The NZ Govt has acted up provide some teeth to the ETS. Following is a summary of the announced changes made.
Following consultation held between December 2015 and February 2016, the Government has passed the Climate Change Response (Removal of Transitional Measure) Amendment Act which will phase out the one-for-two transitional measure in the NZ ETS. This change will take effect from 1 January 2017.
The one-for-two measure allows non-forestry participants to surrender only one emissions unit for every two tonnes of carbon dioxide equivalent (CO2-e) of greenhouse gas emissions.
The one-for-two measure applies to the following:
Surrender obligations for non-forestry participants in the liquid fossil fuels, stationary energy, industrial processes and waste sectors. Currently the surrender obligation for these sectors is halved [actually the Govt subsides these industries…but lets not split hairs.],so they are required to surrender only one emissions unit for every two tonnes of CO2-e emissions.
Free allocations of units for emissions-intensive and trade-exposed industrial activities. Currently the allocation is halved [..spin..]in proportion with the surrender obligation faced by non-forestry participants.
Entitlements of units for non-forestry removal activities (e.g. embedding greenhouse gases in produces, or exporting products containing certain greenhouse gases). Currently these entitlements are halved [..more spin..] in proportion with the surrender obligation faced by non-forestry participants.
Importers of goods and vehicles containing synthetic greenhouse gases (SGG). Importers of goods containing SGG are required to pay the SGG levy on importation. Vehicles containing SGG also pay the SGG levy when the vehicle is first registered in New Zealand. Currently the SGG levy is halved [..spin, spin, spin..] in proportion with the surrender obligation faced by non-forestry participants.
The one-for-two measure will be phased out evenly from 1 January 2017, for all of the above groups, until full obligations are reached (i.e. participants surrender one unit for every tonne of CO2-e emissions) from 1 January 2019.
The change to non-forestry surrender obligations will be accompanied by proportionate increases to non-forestry allocations and entitlements, and to the synthetic greenhouse gas levy. The increases to non-forestry surrenders, allocations and entitlements are shown below – how the phase out will work..:
2017 2/3 (67%) 1 unit for every 1.5 whole tonnes of CO2-e emissions
(Surrender due 31 May 2018)
2018 5/6 (87%) 1 unit for every 1.2 whole tonnes of CO2-e emissions
(Surrender due 31 May 2019)
2019 100% 1 unit for every whole tonne of CO2-e emissions
(Surrender due 31 May 2020)
The changes to one-for-two do not apply to forestry participants, as they already surrender one unit for every tonne of CO2-e emissions.
Should you require further information on how this change will affect you please review the fact sheet available here or contact 0800 CLIMATE (0800 254 628). Information about the ETS Review can be found here.