Shearing the Love
Focus on New Zealand wool
In what has certainly come as a big boost to sheep farmers and the agricultural sector, the government announced that from 1 July 2025 all government agencies must use woollen fibre products in the construction and refurbishment of government buildings - where practical and appropriate.
The importance of wool
New Zealand is currently the world’s third largest wool producer, trailing only China and Australia. Our wool accounts for around 9% of total global wool production.
Home to around 23.3 million sheep, 80% of New Zealand‘s wool clip is ‘strong wool’ that is suitable to use in building products such as carpets, rugs, insulation and acoustic panels.
The 120,000 tonnes of wool that New Zealand produces annually generated $549 million in 2024.The government, however, believes this figure can be improved upon by prioritising a more direct approach to use more natural fibres in government buildings.
New changes
The government has agreed to an amendment to Rule 69 of the Procurement Rules; this rule requires agencies to note the Construction Procurement Guides when procuring construction works (essentially meaning agencies must prioritise wool when possible). The changes will affect two categories of government buildings:
1. New construction works when the maximum total estimated value of the build meets or exceeds $9 million, and
2. Refurbishments when the maximum total estimated value of the work meets or exceeds $100,000.
If an agency has chosen not to use woollen fibres, it must report annually to the Ministry of Business, Innovation, and Employment (MBIE) regarding why the use of woollen fibres was not practical or appropriate.
A developing trend?
This announcement continues a developing trend as the government clearly signals a more supportive approach towards the wool industry.
In November 2024, New Zealand signed the Agreement on Climate Change, Trade and Sustainability (ACCTS) with Switzerland, Costa Rica and Iceland to remove tariffs on hundreds of sustainable goods and services (including wool products). The ACCTS aims to prioritise New Zealand’s sustainable exports.
Alongside the ACCTS, the government also made a raft of changes to the Emissions Trading Scheme (ETS) that limit the ability of farmers to turn their most productive farmland into forestry for the purpose of obtaining carbon credits. While the price of wool continued to drop, many farmers had begun to move away from wool in favour of planting forestry with the perception being that this approach was likely to yield a higher profit than farming sheep. The changes to the ETS provide a further boost to the wool industry.
The benefits of using wool
For close to 150 years, the sheep industry was the backbone of New Zealand’s economy. While the profitability of wool and sheep farming has reduced with the creation and implementation of synthetic fibres in clothing and other manufactured goods, the quality of New Zealand’s wool has not decreased.
Wool outperforms synthetic fibres when it comes to sustainability and longevity.
Wool’s natural qualities allow it to dampen sound and absorb pollutants. As well, wool creates healthier indoor environments by naturally regulating humidity and improving air quality.
What are farmers saying?
The reaction from New Zealand farmers has been, unsurprisingly, overwhelmingly positive. Federated Farmers’ Meat & Wool just-retired chair, Toby Williams said that the government’s announcement was a clear vote of confidence in the future of New Zealand wool as a natural and sustainable product.
Mr Williams praised the long-term effects of the decision, saying, “For too long, synthetic alternatives have dominated the list of preferred construction materials, despite wool being a better option in so many ways.
“In the past, it’s felt like a total slap in the face to see our own Government choosing those synthetic alternatives over sustainable and locally grown woollen products.
“Today’s announcement goes a long way in putting those past wrongs right, and is certainly a very positive step in the right direction.
“To sum it up in two words? Shear brilliance.”
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