New Zealand has decided to withdraw the proposed "burp tax" aimed at decreasing greenhouse gas emissions from cattle and sheep.

The country's centre-right coalition government announced on Tuesday its decision to exclude agriculture from the national emissions trading scheme, opting instead to explore alternative methods to mitigate methane emissions.

This move honors a pre-election promise by Christopher Luxon's National Party, following nationwide protests by farmers opposed to the 2025 agricultural emissions tax due to concerns over its impact on their business.

"It is not logical to outsource jobs and production overseas to less carbon-efficient countries while fulfilling global food demands," Agriculture Minister Todd McClay stated.

"Thus, our focus is on devising practical tools and technology to help farmers cut emissions without hampering production or exports."

The coalition, including the pro-business ACT New Zealand and populist New Zealand First, plans to invest 400 million New Zealand dollars ($245m) in the commercialization of emissions-reducing technologies. Additionally, they will boost funding for the New Zealand Agricultural Greenhouse Gas Research Centre by 50.5 million New Zealand dollars ($31m).

The previous Labour Party government had introduced the "world first" levy in 2022 as part of efforts to achieve net-zero greenhouse gas emissions by 2050.

A significant proportion of New Zealand's greenhouse gas emissions originate from approximately 10 million cows and 26 million sheep.

Jacinda Ardern, the then Prime Minister, argued that the tax was essential to slow global warming, suggesting that farmers could recover costs by charging higher prices for eco-friendly meat.

The Green Party, the third largest in parliament, criticized the government on Tuesday for delaying climate action.

"By exacerbating the climate crisis with oil, coal, and gas, the Government has now relegated half of our agricultural emissions to the too-hard basket led by the industry," said Greens co-leader Chloe Swarbrick.