New Zealand Emissions Trading Scheme Announcement

July 26, 2017
 

26 July 2017

Kia Ora

The Government has announced a package of decisions that will improve the operation of the New Zealand Emissions Trading Scheme in the 2020s. This email provides an overview of the decisions and where to find further information.
Four decisions to improve the NZ ETS
The Government has made in-principle decisions on a package of four changes to how the NZ ETS will operate in the 2020s. These are to:
• introduce auctioning of units, to align the NZ ETS to our climate change targets
• limit participants’ use of international units when the NZ ETS reopens to international carbon markets
• develop a different price ceiling to eventually replace the current $25 fixed price option
• coordinate decisions on the supply settings in the NZ ETS over a rolling five-year period.
Today’s announcements will not change participants’ interaction with the scheme
There will be no immediate changes to how the NZ ETS operates. The decisions are in-principle, and further work and consultation will be required before they are implemented.
Implementation decisions will be informed by New Zealand’s wider climate change work programme. This includes, for example, work that is underway to determine options for meeting the 2030 target, and the outcome from the Productivity Commission inquiry for transitioning to a lower emissions economy.
Decisions on other issues considered as a part of stage II
Stage II of the NZ ETS also looked at forestry accounting, free allocation, and operational and technical improvements to the NZ ETS. The Ministry for the Environment will report back to Ministers on these issues in the first half of 2018, and organise further stakeholder engagement and consultation to inform this further work.
For more information about the proposals and other issues considered in the review please see
Link to Minister Bennett’s press release: www.beehive.govt.nz/release/new-tools-help-meet-climate-change-targets
Link to the Ministry for the Environment’s web content: www.mfe.govt.nz/nzets/2015-16-review-outcomes
or email NZETSreview@mfe.govt.nz