Proposed NZ ETS and Synthetic Greenhouse Gas Levy regulation updates 2021

Overview

Decision

The Government has reached decisions regarding regulation updates to the New Zealand Emissions Trading Scheme (NZ ETS) and Synthetic Greenhouse Gas (SGG) Levy. 

The decisions made are to:

• update unit limit and auction price control settings for 2022-2026 (for details see Tables below)
• update the default emissions factors for waste and natural gas to reflect most recent data on waste and natural gas composition
• update NZ ETS and SGG Levy reference data to reflect updated global warming potentials (GWPs) if a decision is made to update NDC1 or set the first emissions budget in reference to these updated GWPs, at this stage no such decisions have been made. Any resulting updates to reference data will not occur until 1 January 2023 at the earliest
• improve the methodology of the NZ ETS treatment of re-disposed waste from closed landfills so that it will be exempted from NZ ETS obligations
• invite the Minister to report back to Cabinet before the end of 2021 on updating the electricity allocation factor (EAF) methodology and value used for industrial allocation
• correct minor inconsistencies in the schedule of goods covered by the SGG levy, and extend this schedule to better ensure coverage of all imported goods containing SGGs
• agree and implement details to be included in new regulations for an NZ ETS auction monitor.

Read more about the updates to NZ ETS regulations and SGG levy

Review the proposal

The Government recently consulted on technical changes to emissions trading scheme and synthetic greenhouse gas levy regulations. 

Read our consultation document on proposed changes to NZ ETS and SGG levy regulations

The New Zealand Emissions Trading Scheme (NZ ETS) is a hugely important tool for Aotearoa’s efforts to reduce greenhouse gas emissions. 
It puts a price on emissions that encourages those who emit warming gases to reduce them by for example, investing in clean, climate-friendly technologies. 

To make sure the NZ ETS performs as well as it can to reduce emissions, its regulations are tweaked and updated every year. As part of that we wanted to hear from people interested or involved in the NZ ETS. Some of the changes are more significant this year – so it’s worth a look at the consultation if you’re involved in the scheme. 

The consultation included the following proposed changes to NZ ETS and SGG levy regulations:

• Update unit limit and auction price control settings 
• Update the default emissions factors (DEFs) for waste and natural gas fields, and update other DEFs and reference data to reflect new global warming potentials (GWPs) 
• Update the electricity allocation factor used in industrial allocation 
• Improve the methodology that accounts for waste in the NZ ETS 
• Update the schedule of goods covered by the SGG levy 
• Implement new regulations for an NZ ETS auction monitor