Carbon removals strategy
The Government is developing a carbon removals strategy. It will also advance work to include all land use types in Aotearoa New Zealand's international climate change response targets.
The strategy aims to build a more diverse portfolio of carbon removal activities to complement action to cut Aotearoa New Zealand’s greenhouse gas emissions.
Carbon dioxide removals are activities that draw CO2 from the air and store it in biological or geological reservoirs or in long-lived products.
The carbon removals strategy will cover activities such as:
- biological processes storing carbon in vegetation, wood products, marine sediment and organic soils
- engineered chemical and geochemical processes to capture CO2 from the air and store its carbon in minerals, geological formations or ocean sediments (eg, Direct Air Carbon Capture and Storage)
- cutting and ultimately reversing greenhouse emissions from drained organic soils (eg, rewetting drained peatland, restoring wetlands).
At present, forestry is the only carbon removal activity recognised as contributing at scale to Aotearoa New Zealand’s climate change targets.
The strategy will consider how carbon removal activities can best be recognised and rewarded.
In July 2023, Cabinet invited the Minister of Climate Change to develop options for legislative changes to create the right incentives for investment. These may include changes to the New Zealand Emissions Trading Scheme (ETS) or the use of other incentive mechanisms.
The ETS review is currently considering the role of forestry in the ETS. After further decisions are made on the next steps for the review, Cabinet will then consider legislative options to enable the ETS to include new removals activities.
The strategy will also consider how biodiversity, climate resilience and broader social and economic co-benefits can be realised.
The Government intends to consult the public on the draft next year as part of New Zealand’s second emissions reduction plan.
The Ministry for the Environment and the Ministry for Primary Industries will prepare the draft carbon removals strategy.
What is happening
The Government has also decided to advance work to include all land use types in our international climate change response targets. This is an important step towards recognising and rewarding a wider range of carbon removals as part of Aotearoa New Zealand’s climate change response.
Why it is happening
Forestry is the only significant land use activity currently included in Aotearoa New Zealand’s Nationally Determined Contribution (NDC) – our climate change response targets under the Paris Agreement.
This means that greenhouse gas emissions and carbon dioxide removals from roughly 60 percent of land area in Aotearoa New Zealand are not included in these targets.
By expanding our NDC to include other land uses, a wider range of activities to increase carbon removals and cut greenhouse gas emissions from land could count towards our international climate change commitments. This can include non-forest sequestration on farms, and wetland restoration. These types of activities can offer added benefits for biodiversity and climate resilience.
Cabinet in-principle decisions
On 3 July, Cabinet agreed to begin the work needed to do this.
- Cabinet agreed in principle that New Zealand’s NDC target should cover all different types of land, and the Government will work to include non-forest land use and management interventions by 2030.
- This in-principle decision is subject to further technical advice on accounting implications, measurement methodology and timing issues, and advice on potential future fiscal implications.
- Cabinet also agreed in principle that non-forest abatement should be encouraged in climate policy in advance of its eventual inclusion into New Zealand’s NDC.