The NZ Emissions Trading Scheme
This page explains the ETS as passed into legislation in September 2008. A bill is now (October 2009) before Parliament to amend the ETS legislation - please click here for more details.
About the Scheme
The ETS is the core element of the New Zealand Government's response to Climate Change, and provides the means to meet its obligations under international agreements (e.g. the Kyoto Protocol and its probable successor agreements). It is now law, having been passed by Parliament in September 2008.
The ETS is a carbon trading scheme, similar in concept and design to schemes already operating in Europe and the USA. However, the ETS differs from these schemes in that it is an "all gases, all sectors" scheme, meaning that all GHG emitting activities are included (stationary energy, road transport, agriculture, other industrial processing and waste). Forestry is aanother part of the scheme, enabling land owners to generate credits from forest growth, as well as obligations when felling trees.
Impacts of the Scheme
Essentially, the ETS places a price on greenhouse gas emissions, with certain businesses having obligations to buy carbon credits to cover the emissions from their activities or products.
However, the ETS has been designed so that only a small number of businesses have statutory obligations; primarily those at the top of the supply chain (such as mining companies, fuel importers).
Most businesses and individuals will only be affected by higher prices, from increases in energy costs as the costs of the carbon credits are passed down to consumers.
The ETS has many mechanisms in place to gradually introduce its impacts; for example, road transport and agriculture will not enter the scheme until 2011 and 2013, respectively; and large industrial emitters operating in certain export markets (e.g. Rio Tinto and aluminium), and farmers, have free allocation of credits for many years. In effect, until there is no free allocation, the costs for meeting the Kyoto obligations will partially be met by the general tax payer.
By placing a price on emissions, the scheme is expected to encourage, over time, investment in less polluting technologies, and changes in behaviour (such as more efficient use of energy).
How CarbonGroup can assist
CarbonGroup can assist businesses in two main ways:
- By providing advisory services to businesses directly affected by the Scheme (i.e. those required to buy carbon credits to meet their statutory obligations).
- By providing assistance to any business wishing to improve the energy and resource efficiency of their business, and so reduce their costs. Undertaking a carbon footprint and implementing a reduction action plan, with targets, are proven ways for companies to achieve energy, and therefore cost, reductions.