New Zealand Emissions Trading Scheme market information portal

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NZ ETS market information portal

This landing page gives participants in the New Zealand Emissions Trading Scheme (NZ ETS) and other stakeholders a portal to NZ ETS market information.

The purpose is to make it easier to access NZ ETS-related information to support informed-decision making by participants. By providing market information clearly in a way that ensures equal access, we are seeking to ensure that participants are able to achieve compliance with their NZ ETS obligations at minimum costs.

What is NZ ETS market information?

NZ ETS market information is any information that may help NZ ETS participants to make informed decisions in relation to NZUs, particularly understanding and making forecasts of future NZU prices.

The market information is important for a well-functioning NZ ETS because it enables participants to make informed decisions regarding their emissions abatement options. Broadly, the decision that needs to be made is whether to purchase NZUs from the market or undertake abatement activities to directly reduce emissions. The NZU price is a key variable as part of this decision-making.

By providing market information clearly, in a way that ensures equal access, we are seeking to ensure that participants are able to achieve compliance with their NZ ETS obligations at minimum costs.

There are three types of market information

  • Data relating to market fundamentals - the supply and demand of NZUs now and in the future. This information is important for forming views about future NZU prices.

  • Data relating to market transactions - NZUs being transferred between accounts, typically through trades that take place on the secondary spot market. Both market participants and other stakeholders such as financial intermediaries are regularly engaged in secondary spot market trading. This information is important because it provides transparency regarding the trading of NZUs in the market.

  • Qualitative information relating to policy and regulatory changes – including policy or regulatory changes to the NZ ETS itself and in some instances other policies and legislation. This information can be important for forming views about future NZU prices.

Access data related to these three types of market information by clicking on the tabs.

 

There are three types of information that are relevant to market fundamentals.

  • Emissions, removals and forest land
  • Emissions unit volumes
  • The design of the NZ ETS.

Emissions, removals and forest land

This information includes the levels of actual emissions (ie, emissions from a range of emitting activities such as industrial processes) and removals (for example, carbon absorbed as forests grow) that take place in New Zealand expressed in terms of CO2 equivalent.

An increase in emissions from activities facing a surrender obligation implies that the demand for NZUs will go up as participants will need to source and surrender a higher number of NZUs in order to ensure compliance. In contrast, a rise in carbon removal activities will generally increase the available supply of NZUs.

The following factors indirectly affect emissions and removals:  general economic conditions, price levels (eg, oil, dairy or timber prices), weather patterns, available abatement options, and other policies that may impact on emissions and removals indirectly. We do not include any information about those factors on this website.

See below for information about policies that directly affect the NZ ETS.

Historical information

Each year the Environmental Protection Authority (EPA) reports on activity in the New Zealand Emissions Trading Scheme (ETS). The EPA release three reports: the Annual ETS Report, the Synthetic Greenhouse Gas Levy Report, and an informal factsheet. The reports provide information on how many businesses were in the ETS, how much greenhouse gas they emitted or removed, and give year-on-year comparisons.

The emissions reported by year for each activity are as known or estimated at a point in time in this reporting and do not take into account subsequent amendments at the activity level. For example, the data in the 2014 ETS reports is still as reported when these reports were published and has not been revised since that time.

When forest owners’ have indicated they intend to deforest

Deforestation surveys are completed annually and collect information on the extent of forest owners' intentions to deforest or take up the offsetting provision in the NZ ETS. Offsetting is where a carbon equivalent forest is established to offset the liabilities from the deforestation of an area of pre 1990 forest land, this can be applied for through MPI. Under the Kyoto Protocol and the UNFCCC (United Nations Frame work Convention on Climate Change), New Zealand must report CO2 emissions resulting from deforestation. The information on deforestation also provides crucial information for domestic and international climate change policy, NZ ETS financial forecasting and helps MPI assess the broader impacts of changing land use.

