ETS snubs carbon captured by on-farm plantings

Text: Award-winning Northland beef farmers Jeff Martin and Helen Linssen want genuine recognition for the greenhouse gas emissions their farm's trees and vegetation are absorbing after decades of planting programmes on their Kaeo land.

They believe the He Waka Eke Noa (HWEN) pricing system rather than the Emissions Trading Scheme (ETS) is the right approach.

The HWEN proposal is being considered by Minister for Climate Change James Shaw.

According to his office, "the proposal from the He Waka Eke Noa partnership, alongside advice from the Climate Change Commission and officials, is currently being analysed and evaluated. That analysis will form the basis of Cabinet decisions on final options, due later this year, which will be subject to public consultation".

The Kaeo couple, 2020 Regional Supreme Winners in the Northland Ballance Farm Environment Awards, believe it is critical that when farmers start to face a price on their emissions from 2025, they get proper recognition for their sequestration - the carbon captured and stored in the stems, branches, roots and foliage of trees.

That is the approach proposed by HWEN, the 13-member climate action partnership including 10 primary sector organisations, Maori, the Ministry for Primary Industries and Ministry for the Environment.

Forests planted before 1990 are not eligible to earn units in the NZ ETS. However, the proposal from the He Waka Eke Noa partnership is for pre-1990 indigenous vegetation to be recognised as long as specific management activities, such as permanently eliminating browsing pests and predators, lead to additional sequestration on top of what is already happening without management. The Government is considering the He Waka Eke Noa proposal and how components such as sequestration can be considered, alongside the objectives of other government policies such as the ETS.

In June, HWEN released its recommendation report to the Government for a credible pricing system, as an alternative to agriculture being included in the ETS.

However, the Climate Change Commission has now proposed that non-ETS sequestration included in the HWEN proposal could receive recognition through an entirely separate system.

Industry bodies, including Beef + Lamb New Zealand (B+LNZ), have pushed back, pointing out it is vital that when farmers start to face a price on their emissions, they should get proper recognition for the genuine sequestration on their farms from day one.

"Many Northland farms and many sheep and beef farms throughout the country have land sequestering carbon. It is very important that be recognised," Martin said.

"A tremendous amount of work has gone into building the HWEN proposal. It required a lot of compromise to get all different parts of the industry together to produce something that everyone would sign.

"So it is frustrating to have the Climate Change Commission turn around at this late stage and raise the prospect of imposing something different. How long would that take?

"We have no confidence the Government will be able to put anything separate in place by 2025."

Martin and Linssen farm over three properties across a total of 450ha, with about 250ha effective for farming. Much of the rest is fenced and planted, including wetlands and riparian borders.

They have significantly changed their farming system to ensure they farm for climate resilience and the best environmental outcomes. This has included switching to a techno-grazing system of smaller paddocks, which are grazed only once every 60 days in winter, allowing soil structure to be maintained.

The difference between the two schemes would be significant for the couple, with about 200ha potentially affected depending on which scheme is adopted.

"We have some land we will be putting into ETS pine forestry. That is fine as an alternative source of income and mixed land use. But around 200ha of native vegetation would not qualify for the ETS but would be eligible for sequestration through HWEN," Martin said.

Under HWEN, emissions would be estimated and paid for at the farm level, with different rates for short-lived gases such as methane and long-lived gases such as nitrous oxide, as well as a small amount of carbon dioxide associated with fertiliser use. This approach recognises the different physical aspects of the gases on atmospheric warming. The ETS uses a broad-brush approach and does not differentiate between the different types of greenhouse gases.

"We have calculated our emissions using the B+LNZ calculator and the OverseerFM system and have established we are close to carbon neutral.

"Under HWEN, our carbon sequestration would be recognised and rewarded. If I have to pay for all of my emissions, I should get proper recognition for what is sequestering. If this is taken out, I know a lot of farmers that have reluctantly been on board with HWEN would revolt."

Andrew Morrison, chairman of Beef + Lamb New Zealand, said: "Our key priority is ensuring that when farmers start to face a price on their emissions in 2025, they get proper recognition for their sequestration from day one.

"We strongly believe the best way to achieve this is through He Waka Eke Noa as we don't think the regulatory change needed to give effect to the Climate Change Commission's proposal could be ready in time and we can't risk a gap. Farmers have told us it's currently very difficult to get post-1990 native vegetation in the ETS. While ultimately we'd like to improve the ETS, the reality is it will take many years to do this and there is a risk that the ETS would never include all the additional sequestration covered in He Waka Eke Noa.

"The Climate Change Commission has suggested setting up an alternative system to reward the wider environmental benefits of native vegetation like biodiversity. Again, while this would be great, we can't see how this could be in place by 2025. "We believe it would be much simpler and less costly overall to include sequestration in He Waka Eke Noa as this is already being set up - rather than trying to build a whole new separate system. There are tools out there already that allow farmers to measure their emissions and sequestration."

Shaw said the proposal from the He Waka Eke Noa partnership is for the two schemes to operate separately. Where forests are eligible for both schemes, farmers would need to choose which one they enter.

"The Government will refine how this will work in its response to the He Waka Eke Noa proposal later this year," he said.

"The precise details of a pricing mechanism for agricultural emissions are being worked through, including how sequestration could be rewarded. Through the He Waka Eke Noa Partnership, government has, and will continue to, work with the sector to ensure the final scheme is both workable and credible."