Phase out of the one‐for‐two transitional measure from the New Zealand Emissions Trading Scheme

This page has information on the phased removal of the one-for-two transitional measure in the New Zealand Emissions Trading Scheme. 

Phased removal of the one-for-two transitional measure 

The Government has announced it is phasing out the one-for-two transitional measure in the New Zealand Emissions Trading Scheme (NZ ETS) which allows non-forestry businesses to pay one emissions unit for every two tonnes of carbon dioxide equivalent emissions. The Climate Change Response (Removal of Transitional Measure) Amendment Act 2016 will phase out the one-for-two transitional measure from 1 January 2017.

The phased removal of one-for-two will allow the NZ ETS to more effectively support New Zealand to meet our climate change targets, incentivise emission reductions, and help transition New Zealand to a low emissions economy.

The one-for-two transional measure will be phased out evenly across relevant sectors over three years from 1 January 2017. The current 50 percent surrender obligation will increase to 67 percent from 1 January 2017, 83 percent from 1 January 2018, and a full surrender obligation from 1 January 2019 for all sectors in the NZ ETS. This phased approach gives businesses time to plan and adjust, and supports a more stable market.

The removal of one-for-two directly affects NZ ETS participants from the liquid fossil fuel, industrial processes, stationary energy and waste sectors, along with importers of goods and vehicles containing synthetic greenhouse gases. Allocations and entitlements for non-forestry activities will increase with the removal of one-for-two, as these are calculated in proportion to the surrender obligation.

Find out more

For more information about the removal of the one-for-two measure see the fact sheet

Minister's media release: ETS one-for-two subsidy to be phased out.

Regulatory Impact Statement: Improving alignment of the New Zealand Emissions Trading Scheme with New Zealand’s provisional 2030 emissions reduction target

Reviewed:
25/05/16