While the entry date for the industry having to purchase units to cover livestock emissions has been delayed, the reporting requirement has not. The Ministry is having trouble making the reporting methodology work and so want to make changes.
Emissions were to be calculated on a per head basis working out the emissions produced by an animal as it produced either meat or milk or both. It was all very clever and complex with animals emissions divided up between its various functions. Emissions produced for growth would be accounted for at slaughter, along with the annual maintenance emissions of its dam. An animal had two emission factors, one per head and the other per kg. Emissions produced for milk production were and still are to be accounted for at the dairy processor.
As marvellous as this all was what they found was that the total emissions accounted for with this methodology bore no resemblance on a sector basis to the total emissions which are reported on an industry basis in the NZ Inventory of greenhouse gases.
The answer they have decided is to change from a bottom up system to a top down one. Instead of working out all the emissions produced for this and that, the total emissions per sector in the NZ Inventory for each sector are just divided by the output of that sector.
The sheep industry will see emissions produced for wool production separated from meat. Currently wool is ignored because they can’t figure out a point of obligation for it, and all the sheep’s emissions go to meat which consequently overstates sheep meat emissions. Removing these emissions produced for wool will mean the emissions for sheep meat production will drop by 40 %. The wool industry will pick up these emissions but they will not be required to report and pay for them because the Ministry hasn’t been able to figure out a ready point of obligation. This means a net drop in ETS liabilities for sheep farmers.
It is incongruous that they don’t want to overstate sheep meat emissions but seem quite happy to overstate goat meat emissions. Goat and sheep milk production is being exempted from reporting because they don’t know how much goat and sheep milk is produced in NZ and therefore do not have enough information about these industries to be able to use the top down system. ( I wonder why they don’t just ask them? ) All goat and sheep emissions will be accounted for at slaughter. I don’t know what a cull goat is worth, but it will be worth a lot less now.
The system of two emission factors for meat, one per head and one per kg is being replaced with one emission factor of 12.7 kg CO2e per kg. This system rewarded bigger animals because it resulted in lower emissions per kg. This will no longer apply.
Milk production emissions increase by 26% to 8.5 kg CO2e per kg MS (from 6.14) because all the maintenance emissions of the cows which were previously assigned to the calf and accounted for when the progeny were slaughtered are transferred to milk production. The beef industry’s emissions reduce as a sector because of this although it will be of no impact at farm level.
The Ministry also propose some changes to the egg industry but the Government has since announced the egg industry will join the horse industry in being exempt from the ETS.
The horse industry was always going to be exempt from the ETS because they can’t figure out how to collect the money from horse owners. Egg production is being made exempt because they can’t figure out how to administer it economically, (not much money involved but lots of admin).
You can see the consultation document here.
View the consultation document
If you want to make a submission you only have till Friday. I don’t see anything really contentious here, nor am I particularly bothered. As far as I am concerned they are all a bunch of chumps and devising a complex system that doesn’t work seems to be a particular skill of theirs. I have maintained all along that they don’t understand livestock emissions and they tangle themselves up in knots and inconsistencies abound whenever they try to deal with them. There is a lot they can’t figure out, despite spending years of time and millions of dollars on it.
The changes have to be made by the end of the year so as usual it is all very rushed. Give me a call if you want any information about this.
Robin