These policy cuts range from cutting clean car subsidies and scaling back public transport initiatives to delaying key emissions reduction projects and slashing funding for the Climate Change Commission. Instead of directly addressing sources of emissions, the government is increasingly relying on offset strategies like tree planting to meet its climate goals.
Cindy Baxter of the Climate Action Tracker (CAT), which monitors around 40 countries that account for 85% of global emissions, told CNBC-TV18, “Everywhere you look in New Zealand, there’s a climate policy that’s been reduced or undone.”“Transport is the fastest-growing source of emissions in this country. We had an EV subsidy that was working well. But as soon as the new government came in 2023, they scrapped it immediately,” Baxter pointed.
The Clean Car Standard sets limits on the average carbon dioxide emissions from the tailpipes of new vehicles entering New Zealand. However, the Luxon government argued that the 2025–2029 targets would impose higher costs on car importers and buyers. As a result, the CO₂ targets for passenger vehicles were significantly relaxed for 2026 and 2027.
| Year | Car emission targets | Revised emission targets |
| 2025 | 112.6 g/km | 112.6 g/km |
| 2026 | 84.5 g/km | 108 g/km |
| 2027 | 63.3 g/km | 103 g/km |
Source: NZ governmentAccording to critics, these weakened car emission rules undermine the push for adoption of EVs and may delay the decarbonisation of private transportation.
In February 2025, Climate Change Minister Simon Watts downplayed the climate change risk, saying, “You must have the intent to meet the target, but if you fall short, no one sends you an invoice. That’s why it is not a liability on the government’s books and there is no legal obligation.”
Another major rollback was the removal of agriculture from New Zealand’s flagship Emissions Trading Scheme (ETS), which tracks and prices greenhouse gas emissions across key sectors to incentivise reductions.
This has resulted in exempting the country’s single largest emitting sector – agriculture, which is responsible for nearly half of New Zealand’s total greenhouse gas emissions.
Being the largest exporter of dairy products in the world, New Zealand relies heavily on livestock and farming. The agricultural activities account for approximately 53% of the country’s gross emissions, making it one of the only developed nations where agriculture is the largest emitting sector. Ireland ranks second with 37% of emissions coming from agriculture, while for India it is only 18%.
Sector-wise emissions in New Zealand (Source: NZ Environment Ministry)
The majority of these emissions (48%) are methane (CH₄), which is primarily produced by livestock. The South Pacific nation has the highest per capita methane emissions among the 38 member countries of the Organisation for Economic Co-operation and Development (OECD). Unlike many OECD countries, where energy and transport are the top emitters, the economy of New Zealand is agriculture-intensive.
The coalition government led by Prime Minister Luxon, has described the move as fulfilling a campaign promise to “take farming out of the ETS,” and develop an alternative pricing system for agricultural emissions by 2030. One key initiative includes the development of a ‘methane vaccine’ aimed at breeding cattle that produce lower emissions.
Baxter, who has been involved with CAT since its inception in 2009, claims, “farmers are a key conservative vote bank, and the current government enjoys strong support from them.
That’s why it’s doing their bidding, and to top it off, the head of a major farming lobby group is now a Member of Parliament.”
‘Accounting trick’ for fudging the methane impact
Not only has agriculture been removed from the ETS, but the government is also adopting an ‘accounting trick’ to change the way methane emissions are being measured. Known as GWP (Global Warming Potential-star), this method will allegedly downplay methane’s short-term impact, which is 28–34 times more potent than CO₂ over a 100-year period.
The established metric under the 2015 Paris Agreement, GWP100, measures the warming effect of a non-carbon dioxide (CO₂) greenhouse gas, relative to CO₂, over a 100-year period. However, GWP assesses methane’s impact based on the rate of change in emissions over time, rather than the total volume emitted.
Food systems researcher Nicholas D. Carter explains in his 2023 report ‘Seeing Stars’ that “depending on the choice of baseline year, the same volume of methane emissions can be described as causing warming, no warming, or even cooling.”
This may open the door for high-polluting countries to use GWP* to frame even minor reductions in methane as negative emissions or even climate benefit, despite continued high output.
Speaking from Piha in Auckland as parts of the country grapple with devastating floods, Baxter doesn’t mince words on GWP. “The New Zealand government is trying to trick the world,” she warns.
Climate Lawyer Jessica Palairet adds, “GWP will cap methane in a way no one else in the world does, which would be very harmful,” as it risks creating inconsistencies with international reporting standards and could artificially lower New Zealand’s reported emissions.
