Situational analysis of New Zealand’s bioeconomy

What the report covers

The report provides:

• data and analysis on the current use of biological resources
• comparative emissions profiles
• impacts from current and possible future land uses
• case studies of increasing value while lowering environmental impact, and
• opportunities and impacts for the Māori bioeconomy.

The research was conducted by the Agribusiness and Economics Research Unit (AERU) at Lincoln University.

Why this research was commissioned

New Zealand is highly dependent on its biological resources to thrive and is not self-sufficient in these resources.

Decarbonising the economy will put greater demand on New Zealand’s productive land use and biological resources.  

New Zealand has strategic choices about what our biological resources are used for in the future. In making these choices, it will be important that New Zealand leverages the greatest value from our limited bioresources while ensuring their sustainability, maintaining the ecosystems that underpin them and reducing emissions.

This report provides an evidence base to inform these choices.

Key findings

The biological sector accounts for around three-quarters of the country’s merchandise exports but also contributes over half of New Zealand’s greenhouse gas emissions.

For New Zealand to prosper we need to increase the economic, social, environmental, and cultural outcomes from our limited biological resources and manage the trade-offs arising from increased demand.

New Zealand will need significantly more biomass for bioenergy production. Meeting that demand will require changes in land use, with associated impacts on other primary production.

The research ran scenarios to assess at a high level the impacts of converting some sheep and beef land use to forestry to increase bioenergy supply. While gross output rose and emissions fell in these scenarios, localised employment also fell.

Several innovations, including short rotation crops and partial conversions of farms to forestry, could help increase biomass production with less competition for land. 

There are a range of other opportunities to enhance the value and outcomes derived from the bioeconomy including:

• further development of the Māori bioeconomy through sustainable and high value products and practices, consistent with Māori values
• technologies to improve farm productivity, such as precision agriculture
• development of high value bio-based products, for example using algae from the marine environment for pharmaceuticals, fertiliser, food, animal feed and other uses
• leveraging higher premiums from existing products
• developing new areas of carbon sequestration, such as the coastal and marine environment.

Disclaimer

The Ministry of Business, Innovation & Employment (MBIE) commissioned this research to explore how Aotearoa New Zealand can increase the value generated from our biological resources and how these resources can be used more efficiently to reduce emissions.

The findings have supported work under the First Emissions Reduction Plan to assess how Aotearoa New Zealand could transition to a sustainable and high value bioeconomy.

The report explores potential pathways and opportunities available to New Zealand, but these do not represent policy advice; and the views, opinions, and conclusions expressed in the report are strictly those of the authors.

Limitations of scenario modelling

The Agribusiness and Economics Research Unit (AERU) at Lincoln University was commissioned to prepare a situational analysis of New Zealand’s bioeconomy, which looked at the current uses of New Zealand’s biological resources and examined 6 land use change and export premium scenarios.  

The scenarios were developed to examine the land use, community, and environmental impacts of following specific pathways to meet bioeconomy and economic targets. For a number of these scenarios, the level of land use change (and associated community and environmental impacts) would rule them out as feasible pathways to support New Zealand’s transition to a bioeconomy. 

The modelling frame employed by the AERU measures the economic, social, and environmental consequences of land use change but should be seen primarily as a high-level assessment tool.

More granular tools would be required to fully assess the implications associated with each of the scenarios, from the capital investment required to grow dairy production, through to the research and marketing development required to build export premiums, and the detailed energy analysis needed to assess the biomass requirements to meet the expected primary and final energy supply requirements.  

The AERU modelling had limited ability to incorporate off-setting actions (such as integrating forestry more fully into farming operations), or how improvements in livestock and land use productivity would affect the scenario outcomes.

With high-level modelling of this nature the results are assessed against the status quo, rather than against a range of feasible land use and production alternatives. This limits the opportunity to assess alternative pathways, which may have lower environmental costs or offer higher economic returns. (Such as the utilisation of new forest production for engineered timber in construction rather than biomass for energy.)