New Zealand had made steady progress on reducing climate pollution in the past. (File photo) Photo: Supplied/ Unsplash - Chris Keats
New Zealand is at significant risk of missing its 2050 climate target, and the government's actions have increased the risk, according to independent monitoring.
The Climate Change Commission's 2025 emissions reduction monitoring report said New Zealand had made steady progress on reducing its climate pollution, but urgent action was needed to get on track for future goals.
The report had shown the country was likely to meet the government's first emissions budget, which runs from 2022 to 2025, in part due to accounting changes in the way emissions were measured.
However, the risks of missing targets from 2026 onwards had risen in the past year, and the government's plans were insufficient to put the country on track long-term.
Among the specific risks identified was the increasingly shaky prospect of carbon capture and storage happening in the gas sector.
The report said although the government's next emissions-cutting plan was not due until 2029, the coalition needed to take action before that because of the long lead-times taken for projects to start reducing pollution.
It gave the example of NZ Steel's new electric furnace, which took three years.
Jo Hendy, the commission's chief executive, said while things were broadly on track through to the end of this year, the risk of veering off course after that had increased.
Climate Change Commission chief exectuive Jo Hendy said there was a risk of things veering off course. (File photo) Photo: RNZ / Dom Thomas
Real emissions (before counting the carbon sucked in by forests) fell steadily from 2019 to 2023.
2023 was the lowest level of real or gross emissions since 1999 - and provisional figures from Stats NZ suggested emissions kept falling in most sectors through to 2024, except for electricity generation, which rose last year because of power generators burning more fossil fuels when hydro lakes were low.
Overall, the climate pollution trend was down, said Hendy.
"We're seeing more renewable energy generation, process heat conversions, electrification," said Hendy.
"And it's starting to show more in the emissions data. The key now is to build on that momentum - the next steps are crucial for delivery."
"The current policy settings aren't enough to deliver the emissions reductions that Aotearoa New Zealand has committed to. That's why we've recommended specific next steps, because delivery will falter without them."
The commission analysed every major sector, concluding the specific steps that would help the most were strengthening the Emissions Trading Scheme by updating the supply and price of carbon, to give companies more confidence to invest in cutting emissions, and bringing in policies to speed up the shifts to renewable energy, cleaner transport, and low-emissions farming.
It also said the government could save taxpayers money and cut industrial climate pollution by re-thinking the generous freebies given to some large emitters, and choosing a new way to protect manufacturing jobs from carbon pricing instead.
Hendy said many households were doing it tough, and would benefit if the government could capitalise on plunging prices for solar, electric vehicles, and batteries.
"Falling short doesn't just mean missing a target - it means higher costs down the track, lost economic opportunities, and more disruption for communities."
She said delivery was a stated priority for the government and the report provided the independent advice needed to "help them make good on that promise."
The report said technologies for farmers to reduce methane emissions had advanced in the last year and were close to being on the market.
Separately, the commission recommended shrinking the government's carbon budgets because changes to carbon accounting had moved the goal posts so the current budgets can be met with less real emissions cuts than were planned when the budgets were set.
If the government does this, it would be even further off target.
The report said moves by the government in the last year that risked producing more carbon included introducing road user charges for electric vehicles, re-opening oil and gas offshore exploration, and winding down the New Zealand Green Investment Finance fund.
On the flipside, positive moves for the climate included existing government plans to update ETS settings, confirming rail capability for new Cook Strait ferries, and streamlining consenting for new electricity generation from renewable sources.
"Our assessment of risk has increased in the last year, particularly for the third emissions budget," said the commission, referring to the 2031-2035 carbon budget.
"For the second emissions budget, there are moderate risks of not achieving planned reductions in most areas; and some areas of significant risk."
"While the third emissions reduction plan is not due until 2029, current plans are insufficient to meet the third budget and further action is required. There are also significant risks for meeting the 2050 target unless further action is taken."
It said the total of government policies in its latest emissions cutting plan would reduce climate pollution by 3.3 millions from 2026-2030.
Among the risks the commission listed were:
- The risk of not achieving emissions reductions in electricity generation increased in the last year.
- There were also significant risks around whether planned carbon capture and storage in the gas sector will be realised.
- There was risk in relying on a single sector for a large proportion of reductions. In the third budget, 46 per cent of planned emission reductions are through forest removals of carbon dioxide.
- Around the late 2030s, the ETS was expected to have limited effectiveness unless amended.
- If the government amends the budgets to bring them back into line with the intent when they were set, rather than taking an accounting win from changing its measuring methods, the country would need to make another 15 million tonnes of emissions reductions in the second emissions budget and 18 million in the third.
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