Release of updates to NZ ETS regulations and SGG levy

Amendments and updates to the NZ ETS and SGG Levy regulations are considered every year under the Climate Change Response Act 2002. This process seeks to meet legislative requirements and address policy issues. Proposals were consulted on during April and May 2021.

The Government has recently made decisions on updates relating to these proposals. 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.

Updates to NZ ETS price control settings

  Minimum price below which units must not be sold by auction ($) Trigger price for sale of reserve amount of New Zealand units ($) Reserve amount of New Zealand units (millions)  
Calendar Year Current Updated Current Updated Current Updated
2022 $20.40 $30.00 $51.00 $70.00 7.0 7.0
2023 $20.81 $32.10 $52.02 $78.40 7.0 7.0
2024 $21.22 $34.35 $53.06 $87.81 7.0 7.0
2025 $21.65 $36.75 $54.12 $98.34 6.9 6.8
2026   $39.32   $110.15   6.7

Updates to NZ ETS unit limit settings

  New Zealand units available by auction (millions)* Approved overseas units used (millions) Overall limit on units (millions)
Calendar Year Current Updated Current Updated Current Updated
2022 26.3 26.3 0 00 34.5 34.5
2023 25.6 25.6 0 0 34.5 34.5
2024 24.2 25.0 0 0 32.9 32.9
2025 22.4 23.3 0 0 31.1 29.6
2026   21.7   0   27.9

* The total number of NZUs available to be sold at auction includes the reserve amount of New Zealand units, see table above.