(Bloomberg) -- New Zealand confirmed the agriculture sector, which accounts for about half the nation’s greenhouse gas emissions, will be excluded from a national carbon pricing system. 

Farmers had protested against previous proposals to impose a regulated price on methane, carbon dioxide and nitrous oxide emissions from late 2025, arguing it would force some in the industry off their land.

“The government is committed to meeting our climate change obligations without shutting down Kiwi farms,” Agriculture Minister Todd McClay said Tuesday in Wellington. “It doesn’t make sense to send jobs and production overseas, while less carbon-efficient countries produce the food the world needs.” 

A new group will be established to develop strategies to limit the industry’s pollution, according to McClay. 

Prime Minister Christopher Luxon’s center-right government was elected in October on a platform that included a pledge to delay the introduction of a regulated price on farm emissions until at least 2030. His administration also intends to lift a ban on offshore oil and gas exploration that’s been in place since 2018.

“Our bottom line is that we do not support a price on agricultural emissions as a way of achieving reductions,” said Kate Acland, chair of Beef + Lamb New Zealand, an industry group. “There is absolutely no justification for a price. This is a non-negotiable for our farmers.” Farm products comprise 44% of New Zealand’s total exports.

A process established under New Zealand’s previous government to help the agriculture sector measure and manage all farm emissions will be replaced with a new group focused on tackling biogenic methane, McClay said.

For climate data about New Zealand, click here

Methane released by sheep, cows and other animals contributed about 42% of New Zealand’s gross emissions in 2022, according to government data. Additional investment will be targeted at technologies such as a methane vaccine, breeding lower emissions cattle and methane and nitrous oxide inhibitors.

“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,” McClay said.

©2024 Bloomberg L.P.