Documents released by the Government on Thursday show a Cabinet committee has instructed officials to draw up new ways of cutting greenhouse gas emissions across the country’s biggest emitting sectors, and to bring the work back to the Minister of Climate Change only after the general election on 7 November.
The papers were published alongside the Government’s annual decision on emissions trading scheme settings. RNZ, which reported the contents on Friday morning, said the committee told officials to “identify and develop strategic options across major emitting sectors to support meeting the third emissions budget and to report back to the minister after the 2026 general election”.
The third emissions budget runs from 2031 to 2035. It is the most distant of the three carbon budgets currently written into law, and according to the released advice it is the one where the shortfall has grown widest since the Government changed course on farming.
New Zealand meets its climate targets through a series of five year carbon budgets, each one a hard cap on how much the country is allowed to emit. The emissions trading scheme is the main lever for staying inside them. It forces fuel importers, electricity generators, heavy industry and landfill operators to hand over units for the pollution they cause, and the cost flows through to petrol, power bills and building materials. Farming has never been inside the scheme, and the Government has now removed agricultural pricing from its plans altogether.
That leaves a sizeable hole. The advice to ministers noted that without agriculture the scheme covers only about 40 percent of the country’s greenhouse gases. “The ETS remains a major tool for meeting emissions budgets, but it is not expected to meet [them] on its own,” officials wrote, adding that “additional options to support and encourage emissions reduction and removals across major emitting sectors will be needed”.
The other change officials pointed to was the 2050 methane target. In December 2025 Parliament passed the Climate Change Response (2050 Target and Other Matters) Amendment Bill under urgency, lowering the target for biogenic methane from a cut of 24 to 47 percent below 2017 levels to a cut of 14 to 24 percent. A methane levy or tax was ruled out at the same time.
“Recent government decisions on the 2050 methane target and the removal of agricultural pricing have increased reliance on [other] sectors to meet [the emissions budget] and increased the size of the gap,” officials told ministers.
In plain terms, every tonne that farming no longer has to account for is a tonne someone else has to find. That someone else is transport, industry, energy and waste, which is to say motorists, manufacturers and households. The documents also record that agricultural emissions have come in higher than expected, which puts the current budget covering 2026 to 2030 at risk as well, unless the sectors inside the scheme cut deeper than they are already on track to do.
None of this comes out of nowhere. On 22 July the Climate Change Commission published its annual monitoring report and warned that New Zealand was at risk of missing every one of its climate targets. Progress stalled in 2024, the commission found, and the pace of reductions now needs to double. More than half of the cuts the Government is counting on to meet the second budget were judged to be at significant risk.
“Current policy settings are not delivering at the pace needed,” commission chief executive Jo Hendy said, adding that “government choices in the next 12 to 24 months will be critical”. The report itself put it more bluntly, saying “the time available to correct course is now short”. Some options have simply expired. Trees planted from here will not be big enough to count towards the budgets that matter.
Prime Minister Christopher Luxon responded at the time by saying the country remained on track for net zero, a claim we looked at in July. The Government has until October to give its formal response to the commission’s advice.
What the newly released papers add is a sense of the Government’s own reading of the problem. According to RNZ, Climate Change Minister Simon Watts told colleagues the extra work could help the Government’s “public climate change narrative”, speed up renewable energy plans, and hand the next government “detailed, realistic and implementable options” for the emissions reduction plan due in 2029. The timing is the striking part. Officials have been asked to find the policies, but not to deliver them until voters have already been to the polls.
The settings decision the documents accompany was announced on 5 August, when Watts confirmed the auction floor price, the cost containment reserve price and the reserve volume of units would all be extended to 2031 rather than 2030, taking effect on 1 January 2027. “A stable ETS is key to delivering the emissions reductions required to meet our targets,” he said, describing the approach as one that “aligns with advice from the Climate Change Commission, supports our targets, and helps maintain confidence in the ETS”.
Stability is doing some heavy lifting in that sentence. As we reported at the time, the secondary market price for New Zealand units was sitting around $54.65 in early August, well under the $71 floor the Government has just locked in for another year. A floor nobody is trading at does not push anyone to cut emissions.
All of which lands in the middle of an election campaign. Climate policy has been one of the sharper dividing lines of this term, from the methane target to the vote in Parliament this week to shut down climate litigation. Voters going to the polls on 7 November will be choosing between parties with very different answers on who carries the cost of the gap. If you want to see where each of them stands before you tick the box, our voting tool lets you compare their positions side by side.
What do you think of Cabinet holding the new options back until after the election? Have your say in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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