Human activities—including the extraction and use of fossil fuels (coal, oil, and natural gas), steel production, and land-use change (e.g., land clearing), release carbon dioxide (CO2) to the atmosphere, while biospheric processes such as photosynthesis and CO2 uptake by forests remove CO2 from the atmosphere. Having a good understanding of CO2 sources and sinks, both natural and human-generated, and the balance between the two is crucial for formulating strategies to reach net-carbon zero. In this study, we comprehensively assessed the balance of natural and human-driven sources and sinks of CO2 for Australia and New Zealand (referred to as the Australasia carbon budget) for the decade spanning 2010–2019.

Using a combination of observations, models and fuel consumption and activity data, we estimate that the region as a whole (Australia + NZ) is close to carbon neutral over the last decade (2010-2019). New Zealand is on average a net CO2 sink. This is mostly due to the significant sink provided by New Zealand’s native forests and plantation forestry, which is five times greater than New Zealand’s fossil fuel emissions of CO2 from human activities. The CarbonWatchNZ Endeavour Research Programme (2018-2023) has completed additional observations and modelling that supports this result. 

This study marks an important step toward a more comprehensive understanding of the net CO2 balance in both countries, facilitating the improvement of carbon accounting approaches and strategies to reduce emissions. Even though New Zealand is currently a net sink, it does not reduce or remove the need for NZ’s international commitments to reduce emissions. New Zealand’s carbon sink offsets less than 1% of annual global CO2 emissions, and total emissions are still increasing.

It's important to note that this study did not attempt to assess New Zealand’s methane (CH4) budget, a more potent greenhouse gas than CO2. Human-driven emissions of methane in 2021 were 43% of New Zealand’s gross greenhouse gas emissions, according to the national inventory (Ministry for the Environment, 2023). Adding methane emissions to New Zealand’s total carbon balance would result in a reduced sink. The NIWA-led MethaneSAT project is extending methane emissions observations using ground based and satellite data to better inform New Zealand’s methane inventory.