Greenhouse gas emissions are gradually falling, but the reductions are unlikely to be enduring, and the pace needs to more than double. This is one of the key findings from the emissions reduction monitoring report just released by New Zealand’s independent Climate Change Commission.

The report covers government policy and action in the 12 months up to 1 April 2026. Based on the latest available data from New Zealand’s Greenhouse Gas Inventory, it tracks progress towards the second emissions budget (2026–2030), which is currently underway, as well as the third budget (2031–2035) and the 2050 target. It also assesses the adequacy of the second emissions reduction plan and progress in its implementation, reporting against the budgets as currently set.

Specifically, the review states that after declining since 2019, gross emissions reductions stalled in 2024, largely due to a dry year that meant coal was used to generate electricity. While emissions estimates for 2025 suggest this was temporary, the situation highlights the need for greater buffers against external factors. Moreover, recent reductions in industrial emissions are largely due to a drop in production, rather than changes in efficiency, technology or fuel switching.

As regards the second emissions budget (2026–2030), the Commission’s projections show that more than half of the reductions planned are at significant risk and that recent government actions to reduce emissions are likely to be outweighed by other actions taken that may increase them. It’s also too late to plant additional forests to address any shortfalls in this budget.

Crucially, current plans and policies are insufficient to meet the third emissions budget (2031–2035) or the 2050 target, and the window for action is closing. Projections show the 2030 biogenic methane target will not be met with government estimates showing a 7.9% reduction in biogenic methane by 2030, compared with the 10% target. If additional action does not occur in the next one to two years, it will no longer be feasible to meet the 2030 biogenic methane target or the third emissions budget.

In the recommendations section of the report, the Commission urges the government to take action to address market barriers and failures within the next year to ensure it can meet its emissions goals. This includes determining how to incentivise further emissions reductions and removals in the 2030s given that the New Zealand Emissions Trading Scheme in its current form will struggle to do this. The Commission also recommends that the Government update its approach to emissions projections to ensure they provide a robust indication of likely future policy impact.