Farmers Achieving Methane Reduction Targets Without Tax Burden, McClay Says

Agriculture Minister Todd McClay hailed the data as a significant milestone for the primary sector, which remains a cornerstone of the national economy.

New figures released today show that New Zealand’s agricultural sector is on track to meet its 2030 biogenic methane emissions target, reinforcing the government's decision to abandon the controversial He Waka Eke Noa pricing framework and remove agriculture from the Emissions Trading Scheme (ETS).

According to the Ministry for the Environment’s latest Greenhouse Gas Inventory (1990–2023), agricultural emissions in New Zealand fell by an additional 2 percent in 2023. This builds on earlier progress and keeps the country on track to achieve a 10.1 percent reduction in biogenic methane emissions by 2030 — a key international climate commitment.

Agriculture Minister Todd McClay hailed the data as a significant milestone for the primary sector, which remains a cornerstone of the national economy.

“New Zealand farmers are among the most carbon-efficient food producers in the world,” McClay said. “These latest results prove that Labour’s failed He Waka Eke Noa was not needed, and it validates our decision to take agriculture out of the ETS.”

Methane Reductions Achieved Without Penalising Farmers

Biogenic methane — a short-lived greenhouse gas primarily emitted by livestock — is a major focus of New Zealand’s climate strategy due to the country’s large agricultural footprint. Despite accounting for nearly half of the nation’s emissions profile, the sector has managed to achieve reductions without the imposition of a methane tax or pricing scheme.

Minister McClay credited the progress to the hard work and commitment of New Zealand’s farmers and rural communities, as well as their uptake of technological innovations and improved farm practices.

“This latest emissions reduction was achieved without Labour’s proposed taxes or a price on methane,” he said. “I want to sincerely thank our farmers for their leadership and innovation.”

Support for Science Over Land Conversions

While celebrating the progress, McClay also issued a warning about how New Zealand should not go about achieving its climate goals. He expressed concern over the loss of productive farmland to large-scale forestry projects and reiterated the government’s stance against full farm-to-forest conversions as a primary climate tool.

“New Zealand cannot afford to reduce emissions by simply planting over food-producing land or by further cutting stock numbers,” McClay said.

To provide farmers with better alternatives, the government is committing $400 million towards agricultural research, development, and innovation. This investment is designed to help the sector continue reducing emissions through improved technology, breeding, and on-farm practices rather than through land use changes that could undermine food security and rural employment.

Legislation to Protect Productive Farmland

As part of its strategy, the government will introduce new legislation later this year to restrict full farm-to-forest conversions, a trend that has sparked concern in rural communities over the past decade. The upcoming legislation aims to strike a balance between environmental stewardship and economic resilience by protecting food-producing land while enabling science-based climate solutions.

Primary Sector's Vital Role in NZ Economy

The agricultural sector is vital to New Zealand’s economy, accounting for more than 360,000 jobs and $58 billion in annual export revenue. The government has maintained that any climate policy must preserve the viability of this sector while supporting emissions reductions in a way that does not compromise food production or livelihoods.

“The Government is committed to meeting New Zealand’s climate obligations without shutting down farms or shifting emissions overseas,” McClay said. “We will continue to back our farmers with the tools they need to succeed — not penalise them with extra costs.”

As New Zealand continues its transition toward a low-emissions economy, the government says its approach will be grounded in science, innovation, and respect for the rural communities that have long been at the heart of the nation's prosperity.

Background: Methane and New Zealand’s Climate Targets

Biogenic methane, primarily from ruminant livestock such as cows and sheep, differs from long-lived gases like carbon dioxide. It breaks down in the atmosphere over a shorter period but contributes significantly to warming in the near term. Under the Zero Carbon Act, New Zealand has committed to reducing biogenic methane emissions by 10% below 2017 levels by 2030 and by 24–47% by 2050.

Today’s announcement reinforces the belief that with the right tools and support, the agricultural sector can lead in climate action while continuing to feed the world.