Friday Flash, August 26, 2022
Over the last two weeks there has been a bit of activity on the He Waka Eke Noa front, just what I needed in the middle of calving. Two weeks back I was in on the regular Food and Fibre Leaders catch up with the Prime Minister and Ministers Shaw and O’Connor. The key talking point was HWEN, and the Ministers’ thoughts on it following their review of the proposal and also the Climate Change Commission advice. Not surprisingly the main topics were those covered by the Climate Change Commission in its report, that being how sequestration is dealt with, the proposed Fert Tax, and how the pricing works. By far most discussion was on that last point and as has been reported a previously discarded option was raised, called ‘Cap and Trade’. A workshop was held on this last week but this was the only one and it did not progress anywhere as consensus was unable to be achieved. So no, an alternative option to HWEN’s pricing scheme has not been in the works for months, there was a single workshop held on it. The Minister did happen to raise the idea in an off-the-cuff manner many months back. But officials never formally, or informally for that matter, came back to the group and said ‘you must look into this the Minister is super keen on it’. So there hadn’t been any work done on it.
So do I think the government will scrap HWEN and go with putting agriculture in the ETS? Nope. The CCC report actually showed how useless the ETS would be along with a Processor Hybrid system. Basically they have to do something at a farm level. So, I really don’t think they can credibly put the ETS up as an alternative. Anything other than a farm level system is just a tick box exercise to make it look like your doing something, but all you are doing is raising taxes, not reducing emissions.
But will they change the existing proposal? Without a doubt they will, but they will still call it HWEN even if they make wholesale changes. How much will they change? My guess would be a small amount but I could be wrong, as it will depend on who holds sway in the Cabinet decision. Will on-farm sequestration be counted? Yes, I think so, but maybe not via HWEN. Will there be a Fert Tax? I think there is a good chance that direct emissions from fertiliser will remain within the farm level system and not via a fert tax.
And what’s the Feds’ view? Well, a majority of the National Council decided in May to support the recommendations, that still stands. When the government comes out with its response, we will undoubtably review our position then in light of whatever they decide to pursue. If you have any questions, at this time of year it’s best to give me a call, if I’m not pulling a calf out, or picking one up I should be able to answer. Or if you want to pass on your thoughts talk to your provincial president.