Making the Emissions Trading Scheme fair, efficient and future proof


The ETS is a key tool for supporting Aotearoa New Zealand’s efforts to reduce greenhouse gas emissions.

MfE has  begun consultations which seek to improve two important areas of the ETS: market governance and industrial allocation.

Market governance

This consultation aims to ensure the ETS has a comprehensive governance framework that appropriately regulates advice, trading, and market conduct in the scheme. Currently, there is no single overarching market governance framework.

Without addressing these issues there is the risk of misconduct in the NZ ETS and the undermining of New Zealand’s climate goals.

MfE is seeking feedback on proposals to address:

  • governance of advice
  • governance of trading
  • governance of market conduct
  • appointing a regulator.

Find out more about the market governance consultation proposals

Industrial allocation

The settings that determine how many emissions units are allocated by the Government to eligible industries are more than a decade old. Being allocated one emission unit by the Government provides a company with the right to put the equivalent of one tonne of carbon into the atmosphere.

Current allocations are unlikely to be sustainable in the context of New Zealand’s future emissions budgets.

This policy needs updating to ensure it is aligned with New Zealand’s climate goals while continuing to offset the risk of exporting our emissions offshore to countries with weaker climate policies (known as emissions leakage).

Find out more about the industrial allocation proposals

The consultations run from 9am Thursday 8 July to 5pm Friday 17 September 2021.