However the independent Climate Change Commission’s emissions monitoring report is still to come, and questions remain around how much accounting changes have bolstered MfE’s figures.

MfE’s latest emissions inventory, released yesterday, shows NZ’s emissions dropped a tiny amount from 2023 to 2024 – by just 0.1% – described as “a terrible result” by climate researcher Robert McLachlan.

In a written statement, a Ministry for the Environment spokesperson told Carbon News that the country was still on track to meet the first emissions budget, which runs from 2022 to 2025.

"Inventory 2026 is tracking in line with the latest published projections which show that New Zealand is on track to achieve EB1. The increase in Energy sector emissions between 2023 and 2024 was anticipated and incorporated into the latest emissions projections. Emissions between 2023 and 2024 in other sectors have fallen roughly in line with the latest projections. 

"The new data from the Inventory will be used to update our assessment of progress on New Zealand’s domestic and international emission reduction targets. We will be preparing updated emissions projections later this year."

Last year, MfE’s emissions projections were different to the Climate Change Commission’s for the same period, with MfE saying that New Zealand’s first two emissions budgets, to 2030, are achievable, but the third emissions budget (for 2031–2035) was in question, while the commission’s July report said there were “areas of significant risk” for the second emissions budget and plans were “insufficient” to meet the third emissions budget.

Changing goalposts?

Carbon News asked the Climate Change Commission if the latest numbers showed NZ was still on track to meet the first emissions budget and the 2030 methane target.

Jo Hendy, CCC chief executive, confirmed that the commission would provide a formal assessment on whether the emissions budget is likely to be met in its annual emissions monitoring report, with the upcoming July report set to look at the trends in emissions as well as progress towards the 2030 methane target.

“In the 2025 emissions reduction report we indicated ‘The first emissions budget is likely to be met due to a combination of emissions reductions and changes to accounting methods.’

“One of the key differences between last year’s report and the inventory data released today is there are further changes to how the inventory is counted, which mean that fewer emissions reductions are required to meet the emissions budget.”

Carbon News asked whether this meant 2024’s gross emissions would have actually gone up were it not for accounting changes. However the commission said it would not comment on this ahead of the work it was putting into the 2026 emissions reduction report.

Earlier this year the Climate Foundation’s Christina Hood criticised the Government’s use of methodological changes to make the second emissions budgets easier to meet, saying the Government should instead tighten the budget accordingly, in line with the CCC’s advice. “Counting that is a cheat in my view,” she said.

In a similar vein, as his tenure at the Climate Change Commission was drawing to a close, former chair Rod Carr memorably predicted that the Government would use ‘creative accounting’ to meet climate targets.

Hendy noted that there was still one more year of emissions data to come before we know if the first emissions budget is met. “Our formal assessment of whether the first emissions budget has been met will come in our end of budget report which is due by the end of 2027.”

Previous MfE projections show New Zealand is set to miss its legislated 2030 methane reduction target of a 10% reduction on 2017 levels.

‘Challenging issues’ over ETS advice

Carbon News also asked how uncertainty around emissions projections would affect the CCC’s upcoming advice over ETS settings, which is due this month.

“For our advice on the NZ ETS unit limits and price control settings, our 2026 report will be narrowly focused on what the regulatory settings for auctions over the next five years should be – in line with what we have to consider under our legislation,” Hendy said.

“However, the context for this year is novel due to the implications of recent Government decisions, such as the decisions that the NZ ETS settings no longer need to accord with nationally determined contributions, to weaken the 2050 methane target, and to not price agricultural emissions.

“We also must take into account the new emissions projections, that show agricultural emissions will likely be higher (and NZ ETS-covered emissions lower) over coming years than previously anticipated. This means there are some challenging issues to address in this year’s advice.”

Emissions from dairy increasing

While emissions from agriculture were down in 2024 according to MfE’s latest figures, methane emissions from dairying and emissions from nitrogen-based fertiliser use increased, with these increases offset by a reduction in sheep numbers.

Greenpeace Aotearoa climate campaigner Sinéad Deighton-O’Flynn slammed this result. “Instead of working to reduce their emissions, Fonterra and the intensive dairy industry are pouring fuel on the fire by expanding the dairy industry."

She said offsetting the increases with a reduction in sheep numbers and an increase in forestry is not sustainable.

"The increase in emissions from the dairy industry is the equivalent of adding an extra 100,000 cars on roads for a whole year.”

Policy impacts

Previous analysis from Christina Hood shows that the current Government’s climate policies have added a whopping 26 million tonnes of emissions out to 2030, according to the Government’s own projections.

However Ben Taylor, who works in sustainability, said the inventory still showed continuing improvement over the long-term, with greenhouse gas emissions declining 11% since peaking in 2006.

“Every sector has reduced gross emissions over this period, although there has been a reasonable variation in paths. This shows every sector is able to reduce emissions.”

Taylor said each sector faces different challenges “But the solutions to reduce emissions already exist and putting them into action will create significant opportunities.

“The focus now needs to be on implementing these solutions at a faster pace to increase the speed of emission reductions.”