Two environmental groups, namely, Lawyers for Climate Action and the Environmental Law Initiative, have filed a landmark lawsuit against the New Zealand government, marking the first-ever legal challenge to a national emissions reduction plan in the country.
In a video conversation, Palairet – who is leading the court action – explains why the government’s emissions reduction plan is “unlawful.” The lawsuit has two main components, she elaborates – “First, it challenges the government’s decision to scrap 35 climate policies, and second, it argues that the revised Emissions Reduction Plan is inadequate to achieve New Zealand’s targets under both domestic law and the Paris Agreement.”
However, as per the government data, New Zealand’s gross emissions in 2023 decreased by 2% compared to 2022, dropping to 76.4 million tonnes of carbon dioxide equivalent (Mt CO₂-e). Net emissions fell even further, by 4%. As of the latest update, data for 2024 has not yet been released.
New Zealand emissions reductions (Source: NZ Environment Ministry)
Arguing against the modest decline in emissions, Palairet states, “This case isn’t about how much emission reduction happens in a particular time frame, but rather about the budget and the plan the government has set to meet its own targets.”
Additionally, the Chief Executive for Lawyers for Climate Action reveals, “There’s a separate case concerning the targets that’s moving through the courts, this time against the Climate Change Commission,” which is an independent body, separate from the government.
In an emailed response, Robin Campbell, Acting Chief Executive of the Climate Change Commission tells, “We have stood by our advice throughout the court process and maintained that claims ‘we are not sufficiently ambitious’ are wrong and misrepresent our advice.”
All requests for comment sent to the New Zealand government remained unanswered at the time of publishing this report.
Heavy reliance on offset strategies
In an offset-heavy system, New Zealand stands out as the first and still the only country with an ETS that includes forestry.
The CAT is calling on the government to increase transparency by removing land use, land use change, and forestry (LULUCF) from the ETS and setting separate, dedicated targets for this sector.
CAT’s Baxter explains: “New Zealand and Australia were really pushing for this in the early days of climate convention negotiations because they wanted to use their forests as offsets, so that they don’t have to reduce emissions. That’s really what it’s all about.”
Challenging the popular narrative around tree planting as a climate fix, she adds, “Trees are an impermanent solution to a permanent problem. Forest protection should be used to draw down CO₂ but only after we’ve stopped all our fossil fuels emissions.”
What are New Zealand’s targets?
New Zealand has set a long-term climate goal of reaching net zero emissions by 2050 for all greenhouse gases, excluding biogenic methane from agriculture and waste.
But the Climate Change Commission warns in its 2024 monitoring report that “there is a significant risk New Zealand won’t meet future emissions budgets, unless further actions are taken soon.”
New Zealand boasts that nearly 85% of its electricity comes from renewable sources, but that share has only declined since the 1980s.
Baxter points out, “The Government has set an aspirational target of 100% renewable electricity by 2030, but I don’t see how on Earth they’re going to achieve it.”
In stark contrast, Resources Minister Shane Jones recently declared in the parliament that New Zealand is the only Western nation transitioning back to coal. “Don’t try to convince Kiwis that you can keep the lights on with more sunlight and wind,” he said, openly rejecting the dependability of renewable energy.
Additionally, in May 2025, the Luxon Government lifted a six-year ban on offshore oil and gas drilling and also approved a NZ$200 million subsidy to support new gas exploration and production projects.
As a small country, New Zealand contributes only 0.2% of global greenhouse gas emissions. “The fact that we’re a small country doesn’t mean that we don’t matter,” Palairet says, implying New Zealand has both the responsibility and the opportunity to lead by example.
Baxter adds with a pointed analogy, “Take tax, for instance. My personal contribution to the government coffers is tiny. So, should I stop paying?”
Adopting the American approach to climate change
Concerns have mounted since the right-wing, pro-business government took office in 2023. While climate groups have dismissed seeing Prime Minister Luxon pulling out of the Paris Agreement, there has been some domestic clatter, including from newly appointed Deputy Prime Minister and coalition leader David Seymour, who has suggested formalising this idea after the next general election in 2026.
Asked whether New Zealand is following America’s lead on climate policies, Baxter doesn’t hesitate. “Yes, totally. Absolutely. No question,” she says, citing Climate Action Tracker’s “highly insufficient” rating of New Zealand’s climate policies.
“We’re in the process of updating our analysis for New Zealand, but I don’t think it’s going to get any better,” she adds with a laugh, describing the government’s climate rollbacks as “Trumpian” in nature.
Palairet, who represents Lawyers for Climate Action with over 370 members across the island, bluntly says, “New Zealand is not doing what it needs to do.”
