NZ ETS review conclusions
The Government has announced a package of decisions that will improve the operation of the NZ ETS in the 2020s.
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.
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.
Stage II of the NZ ETS also looked at forestry accounting, free allocation, and operational and technical improvements to the NZ ETS. We 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:
Minister Bennett’s press release: www.beehive.govt.nz/release/new-tools-help-meet-climate-change-targets
the Ministry for the Environment’s web content: www.mfe.govt.nz/nzets/2015-16-review-outcomes