NZ First is slowing progress on the Government's proposed climate change legislation, leading to a missed deadline for an announcement.
A source close to the situation told Stuff the party has been more intransigent on the issue than the National Party, which Climate Change Minister James Shaw is working with separately to make sure his Zero Carbon Act gets some level of bipartisan support.
An announcement on the policy was planned for before the end of 2018, but no announcement or draft bill has been forthcoming, despite the Ministry for the Environment planning to have the bill in Select Committee by February, according to its website.
However, the parties are confident agreement can be reached and a law introduced in the first half of 2019.
NZ First has not been the only complicating factor, as Shaw is also seeking agreement from the National Party and Labour.
The key holdups have involved the powers of the Climate Change Commission and the ambition of the law itself, in particular its targets.
NZ First MPs were not keen to see a non-political Climate Change Commission given Reserve Bank-like powers to independently set carbon budgets.
The party's MPs were also worried that New Zealand agribusiness would be unfairly disadvantaged with a law that was world-leading - rather than simply good enough to meet international obligations.
They want to make the law credible but not set agricultural emissions targets to the level preferred by the Green Party.
The source described NZ First as essentially to the right of the National Party on the issue.
It is understood that the commission issue is now mostly resolved, however, and the law is not expected to remain in limbo indefinitely.
Shaw would need to get his Zero Carbon Bill through Cabinet before taking it to Parliament, even if he does secure the support of the National Party.
NZ First is not in principle opposed to climate change legislation. The coalition agreement includes a promise to "Introduce a Zero Carbon Act and an independent Climate Commission, based on the recommendations of the Parliamentary Commissioner for the Environment".
This is followed by an agreement to soften the blow for agriculture if it is included in a new-look Emissions Trading Scheme.
The National Party has signalled an openness to working with the Government on the law, leading to several meetings between Shaw and National MPs, including Simon Bridges and Todd Muller.
It's understood National MPs are perplexed at the slowness of the process.
But getting the National Party on board has been a further complicating factor - and Shaw is understood to be more interested in a lasting law than a perfect one.
Bipartisan consensus would signal to the wider sector that the law would not change when the Government changed - as the Emissions Trading Scheme did before it.
In a statement, Shaw said he was confident the bill would be introduced early in the sitting calendar.
"For me the process has always been about building a consensus that addresses all sectors' concerns - including industry, agriculture and iwi, and those concerns are being addressed," Shaw said.
"The legislation is about building an institution through an independent Climate Change commission which will last multiple changes of government. So I have chosen to take time to build bipartisan consensus rather than rush it through the House."
National climate change spokesman Todd Muller said he was negotiating with the Government in good faith.
"I can't speak for the Government, or any internal disunity or squabbling they may be having, but as far as National is concerned negotiations are ongoing and we will continue to engage in good faith," Muller said.
"We are taking a principled approach to this complex issue, allowing science to paint the picture with technology leading the way, pacing ourselves at the pace of our competitors, and being relentlessly honest about the economic implications of the transition.
"If we want to see an Independent Climate Change Commission that is truly enduring it will need to have broad cross-party political consensus.
"If we can agree with the Government, that's a great outcome. If we can't then we will be opposing from a principled position."
WHAT IS THE ZERO CARBON ACT?
A Zero Carbon Act would set New Zealand's greenhouse gas emissions targets into law and set up an independent Climate Change Commission to help the country meet them by setting "carbon budgets".
It is not yet clear whether that commission would be purely advisory or have some statutory power.
The Government has consulted on three different targets for 2050: net zero carbon emission with agricultural methane emissions not included, net zero carbon emissions with "stabilised" agricultural emissions, and a full net zero limit on all greenhouse gas emissions.
The law, suggested by former parliamentary commissioner for the environment Jan Wright, is based on the United Kingdom model, where climate change has mostly been depoliticised and per-person emissions are falling.
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