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Briefing: Climate Change Response (Emissions
Trading Scheme Agricultural Obligations)
Amendment Bill – Material to support the Second
Reading
Purpose
1.
This briefing provides you with material to support the Second Reading on the Climate
Change Response (Emissions Trading Scheme Agricultural Obligations) Amendment Bill
and sets out next steps to progress the Bill.
2.
In preparation for Second Reading scheduled for week commencing 5 November, we
have attached:
a.
Appendix A: Primary Production Select Committee Report,
b.
Appendix B: draft Second Reading Speech, and
c.
Appendix C: draft Second Legislative Statement.
Background
3.
The Climate Change Response (Emissions Trading Scheme Agricultural Obligations)
Amendment Bill (the Bill) was considered by the Primary Production Committee (the
Committee) from 1 July – 24 October 2024. The Committee reported back to the House
of Representatives on Thursday, 24 October 2024. The Committee recommended by
majority that the Bill be passed without amendment.
4.
The Ministry for the Environment and the Ministry for Primary Industries joint
Departmental Report also recommended that the Bill be progressed without amendment.
5.
Public submissions on the Bill opened on 1 July 2024 and closed on 28 July 2024.
During the submissions process the Committee received a total of 581 submissions.
Approximately 65% of total submissions supported the Bill, 30% opposed the Bill, and
5% of submissions were uncertain or out of scope.
6.
We last provided you an update with the draft Departmental Report on Thursday, 5
September. The key arguments in support of the Bill raised by submissions included:
emissions leakage, NZ ETS is not fit for agriculture, agriculture is an important sector,
methane science and target considerations, consistency with split gas approach, and
impact on competition.
7.
Key arguments raised by submissions against the Bill included: climate change
concerns, fairness and equity, NZ ETS is a sufficient framework, retaining NZ ETS
obligations, climate change targets, international reputation and market access, and
Crown obligations under Te Tiriti o Waitangi | the Treaty of Waitangi.
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8. The purpose of this Bill is to remove agriculture from the NZ ETS, and given the
Government’s emission reduction commitments, including those set out in the draft
Second Emissions Reduction Plan, officials do not recommend any changes to the Bill.
9. Officials provided both written and oral advice to the Committee to support their
deliberations. All written advice provided to the Committee has now been published and
is available on the New Zealand Parliament website, link here.
Primary Production Committee Report
10. The Committee’s report (the Report) includes differing views from both the Labour Party
and the Green Party of Aotearoa New Zealand.
11. The Labour Party’s differing views on the Bill were articulated during the First Reading
Speech, throughout Committee deliberations, and in the Committee’s Report. In the
Report these views include:
a. The Bill exacerbates climate change impacts and is at odds with our
international obligations to reduce emissions;
b. The Bill may “jeopardise” New Zealand’s free trade agreements;
c. There needs to be an innovative replacement policy proposal that will give
farmers certainty, and this Bill does not provide that; and
d. The Government has communicated a broader plan of pricing agricultural on-
farm emissions by 2030, but this is a challenging timeframe to meet. The
Government’s reliance on technology to reduce methane emissions has time,
affordability, and scale issues for farmers.
12. The Green Party of Aotearoa New Zealand’s differing views on the Bill were also
articulated during the First Reading Speech, throughout Committee deliberations, and in
the Committee’s Report. In the Report these views include:
a. Agriculture is a significant contributor to New Zealand’s emissions profile;
therefore, it is inequitable to the other sectors of the economy that the
agricultural sector continues to be exempt from emissions pricing;
b. The Bill removes incentives for farm-based emissions management and
recording and understanding of emissions;
c. The Bill undermines New Zealand’s climate change targets and obligations,
and therefore will have adverse impacts to the country’s international
reputation; and
d. Removing agriculture from the NZ ETS implies either more rapid and
disruptive future action or decoupling New Zealand from the global
commitment to climate action.
13. Officials will provide further information to support you in the Committee of the Whole
House stage in response to these differing views.
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Next steps
14. Progressing the Bill to law requires the following stages:
a. Second Reading (scheduled week commencing 5 November),
b. Committee of the Whole House,
c. Third Reading, and
d. Royal Assent.
15. We understand that the Second Reading is likely to occur next week, however the dates
for the remaining steps are yet to be scheduled. Officials have discussed with your
office, and understand that your office will lead on scheduling in coordination with the
Minister of Agriculture and the Office of the Clerk of the House of Representatives.
16. The Bill needs to be passed by the end of this year to prevent surrender obligations for
agricultural activities taking effect (currently legislated for 1 January 2025) and ensure
that agriculture is removed from the NZ ETS in accordance with priority 11 in the
Government’s quarterly plan.
17. We have provided a draft Second Reading Speech and a draft Second Legislative
Statement to support you at the Second Reading stage, see
Appendix B and
Appendix
C.
18. Officials remain available to support your Office as required and are working on
preparations for the Committee of the Whole.
Recommendations
19. It is recommended that you:
a.
Agree, in consultation with the Minister of Agriculture as appropriate, to arrange
dates and times with the Office of the Clerk of the House of Representatives to
progress the Climate Change Response (Emissions Trading Scheme Agricultural
Obligations) Amendment Bill through final stages to Royal Assent.
YES / NO
b.
Forward a copy of this briefing to the Minister of Agriculture.
YES / NO
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Signatures
Mark Vink
General Manager, Markets
31/10/2024
Hon Simon WATTS
Minister of Climate Change
[Date]
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Appendix B: Draft Second Reading Speech
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