Proposed improvements to the New Zealand Emissions Trading Scheme
The first of two planned tranches of improvements to the New Zealand Emissions Trading Scheme (ETS) has been announced following public consultation throughout August and September.
These improvements seek to provide more certainty to scheme participants and create a more effective and fairer ETS.
The key announcements are:
- A new permanent post-1989 forestry activity will be created and will replace the current Permanent Forest Sink Initiative (PFSI).
- A set of technical, operational improvements will be made to make the ETS easier and less costly for forest owners
- A framework for making unit supply decisions will be established, enabling emissions to be capped, restricting the number of units supplied into the scheme and increasing the incentive to reduce emissions.
- If in future the Government decided to allow international units, they would first ensure that the units were of high environmental integrity.
- The $25 per tonne fixed price option for surrenders won’t be changed in 2019.
The Government has also made decisions to improve how forestry is treated in the NZ ETS.