NZ Emisisons Trading Policy: Fonterra seeks urgent changes to ETS
October 28th, 2009
Fonterra is seeking an urgent change to the ETS to ensure every part of the dairy supply chain, from farm to transport and processing, is covered in the legislative definition of trade-exposed elements of the industry. The co-operative gets less assistance from the ETS than other trade-exposed industries because of its treatment of stationary energy and heat and steam re-used in energy efficient co-generation plants. A broader definition will be consistent with what the Aust scheme achieves for miners.
Fonterra’s submission says “not considering the full costs across the integrated supply chain means farmers will in effect receive allocation relief for 75% of emissions costs, not the 90% suggested by the agricultural allocation provision. Allocative relief for eligible industrial firms will not decline to 75% until 2026.” The current ETS proposals will add annual costs of $42.2m for Fonterra in 2013, with carbon priced at $25 a tonne. By failing to allow re-used steam and waste heat for co-generation to be included in the calculation of carbon emissions reduction, Fonterra is effectively punished for making investments which cut the use of fossil fuels and account for 25% of the energy used in the co-op’s manufacturing processes. Hearings on the Climate Change Response (Moderated Emissions Trading) Amendment Bill wound up last week, with more than 150 oral submissions. Numerous regional branches of Federated Farmers sent their provincial presidents to Wellington to reiterate farmers’ total opposition to the ETS.
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