Latest update on New Zealand's net position

This page provides the latest update on New Zealand's net position under the Kyoto Protocol. This is used for tracking progress towards our Kyoto Protocol commitment over 2008-2012. Background information is given to provide context.

Latest net position

It is likely that New Zealand will meet its greenhouse gas emissions reduction target for commitment period 1 (2008-2012) under the Kyoto Protocol with a surplus of 123.0 million Kyoto units. This is our net position under the Kyoto Protocol (ie, the net position).

Based on the October 2014 carbon price of NZ$0.16, the surplus units have a value of $20 million.

Our emissions over the first commitment period

New Zealand’s gross greenhouse gas emissions (emissions) were 372.8 million tonnes of carbon dioxide equivalent (Mt CO2-e) over 2008-2012. These emissions were partially offset by 71.6 Mt CO­2-e of sequestration from forestry. Therefore New Zealand’s net emissions over the first commitment period were 301.2 Mt CO2-e, which was 8.4 Mt CO2-e below our target.  The table below gives a breakdown of these emissions by sector.

New Zealand’s annual emissions over the 2008-2012 Kyoto Protocol Commitment Period 1 broken down by sector 

 

2008

2009

2010

2011

2012

Total

Energy

34.6

31.7

31.6

31.2

32.1

161.29

Industrial processes

4.1

4.2

4.5

5.3

5.3

23.41

Solvents

0.0

0.03

0.03

0.03

0.03

0.15

Waste

3.9

3.8

3.7

3.6

3.6

18.63

Agriculture

33.2

33.4

33.6

34.2

35.0

169.32

Forestry

           

Net Removals

-14.2

-12.3

-14.4

-15.5

-15.1

-71.6

Deforestation

3.2

5.6

4.1

3.4

4.0

20.2

Gross removals

-17.4

-18.0

-18.5

-18.8

-19.1

-91.8

Total

61.5

60.8

59.1

58.9

60.9

301.2

All units are in Mt CO2-e.  Numbers may not add to totals due to rounding to one decimal place.

Kyoto units to balance emissions

Parties to the Kyoto Protocol use Kyoto units to track their progress against greenhouse gas reduction commitments. Each Kyoto unit represents one tonne of CO2-e. At the end of a ‘true-up’ period, which is likely to be in late 2015 or early 2016, each party must have enough Kyoto units to account for their gross emissions (see below). 

In 2007, the Government issued 309.6 million Assigned Amount Units (AAUs) which are a type of Kyoto Protocol unit to account for our emissions. As of October 2014, 7.5 million of these AAUs have moved out of the Government account, while 122.1 million Kyoto units have been surrendered to the Government through the New Zealand Emissions Trading Scheme (NZ ETS) (see table below).  It is anticipated that New Zealand will receive 71.6 million Removal Units from forestry activities (RMUs) at the start of the true-up period (see table) for greenhouse gas removals by forests.

Kyoto units surrendered under the NZ ETS are recognised on an accrual accounting basis when it is estimated that emissions have occurred (as opposed to accounting for them when they are surrendered by participants).

If the current carbon prices continue, we expect further Kyoto units to be surrendered into the Government account before 30 May 2015.  After this date, Kyoto units can no longer be surrendered under the NZ ETS. 

Reconciling New Zealand’s emissions and Kyoto units in the Government Account 

  April 2014   April 2013
New Zealand’s emissions
Mt CO2-e1
Total emissions
+372.8
+9.3
+363.5
Forestry sequestration Removal Units (RMUs)
-71.6
+5.7
-77.2
Net emissions
301.2
+14.9
286.3
 
Kyoto units in the Government Account
Millions of units
Initial Assigned Amount Units (AAUs)
309.6
 
309.6
Purchases by the Government
+0.1
0.0
+0.1
Transfers to Projects to Reduce Emissions (PRE)
-4.9
-1.7
-3.2
Transfers to Permanent Forest Sink Initiative
-1.4
-0.7
-0.7
New Zealand Units converted to AAUs
-1.2
0.0
-1.2
AAUs projected to remaining PRE projects
0.0
+1.7
-1.7
Kyoto units surrendered via NZ ETS2
+90.0
+77.0
+13.0
Current Kyoto unit balance
392.0
76.3
315.9
 
New Zealand’s net position
90.8
61.2
29.6
  1. MtCO2-e = million tonnes of carbon dioxide equivalent.
  2. NZ ETS = New Zealand Emissions Trading Scheme.

Notes: Numbers may not add to totals due to rounding to one decimal place.
Sequestration from forestry is actually represented by RMUs in the Kyoto Protocol accounting framework.

Graphic representation of the net position

Graphic representation of the net position

Notes: Total emissions over 2008-2012 (left) and the balance of Kyoto units to account for these (right) as of 1 April 2014.
Numbers may not add due to rounding to one decimal place.
Sequestration from forestry is represented by RMUs in the Kyoto Protocol. 

Reviewed:
21/11/14