Treasury U-turns on emissions offsets after Minister says no to sending money offshore

Wednesday, 3 December 2025

Treasury secretary Iain Rennie has confirmed his department will quantify the costs that New Zealand may have to pay to meet the Paris climate change agreement.

This comes after Finance Minister Nicola Willis said on Tuesday that the Government has no plans to pay for offshore carbon credits and she did not think Treasury needed to report the potential liability.

Under the Paris Agreement, New Zealand has promised to reduce net greenhouse emissions by 51-55% compared to 2005 levels by 2035.

To achieve this, we either need to cut that 51-55%, or we will have to purchase carbon credits offshore. In essence, paying others to cut their emissions.

In 2023 Treasury and the Ministry for the Environment calculated that the cost of purchasing offshore mitigation could range anywhere from $3 billion to $24 billion.

But thanks to accounting methodologies and obligations that we won’t get into, these potential costs are not liabilities that need to be reflected in the government’s books right now.

So aside from that 2023 report, no one has worked out how much taxpayers would need to cough up to keep our promise.

Asked by Green Party co-leader Chlöe Swarbrick on Tuesday if she thought there should be transparency around that figure in the government’s financial statements, Willis’ response was simple.

“No.”

However, on Wednesday, it was Rennie’s turn in the Scrutiny Week hotseat. He told the finance committee that he had reconsidered Treasury’s position since that exchange.

“I hear the public interest,” he said. “I want to do something similar [to the 2023 report]. We’re a bit constrained in terms of priorities so I’m not going to promise we’re going to do it in the next six months … but we can think about how we can appropriately provide more transparency.”

Pushed by Swarbrick on whether something could be done by Budget 2026, Rennie said that was unlikely. “I won’t commit to something today because we haven’t done substantive work since 2023.”

But they would try and produce something before next year’s Pre-election Economic and Fiscal Update, he said.

According to Swarbrick, this is a massive win for the Greens.

“We have been asking for this for years - it is pretty clear that this is only as a result of the growing public pressure,” she told Stuff. “The Treasury has explicitly stated there is requisite public interest for them to respond to now.“

Asked how this sits with Willis’s comments the day before, Swarbrick said she was “not interested in putting the Minister and Treasury at loggerheads”.

“It has been clear from hearings and correspondence that [the Minister] was not interested in them doing that work. … But it has consistently been the point that if you don’t do that - if you aren’t committed to the [Paris Agreement]. So this is a big win for transparency,” she added.

An earlier version of this story said Nicola Willis did not think Treasury needed to “calculate” the potential liability, it has been tweaked to say “report” the potential liability.