A government proposal from New Zealand, announced this week, would introduce the world’s first countrywide levy on methane emissions from ruminant livestock, targeting burps and flatulence from sheep and cattle starting in 2025. The plan underlines how a nation with a livestock-dense economy tracks its output of greenhouse gases, even as the number of cattle in the country grows alongside its human population.
The proposal comes with questions about how much revenue would be raised, what price would apply, and how measurement would be conducted. The government intends to consult with farmers by November 18 to refine these details and gather on-the-ground input before any formal implementation.
Prime Minister Jacinda Ardern emphasized that every dollar collected would be reinvested into the sector. The funds would support the development of new technologies, funding for research, and incentives designed to help farmers reduce emissions while maintaining productivity.
Ardern argued that no other country has yet put a similar system in place for agricultural emissions. The goal is to stabilize the price signal while achieving meaningful reductions, enabling New Zealand’s farming community to lead in early adoption and enjoy a competitive advantage as global climate policies tighten.
The move is framed as a strategic step for an ocean-adjacent economy that relies heavily on agriculture for export earnings and jobs. The policy would make New Zealand one of the first major agricultural exporters to require livestock emissions to bear a price, aligning environmental responsibility with trade position on the world stage.
In a country with about five million residents, agriculture accounts for a sizable share of emissions, largely from ruminant animals such as sheep and cattle. New Zealand is home to about 26 million sheep and 10 million cattle, with methane generated during digestion released through burping and belching. The policy aims to address this methane burden while retaining the sector’s global competitiveness.
The plan is backed by leading industry groups and the He Waka Eke Noa alliance, which includes primary industry associations. It would offer incentives for farmers who reduce emissions and allow those reductions to be offset by forest planting. The arrangement seeks to reward practical emission reductions while maintaining a viable farming economy.
Supporters describe the proposal as a crucial step in New Zealand’s transition toward a low-emission future and a tangible commitment to pricing agricultural emissions starting in 2025. They believe it would empower farmers to become exemplars in global emissions reduction, bolster export brands, and create a framework that others may study and emulate.
Critics among farming organizations, however, argue that the policy could drive consolidation, reducing the number of cattle and sheep operations. Some have warned that the policy risks transforming rural landscapes, with farms potentially being sold and reimagined as forests or other land uses.
Andrew Hoggard, the head of Federated Farmers, has voiced concerns that the plan could fundamentally alter rural life in New Zealand. He warned that some farms might be priced out of the market, forcing owners to make difficult choices about property and livelihoods. The sentiment reflects a broader fear that a price on emissions could accelerate changes that undermine traditional farming practices.
The agricultural sector currently contributes around 10 percent of gross domestic product and accounts for roughly 65 percent of all export revenues. The Wellington government has set a long-term objective to achieve net-zero emissions across the economy by 2050 and has tasked officials with deciding, by year-end, how to tax emissions from the agricultural sector in a way that is credible, transparent, and acceptable to farmers and consumers alike.
As the discussions continue, the industry will watch closely how the policy is designed, implemented, and evaluated. The ultimate test will be whether the levy signals a meaningful reduction in methane emissions while preserving the vitality of New Zealand’s farming communities and its standing in international markets.