no other country in the world has a price on biological emissions from agriculture and, as yet, there are no economically viable and practical technologies for farmers to reduce their emissions,” explains Ben O’Brien, general manager, Market Access for B+LNZ.
However, O’Brien points out that livestock farmers and meat processors will not be completely free of responsibilities and liabilities under the ETS. “Importantly, farmers already face costs under the NZ ETS from stationary energy, liquid fuels and industrial processes. This includes charges relating to farm working expenses from petrol, diesel and electricity, as well as the transport and processing of farm products,” he says.
“The agriculture sector will still need to report on their emissions. Processors, mainly milk and meat processors, currently participate in the ETS as they must report emissions from 1 January 2012. The mandatory reporting of emissions is important and will continue at the processor level, but the government intends to move the point of obligation to farm level as soon as practicable.”
Some environmental groups in NZ have challenged the government’s decision, claiming that, as the biggest contributor to GHG emissions, agriculture must be included in the ETS. However, O’Brien points out that NZ farmers have made significant strides towards reducing their GHG emissions and are already well ahead of some international competitors in this area.
“The environmental footprints of beef and lamb have been examined through Life Cycle Assessments (LCA), and show that both beef production and lamb production in New Zealand compare favourably with international results,” he explains.
“From 1990 to 2010, greenhouse gas emissions from the combined sheep and beef sector decreased 17% through productivity gains. Over the same period, there was a reduction of 3.12 million tonnes of carbon equivalent a year, while total meat and fibre production increased 15%.
“Compared to 1990, New Zealand sheep farms produced slightly more lamb meat by weight from a 43% smaller national flock. Researchers estimate this productivity improvement has reduced the carbon footprint of New Zealand lamb by more than 20% over that period.”
These reductions have been achieved as a result of significant industry and government investment in strategic, large-scale research, aimed mostly at livestock emissions. “New Zealand is a signatory to the United Nations Framework Convention on Climate Change (UNFCCC) and has a target to reduce its greenhouse gas (GHG) emissions down to 1990 levels,” explains Mark Aspin, consortium manager for Pastoral Greenhouse Gas Research.
“However, we are unique among developed nations in that 46% of emissions are from livestock agriculture. Since 2002, industry and government have invested equally into research to develop mitigation solutions for reducing methane and nitrous oxide emissions from grazing ruminants.”
One of the main research initiatives is the Pastoral Greenhouse Gas Research Consortium, a joint venture between B+LNZ, other industry bodies representing the livestock sector and the NZ government. “Over the last 10 years, NZ$45m has been invested through PGgRc into a broad range of science areas to find cost-effective mitigation solutions that are appropriate to the New Zealand pastoral industry,” says Aspin.
The consortium has three key objectives:
• To invest in research to improve ruminant productivity;
• To develop solutions to reduce methane and nitrous oxide emissions from livestock;
• To position the sector to take advantage of international opportunities in the future.
“The investment has delivered steady progress and although a cost-effective mitigation for methane is still being developed, key steps have been made towards delivering that,” Aspin says.
According to Aspin, highlights of the research since 2002 include: the genome sequencing of the first rumen methanogen (rumen microbe that forms methane), which underpins efforts to develop a vaccine or inhibitors of methane-producing microbes; the development of a flock of low and high methane-emitting sheep, allowing exploration of the causes of natural variability and deriving genetic predictors that can be exploited for targeted breeding; the development of comprehensive methods for measuring and monitoring rumen microbial populations, enabling a more rapid assessment of intervention options; and progress towards developing methane inhibitory compounds and a vaccine against methanogens.
The focus for investment in the future will be on delivering options for farmers in animal breeding, low GHG forages, methane vaccines and inhibitory compounds that reduce methane. “Alongside this, the research will also be gaining a full understanding of the productivity effects of any of these approaches so that sustainable options for reducing GHG on farm can be identified and adopted,” says Aspin.
NZ’s meat processing industry is also making efforts to reduce its GHG emissions. In December 2011, one of the country’s biggest processors and exporters, ANZCO, embarked on a company-wide energy management programme with support from the Energy Efficiency and Conservation Authority (EECA).
The programme aims to reduce the company’s processing plant energy use by 25 GWh, which should lead to significant energy and cost savings across ANZCO’s 11 processing facilities. It includes the establishment of a group-wide energy management plan, led by a team responsible for putting in place up to $5m of identified energy efficiency projects, and the development of a system to measure energy efficiency outcomes.
Announcing the programme in 2011, EECA business general manager Ian Niven said: “Globally, New Zealand is recognised for sustainably produced, premium-quality meat products. And energy efficiency is one of the best ways to strengthen environmental credentials.
“By taking a lead in energy efficiency, ANZCO is making significant energy cost-savings and signalling to its customers that it is committed to sustainable production.”
Looking forward, it looks likely that GHG emissions and agriculture’s involvement in the ETS will continue to be a point of focus for both industry and government. However, the Meat Industry Association (MIA), which represents meat processors in NZ, points out that there has also been a shift in policy-makers’ attention towards water quality and consumpton. In 2011/12, the MIA co-funded the first water footprinting study of NZ red meat products, the report on which is still being finalised. The NZ industry is also participating in the government’s Land and Water Forum (LAWF), which aims to guide national water policy development.