Need to understand how sequestration works in the Farming Tax?

This quick explainer covers how the Government's Farming Tax, the agricultural industry bodies' HWEN proposal, and the Government's announcement at Field Days 2022 add up to a raw deal for farmers that still won't reduce global emissions.

Why sequestration matters

Sequestration is the process where carbon is removed from the atmosphere and stored in some way. In the agricultural sense, this happens when plants, mainly but not only trees, absorb the carbon into wood and the ground.

Farmers, like everyone else, should be credited for the carbon they take out of the atmosphere and the way the Government planned to tax farmers for emissions without crediting them for their sequestration was a major shortcoming of their plan, but far from the most glaring problem.

While some have tried to paint the differences in the way sequestration is treated between the Government’s Farming Tax and the agricultural industry bodies’ proposal, called He Waka Eke Noa (HWEN), as a major, fatal blow to farming, the truth is that the HWEN plan was only any better by a fraction of a degree.

Now, the Government's Field Days announcement was really just a ‘clarification’, and will still mean a lot of vegetation on farms will miss out on being counted for sequestration credits.

All spin, no substance

It really is, simply, a reconfirmation of what the Government proposed in the Farming Tax proposal they released in October. Their plan included agreeing to credits for some vegetation categories, and a vague commitment to look at further opportunities for more vegetation categories to be included in the ETS.

Claims by some that the Government has done a major U-turn and that this new announcement is better for farmers, are incorrect and look to be an attempt to save face.

The Government’s wording is that they will accept “scientifically robust sequestration”, meaning we will have no clarity until that scientific detail is worked out, and communicated.

As we have said before, much of the scientific work on the ways farmers can reduce emissions remains to be done. While there is promising scientific work going on in some areas, the Farming Tax (in every proposed form so far) plans to penalise farmers for all knowns, while leaving the as yet unknown potential rewards as vague future possibilities.

Ironically, that same wording is used in the industry bodies HWEN Proposal, on page 55, they say "the intent is to recognise as much on-farm sequestration as possible, while ensuring the system is scientifically robust”. On almost every count, HWEN = Farming Tax.

All stick, no carrot

There is also the nonsensical ‘additionality clause’, which is in both the Government proposal and the industry group HWEN proposal. This rule applies to how existing Native Vegetation is counted for a landowner claiming their sequestered carbon.

You can only count it if you can prove you are protecting it (that’s if you have fenced it off, you are trapping possums, you are keeping out deer etc), to show you are letting it regenerate. Then you can count the ‘additional’ sequestration you are helping it achieve.  In practical terms, it’s hard to say how this will work or be checked/complied with.

Then your riparian planting is a classic example of farmers being misled by their industry groups. HWEN does state that you can count riparian plantings established after 2008 (or with proof it was established between 1990-2008) – but the catch is, the fine print says it must have more than 50% woody vegetation in it.

Most riparian plantings are naturally suited to line along waterways and provide the best habitat for freshwater biodiversity and water quality. This is not woody vegetation mentioned in the fine print, but are instead the likes of flax, swamp grasses, rushes and toetoe.

Shelterbelts is another area, where counting for sequestration is not straightforward. The fine print says the trees have to have been planted after 2008 (which will disqualify a lot to start with), and also can’t be counted if it’s less than 1ha in area, with less than 30% canopy cover and less than 30m wide. Small woodlots can be aggregated to add up to the minimum 1ha to count, but not the shelterbelts.

It all adds up to just the same old deal with the Farming Tax

So take the spin of both the industry bodies and the Government with a hefty shovel of salt. Once you get into the fine print, farmers are still left with all liability and little action to take on sequestration that doesn’t involve swathes of the countryside planted with pines for carbon farming.

The announcement confirmed that the Government supports the sequestration put forward by the industry groups in the HWEN proposal, but farmers and all opponents of the Farming Tax must know that this means a vast majority of vegetation still won’t be counted.

The fundamental problems with the punitive, counterproductive, and unworkable Farming Tax still remain:

• Higher food prices for everyone
• Decimating rural communities
• No benefit to global emissions