Understanding on-farm emissions
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Agriculture is responsible for over half of New Zealand’s emissions, primarily due to methane and nitrous oxide produced by farming. The dairy sector alone contributes to about half of these biological emissions. Understanding and managing these emissions is crucial to meet government targets and market demands. Learn more below about these emissions and the importance of managing them effectively.
Biological emissions
The three most important gases from a New Zealand agricultural perspective are methane, nitrous oxide, and carbon dioxide.
Methane
Agricultural methane, or ‘biogenic methane’ as it is also known, is generated by ruminant animals as a by-product of digestion. A small amount (5 per cent) is also emitted from dung and effluent systems.
The total feed eaten by livestock on your farm (per kilogram of dry matter intake) is the key driver of methane emissions.
How methane is produced
Methane, which is mostly emitted when cows burp, is produced by microbes in the rumen. These microbes are naturally present in all ruminant animals.
The average dairy cow produces about 98kg of methane annually, with 95 per cent coming from digestion. New Zealand studies have shown that about 21-22 grams of methane are produced per kg of dry matter eaten.
Why is methane recognised differently?
Methane has a relatively short life in the atmosphere of around 12 years. After that, 80 to 89 per cent of methane breaks down into carbon dioxide and water, which is why it is considered a ‘short-lived’ gas. Despite its short lifespan, methane has an intense warming effect. It is more than 25 times as potent as carbon dioxide at trapping heat in the atmosphere.
However, long-lived gases such as carbon dioxide and nitrous oxide continue to add additional warming to the atmosphere for hundreds to thousands of years.
New Zealand’s climate change legislation recognises this difference and takes a ‘spilt gas’ approach to setting climate targets. For more, see our Climate change legislation page.
Nitrous oxide
Nitrous oxide is released into the atmosphere from dung, urine patches, and nitrogen (N) fertilisers.
The amount of nitrogen applied in a dairy system as well as the percentage of nitrogen in feed are the main drivers of nitrous oxide emissions. Temperature and soil moisture can also play a role.
How is nitrous oxide produced?
When animals graze nitrogen-rich pastures only a fraction of the nitrogen consumed supports the production of milk or meat. Most of it ends up excreted in urine and dung.
The loading rate of nitrogen in a urine patch can be up to 1000 kg N per ha.
Nitrogen is released from the soil when urine, faeces and fertilisers are broken down by naturally occurring microbes in the soil.
Carbon dioxide
Other farming activities also emit carbon dioxide, mostly from fossil fuel use. A small amount is associated with lime and urea nitrogen fertilisers. As carbon dioxide is already accounted for under the New Zealand Emissions Trading Scheme, it will not be included in your farm greenhouse gas emissions report.
Farming activities can sequester (store) carbon dioxide, primarily through growing woody vegetation. Soil can also capture (and release) carbon dioxide. This is under investigation so it can be better quantified.
How are emissions measured?
Agricultural emissions are estimated in New Zealand’s national greenhouse gas inventory using production data from processors and Stats NZ Agricultural Production Survey. This information is used for national and international reporting requirements, including tracking how New Zealand is progressing towards its climate targets.
In 2022, the most recent year reported in the inventory, the agricultural sector contributed 53.2% of New Zealand’s total emissions, as shown in the figure below. Dairy contributed around half of those agricultural emissions.
Gross greenhouse gas emissions in 2022 by sector, category and gas type
To see more about the dairy sector's emissions profile and how it compares to other sectors, visit Ministry for the Environments inventory page and climate tracker.
Why manage on-farm emissions?
Around the world, governments, businesses, and communities are increasingly focused on reducing emissions to limit further global temperature rises.
Government targets
New Zealand has both international and domestic climate change targets that cover all sectors of our economy. The Government has committed to introducing a system to price agricultural emissions by 2030 as part of meeting these targets. DairyNZ is working hard to advocate for fair outcomes in agricultural emissions policy and any potential pricing. For more on these efforts, see our climate change advocacy page.
Consumer and business-led targets
Since the Paris Agreement on climate change was signed in 2016, multinational companies, including customers of New Zealand dairy products, have started setting their own greenhouse gas reduction targets.
New Zealand dairy companies and banks are also setting targets that address emissions behind the farm gate, often referred to as ‘Scope 3 emissions’. These targets are in addition to Government action on climate change.
Understanding ‘Scope 3’
Corporate or business targets often categorise greenhouse gas emissions into three ‘scopes’. Scope 1 covers direct emissions from owned or controlled sources. Scope 2 covers indirect emissions from the purchase and use of electricity, steam, heating, and cooling. Scope 3 includes all other indirect emissions that occur in the upstream and downstream activities of an organisation.
| Scope | Definition | Dairy company or bank | Farm |
| 1 | Direct emissions from sources owned by an organisation. | Includes emissions from activities, manufacturing and transport. | All emissions on-farm, including methane and nitrous oxide. |
| 2 | Indirect emissions from the generation of purchased energy an organisation uses. | Emissions from electricity used at sites and offices. | Emissions from sourcing electricity. |
| 3 | Indirect emissions occurring because of the activities of an organisation but generated from sources it does not own or control. | Emissions from upstream sources and products in the supply chain. This includes on-farm emissions from dairy farmers. | Emissions from pre-farm gate e.g. the manufacture of imported feed and fertiliser. |
Understanding emissions ‘intensity’
These Scope 3 targets often seek to reduce emissions ‘intensity’, which is the emissions per unit of product, e.g. per kg of milksolids or per kg of Fat and Protein Corrected Milk (FPCM). This is driven by customer demand for lower emissions products and is different to government climate targets and to Scope 1 and 2 targets, which are focused on reducing total or ‘absolute’ emissions.
More information on FPCM can be found here on our Managing GHG emissions page.
Examples of on-farm Scope 3 targets
- Synlait: 30% reduction in on-farm emissions per kg of milksolids by 2028 from a 2020 baseline.
- Fonterra: 30% reduction in on-farm emissions per kg of FPCM by 2030 from a 2018 baseline.
- BNZ: 11% reduction in financed emissions intensity (kgCO2e/kg milksolids)
- Westpac: 10% reduction in financed emissions intensity (tCO2-e/t Fat and Protein Corrected Milk) from a 2021 baseline (separate target for sheep and beef).
Other dairy companies and banks are also starting to consider Scope 3 targets.
What is DairyNZ doing?
We are working in three key areas to support farmers with the challenges of climate change:
- Advocating for fair outcomes in agricultural emissions policy.
- Researching on-farm solutions for reducing greenhouse gas emissions and more resilient farm systems in an increasingly variable climate. For example the Emissions4Pasture project, the Plantain programme, and a project looking at the impact of climate change on animals.
- Carrying out extension and engagement with farmers on managing financial performance and reducing environment footprint, including managing greenhouse gas emissions.