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Hot now - submissions due on changes to the Emissions Trading Scheme

September 18, 2018

Contacts

Partners Sally McKechnie
Senior Associates Joanna Lim

Climate change

New Zealand’s political and economic climate is warming up to new measures to reduce our greenhouse gas emissions and achieve a zero carbon economy.

The Government is currently focusing on improving New Zealand’s Emissions Trading Scheme (ETS), and how the ETS works with forestry. They are keenly interested in talking with stakeholders to make sure that the changes are workable for business, and want to hear from you.

Consultation on two sets of improvements to the ETS, proposed by the Ministry for the Environment closes at 5pm this Friday 21 September, so now is the time to have your say, in shaping the improvements that are likely to affect you and your organisation.

Improvements to the New Zealand Emissions Trading Scheme:

The Ministry has released a consultation document that sets out proposals on how to improve the fundamental framework of the NZ ETS. It reviews the following:

  • Proposals on the supply of units into the ETS including greater consistency and transparency for decisions about this supply, such as:

    • Coordinated decision-making with an annual process for setting and announcing the limit on unit supply on a rolling five-year basis;
    • Ways of auctioning units;
    • Replacement of the de facto current price ceiling ($25 fixed price) mechanism - both the mechanism itself, and lifting the level of the fixed price as an interim measure;
    • Bringing back international units, with limitations;
    • Phase-down of industrial allocations.
  • Operational improvements to the ETS to facilitate engagement of participants with the scheme, including:

    • Seeking information to inform decisions on market governance (eg considering if there is a need for licensing and financial disclosures);
    • Market information, including improving the dedicated NZ ETS website and publishing firm-specific emissions data;
    • More effective compliance and penalty tools.

The consultation document is available at http://www.mfe.govt.nz/consultation/ets

A Better Emissions Trading Scheme for Forestry:

As part of these broader improvements to the ETS, the Ministry for the Environment is jointly running consultation on a better ETS specifically for forestry, with Te Uru Rākau (Forestry New Zealand, part of the Ministry for Primary Industries).

Forestry has been prioritised as an area of focus to support the Government’s programme of forest planting in New Zealand. The improvements are intended to reduce complexity and barriers for both new and existing forestry owners for participation in the ETS.

The consultation document is available at https://www.mpi.govt.nz/news-and-resources/consultations/a-better-ets-for-forestry

Email your submission on either proposal to etsconsultation@mfe.govt.nz.

The wider context

The consultations are part of Government-wide initiatives including those from the Productivity Commission, the Parliamentary Commissioner for the Environment, and the Climate Change Adaptation Technical Working Group.  There is real momentum in this area and there is no doubt that climate change policy and risks and opportunities are a key pillar for all sectors in New Zealand.

Get in touch

For detailed advice on the ETS please contact Joanna Lim, Senior Associate in our Commercial practice - joanna.lim@simpsongrierson.com.

For assistance with government processes and frameworks, contact Sally McKechnie, Partner in our Public Law and Central Government team - sally.mckechnie@simpsongrierson.com.

For assistance with the forestry sector please contact Greg Allen, Partner - greg.allen@simpsongrierson.com, and Tara Wylie, Senior Associate in our Resources and Infrastructure team - tara.wylie@simpsongrierson.com.

Contributors charlotte.doyle@simpsongrierson.com