The Kapuni gas production plant is nestled in South Taranaki farmland. Photo: RNZ / Robin Martin
A plan to capture and store carbon dioxide from the Kapuni gas field has been formally dropped from the government's calculations to reduce emissions.
The government is also in danger of missing its legal target to reduce methane emissions by 10 percent by 2030, new data shows.
However, New Zealand is still on track to meet its next overall greenhouse gas budget, despite multiple climate policies being slashed and cow numbers increasing - mostly because trees are soaking up more carbon than previously expected.
Consultation on changes to the government's emissions reduction plan, which sets out how New Zealand will stay within its five-yearly emissions budgets, close today.
The government has already said it will go ahead with one of the changes it is consulting on - cancelling a plan to charge for agricultural emissions.
New Zealand needs to produce less than 305 million tonnes (Mt) of greenhouse gas emissions to stay within its 2026-2030 emissions budget, in order to meet our domestic and international targets.
Government policies were expected to save 3.2Mt of emissions, but recent changes mean that has fallen to just 1.2Mt.
However, updated 'baseline' emissions - what the country emits and saves before new policies are taken into account - mean total emissions will squeak in at 300.5Mt.
The emissions savings are in spite of removing Todd Energy's previously planned carbon capture and storage project from calculations.
The scheme, the first of its kind in New Zealand, would have condensed emissions produced by Kapuni and stored them underground. It was expected to save nearly 1.1Mt in emissions between 2026 and 2030, and another 2.3Mt between 2031 and 2035.
But the company said earlier this year that changes in circumstances meant the high cost of building a carbon capture and storage facility was no longer worth it without government investment.
That statement appears to have prompted the decision to remove carbon capture and storage from the calculations altogether.
"The Todd group has publicly stated it does not intend to pursue carbon capture and storage at Kapuni, citing gas scarcity and the NZ ETS price," the consultation document said. "As a result, 2025 projections no longer assume abatement from [carbon capture and storage]."
The document hedged on removing carbon capture from the emissions plan itself. "This will be kept under review as legislation progresses to make the pathway for CCUS possible in New Zealand," it said.
The same gas scarcity that Kapuni gave as a reason for cancelling its plans has also helped to ensure emissions are now lower than they were when the plan was first put together last year. With less gas available to burn, the country will produce fewer emissions from that source.
However, the biggest reason for the drop in emissions is that trees are now expected to soak up nearly 10 percent more carbon dioxide between 2026 and 2030 than originally projected - about 5Mt.
That makes up for an extra 4.8Mt of emissions that are now expected from agriculture.
Farms were adopting emissions-reducing agritech faster than expected, the consultation document said - but that was being offset by an unexpected increase in livestock numbers, especially dairy herds.
Extra carbon removal from forestry will soak up higher than planned emissions from agriculture. Photo: RNZ / Kate Newton
The emissions plan amendments also remove agricultural emissions pricing. The government had planned to introduce pricing from 2030 but announced in October that it would no longer go ahead.
The latest projections were done before that announcement, but even then showed the 2030 target to reduce methane emissions by 10 percent from 2017 levels was at threat.
"Biogenic methane emissions are projected to be 7.9 per cent below 2017 levels in 2030, although achieving the 2030 biogenic methane target is [still] within the projected uncertainty range," the document said.
The 2030 target is part of New Zealand's climate law, as a stepping stone to the main 2050 methane target - which the government announced last month it will lower.
Independent carbon market expert Christina Hood said it was "startling" that the government was putting forward an emissions plan that fell short of the 2030 target.
"Emissions pricing is a really powerful policy tool and taking that off the table is not going to help the climate response."
Hood said the government should not effectively allow agriculture emissions to rise just because carbon removal from trees, or lower emissions from other sectors, had created extra wiggle-room.
"They've set a cap for ETS sectors, and effectively here they're stealing some of that cap to cover excess agricultural emissions, without being clear about that."
In a written statement, Climate Change Minister Simon Watts acknowledged that the projections showed New Zealand would fall short of the 2030 methane target.
"However it's important to note, that due to the uncertainty with projections there's a range of possible outcomes, including the potential that we can still meet this target."
The government had "increasing confidence" in mitigation tools available to farmers and high rates of uptake could contribute to long-term emissions targets, Watts said.
"The [emissions reduction plan] amendment consultation will also inform New Zealand's agricultural emissions approach, including to help to understand what other actions the government could consider taking to further support a market- and technology-led approach to reducing agricultural emissions."
Farming groups have expressed mixed views on whether there would be widespread adoption of methane-inhibiting technology once it became available.
Watts said he was confident the consultation met legal requirements, despite the government already deciding it would change the 2050 methane target.
"We are consulting on a proposed amendment to the second emissions reduction plan, to reflect the impact of the decision to remove agricultural emissions pricing on our plan to meet the second emissions budget.
"As the document outlines, we're confident that even with this change in approach, we can meet our second emissions budget."
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