Will Tesco’s Sustainability Conditions Influence Emission Reduction in NZ?

Tesco, a British multinational grocery, wants all its suppliers of fresh meat, dairy, and produce to meet sustainability requirements, including those from New Zealand.

This announcement may push New Zealand farmers to embrace the government’s climate targets, particularly its goal to reduce agricultural emissions.

Tesco announced that its supply chain must be net-zero by 2050, and starting from 2025 to 2030, 100% of all its sourced fresh products, including meat and dairy, will be environmentally accredited (Uys, 2022).

Uys (2022) says:

• Tesco’s sustainable agriculture manager Alice Ritchie says that half of the supermarket’s emissions if from farming. Because it buys produce from New Zealand, a huge chunk of its emissions is generated there.
• The British grocery has more than 2300 stores across Europe and Asia. Tesco is a major buyer of New Zealand meat products. In 2022, the grocery chain bought 36,340 tonnes of sheep meat valued at $521 million.
• Ritchie recognised New Zealand’s sustainability programs and the recent introduction of an agriculture tax for farmers.
• “For us, it’s important what happens in New Zealand and how it feeds into our wider reduction plans,” Ritchie says.
• New Zealand already has several climate policies and programs to reduce carbon emissions in all sectors, including agriculture, which accounts for nearly half of the country’s gross GHG emissions.

In May 2022, the government released its first Emissions Reduction Plan describing how New Zealand will meet its net zero targets by 2050.

In 2019, the government also decided to put a price on agricultural emissions from 2025 to help meet its emissions reduction goals: to reduce methane emissions by 10% below 2017 levels by 2030 and by 24 – 47% by 2050. And minimise nitrous oxide and carbon emissions to net zero by 2050.

Through the He Waka Eke Noa – Primary Sector Climate Action Partnership, New Zealand farmers are equipped to know how to calculate their farm’s agricultural emissions, and once they have the information on their emissions, they can then identify opportunities and actions to help them manage and reduce their emissions. 

New Zealand’s proposed agriculture tax, which sees farmers pay for their emissions from 2025, will be signed off by Cabinet in early 2023. Farmers will then start paying a levy once a year or every three years.

The scheme was designed in 2019 to answer calls from the sector to have a farmgate emissions pricing system separate from the country’s Emissions Trading Scheme (ETS).

Farmers were set to be folded into the ETS if no progress was made on farmgate pricing. But under the current proposal, failure to implement the emissions levy will mean that the emissions price will be charged to importers and manufacturers based on the number of their imports.

This announcement from Tesco could serve as a warning and incentive to New Zealand farmers to embrace the sustainability standards of their biggest markets and comply with the government’s climate targets.

New Zealand Prime Minister Jacinda Ardern says that the proposal put New Zealand farmers as the first in the world to reduce agricultural tax agriculture which would give the country’s biggest export market (worth $46.4bn a year) a competitive advantage globally while putting the country on track to meet its 2030 methane reduction target.