The New Zealand Emissions Trading Scheme (NZ ETS) is New Zealand’s key tool for reducing emissions and meeting our emission reduction targets. Its settings need to reflect the Government’s decisions about how New Zealand should meet its targets.
Following the 2015/16 review of the NZ ETS, the Government made in-principle decisions on four proposals to improve the operation of the NZ ETS in the 2020s. The proposals 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. Implementation and specific settings for the in-principle ETS decisions will be informed by the work of the Transition Hub.
Decisions about how we meet our 2030 target will need to be reflected in the NZ ETS, including the number of units auctioned in the NZ ETS and the level of the limit on international units. The review followed a two-stage process. Stage one considered the priority issues of moving to full surrender obligations and managing the costs of this. It concluded in May 2016 with a Decision to phase out the one-for-two transitional measure from the NZ ETS.
For a summary of submissions from stage one see New Zealand Emissions Trading Scheme Review 2015/16: Summary of stage one priority issues consultation responses. Stage two of the review focused on the design and operation of the NZ ETS, to assess how the settings can best support New Zealand to meet the 2030 target and subsequent targets. Stage two concluded in July 2017 with in-principle decisions on a package of four proposals to improve the operation of the NZ ETS in the 2020s.
See Outcomes from stage two of the NZ ETS Review 2015/16. Submissions on stage two of the review reinforced that stakeholders want a clear and stable policy direction and continued engagement with the Government on the NZ ETS. For a summary of submissions from stage two of the review see New Zealand Emissions Trading Scheme Review 2015/16: Stage two submissions