Government’s Emissions Reduction Plan released

13/12/2024·3 mins to read

Government’s Emissions Reduction Plan released

The Government has released its Emissions Reduction Plan (ERP2) for the period 2026–30, which provides a framework for national climate policy.

ERP2 provides key policy signals that organisations across all sectors of the economy should consider when developing strategic and risk management plans. However, the ERP2 is limited to broad policy statements, so its full implications will depend on the detailed supporting information which is yet to be released.

Highlights include:

Aspect	Policy
Emissions Trading Scheme	All NZUs remain equal (no differentiation for forestry or vintage) Market governance to be strengthened Carbon Capture, Utilisation and Storage (CCUS) will be incentivised through improved regulation Recently announced moratorium on whole-farm forestry conversions for ETS to balance out “unintended effects” (see our article here) Reconsidering industrial allocation baseline review periods, to ensure investments in decarbonisation are not disincentivised
Financing	Developing a finance strategy and a sustainable finance taxonomy, aligning with global sustainability trends Investigating the potential of a biodiversity credits market Alignment with Australia
Technology and innovation	Ending the ban on gene technology outside the laboratory Removing barriers to innovation
Energy	Fast track approvals and Resource Management Act 1991 reform Offshore renewable energy regime by mid-2025 Update regulatory settings so the electricity system can cope with the shift to electrification, and do work to enable a “smarter electricity system” and ensure security of supply CCUS regime to be developed in 2025 Regulatory improvements to facilitate use of renewable gases (eg landfill gases) Establish a domestic ministerial woody bioenergy taskforce to identify strategic opportunities for bioenergy Explore more use of geothermal energy Hydrogen Action Plan
Building and construction	Expand voluntary energy performance rating scheme to cover more types of non-residential buildings and make retrofitting easier Contribute to improving emissions data for products, materials and buildings
Transport	Network of 10,000 public EV charging points by 2030, including through facilitating private investment in EV charging infrastructure Moving all light vehicles to the road user charges regime (currently only applies to diesel and electric vehicles) and away from fuel tax, by 2027 Introduce legislation to set up time-of-use schemes, to enable congestion charging Addressing some barriers to low and zero emissions heavy vehicles Facilitate aviation and shipping industry discussions about decarbonisation and keep abreast of international developments Targeted public transport investments
Agriculture	Investing to accelerate the development and commercialisation of tools and technologies to reduce emissions Fit for purpose regulation of agricultural and horticultural products Seek recognition of the use of emissions-reduction tools in the New Zealand Greenhouse Gas Inventory, so that efforts on-farm contribute to our international targets Provide access to advice on farming system approaches to assist with sustainability practices and navigating climate, water and environmental requirements Considering methane science and target Implementing pricing system for on-farm emissions by 2030
Forestry and woody processing	General statements about restoring confidence in the ETS to give certainty to forestry, with specific policies to balance productive land use between forestry and agriculture and to balance forestry and the environment General statements in support of boosting wood processing and the supply of woody biomass
Non-forestry removals	Developing a framework to recognise non-forestry removals, assess which categories are ready to be recognised and identify any gaps
Waste	A proportion of the Waste Minimisation Fund is expected to target infrastructure projects and systems that reduce organic waste and emissions Regulated product stewardship scheme for refrigerants from 2025
Mitigating impacts on households and economy	Returning proceeds of New Zealand Unit auctions to low- and-middle-income households through income tax bracket adjustments Financial and retraining support Māori Climate Platform Implementing adaptation goals: Goal 1: Sectors understand climate risks and opportunities as they reduce emissions. Goal 2: Actions to reduce emissions deliver adaptation co-benefits and avoid maladaptation. Goal 3: Efforts to reduce emissions build future resilience.

First Emissions Reduction Plan amended

The Government has simultaneously released an amended version of the first Emissions Reduction Plan, confirming its intention to discontinue actions initiated by the previous Government. The most noticeable shifts in approach are in the equitable transition, emissions pricing, transport and energy spaces.