New Zealand scraps ‘burp tax’ on livestock after backlash from farmers

Centre-right coalition gov’t says it will focus on ‘practical tools and technology’ to reduce agricultural emissions.

New Zealand has scrapped plans for a so-called “burp tax” aimed at lowering greenhouse gas emissions from sheep and cattle.

The country’s centre-right coalition government said on Tuesday it would exclude agriculture from the country’s emissions trading scheme in favour of exploring other ways to reduce methane.

The move, which fulfils a pre-election pledge by former businessman Christopher Luxon’s National Party, comes after the plans to tax agricultural emissions from 2025 led to nationwide protests by farmers worried about the effect on their livelihoods.

“It doesn’t make sense to send jobs and production overseas, while less carbon-efficient countries produce the food the world needs,” Agriculture Minister Todd McClay said in a statement.

“That is why we are focused on finding practical tools and technology for our farmers to reduce their emissions in a way that won’t reduce production or exports.”

The coalition, which also includes the pro-business ACT New Zealand and populist New Zealand First, said it would invest 400 million New Zealand dollars ($245m) in the commercialisation of emissions-reduction technology and increase funding for the New Zealand Agricultural Greenhouse Gas Research Centre by 50.5 million New Zealand dollars ($31m).

The previous Labour Party government announced the “world first” levy in 2022 as part of Wellington’s efforts to reach net-zero greenhouse gas emissions by 2050.

Nearly half of New Zealand’s greenhouse gas emissions come from the country’s estimated 10 million cows and 26 million sheep.

Then-Prime Minister Jacinda Ardern argued that the tax was necessary to slow global warming and farmers would be able to recoup the costs by charging more for climate-friendly meat.

The Greens, the third largest party in parliament, said on Tuesday that the government had once again “kicked the climate action can down the road”.

“From pouring oil, coal and gas on the climate crisis fire, the Government has now put half of our emissions which come from agriculture into the industry-led too-hard basket,” Greens co-leader Chloe Swarbrick said in a statement.