Historical information: planted production forest land

The NEFD is an annual report that Te Uru Rākau publishes providing detailed descriptions of New Zealand's planted production forest. The data collected for the NEFD is used to inform government policy to meet a range of international reporting obligations and to assist with wood availability forecasts. This information is also a useful starting point for investigating wood processing opportunities in New Zealand.
The yield tables contain the total standing volume of wood per unit area of forest to be expected at different ages of the trees (volume, total recoverable volume by three log type volumes (pruned logs, unpruned logs and pulp logs), together with any thinning volume by annual age class.) Each yield table is labelled with a code that defines the wood supply region, species group and tending regime. Yield tables and Wood Availability Forecasts for all regions in New Zealand are at the link above.

Historical information: forest land registered in the NZ ETS (hectares registered, added, removed)

In June 2018, around 50 percent of all post-1989 forest land was registered in the NZ ETS. The link above includes historical information on post-1989 forest land that has been registered, added and removed, and pre-1990 forest land that has been deforested each year under the NZ ETS.

Emission unit volumes

This information includes the number of NZUs that have been allocated, including those that have been and are expected to be allocated but not yet surrendered (also known as banked). The volumes of international units are also relevant in the case that international units are substitutable for NZUs.

Information relating to the future

This information is comprised of Government forecasts of unit surrenders and unit allocations in the NZ ETS for the next five calendar years. These forecasts were calculated based on current NZ ETS settings and policies.

Numbers of emissions units expected to be surrendered in the future

Participants in the NZ ETS are required to report their emissions and surrender units to the Government for those emissions.

Currently five sectors are required to surrender units for their emissions:

  • liquid fossil fuels (e.g. petrol, diesel)
  • stationary energy and industrial processes (e.g. gas mining, coal importing, steel producers)
  • synthetic greenhouse gases (e.g. bulk importers of synthetic greenhouse gases)
  • waste (e.g. landfill operators)
  • pre-1990 forestry for deforestation and post-1989 forestry for harvesting or on deregistration.

Forecasts regarding NZU surrenders in the annual Budget Economic and Fiscal Update. Find this information here. See for example page 121 of the 2018 Budget Economic and Fiscal Update. We have converted this information from revenue back into NZU volumes in the following table:

 

2018

2019

2020

2021

2022

Forecast unit surrenders per calendar year (millions of emissions units)

33.9

39.4

42.9

45.0

45.8

Table figures are based on the October/March Baseline Updates used for fiscal forecasting and then adjusted to cover calendar years  2018-2021 with the exception of 2021/2022.

Forecasts are based on current NZ ETS settings and policies. Any changes to NZ ETS settings or policies made as a result of proposals out for consultation in 2018 are likely to have a stronger effect on projections from 2021 onwards. Any changes to forestry accounting rules made as a result of proposals out for consultation in 2018 will change future projections.

Numbers of emissions units expected to be allocated in the future (ie, supplied to market)

Units are also supplied into the market for:

  • forestry emission removals for carbon absorbed as forests grow
  • other removal activities, for example exporting synthetic greenhouse gases or producing and exporting methanol
  • industrial allocations for trade-exposed and emissions intensive industries.

Forecasts regarding NZU allocations in the annual Budget Economic and Fiscal Update. Find this information here. See for example page 121 of the 2018 Budget Economic and Fiscal Update. We have converted this information from expenses back into NZU volumes in the following table:

 

2018

2019

2020

2021

2022

Forecast unit allocations per calendar year (millions of emissions units)

31.0

25.3

26.0

26.0

26.0

Table figures are based on the October/March Baseline Updates used for fiscal forecasting and then adjusted to cover calendar years for 2018-2021 with the exception of 2021/2022.

Forecasts are based on current NZ ETS settings and policies. Any changes to NZ ETS settings or policies made as a result of proposals out for consultation in 2018 are likely to have a stronger effect on projections from 2021 onwards. Any changes to forestry accounting rules made as a result of proposals out for consultation in 2018 will change future projections.

Numbers of international units expected to be surrendered in the future

If participants in the NZ ETS are able to surrender international units to the Government for their emissions, then the extent to which this is able to take place is also relevant for forming views of future NZU prices. At present, participants are not able to do so as the NZ ETS has been closed to international unit since June 2015.

The Government has decided to limit NZ ETS participants’ use of international units when the NZ ETS reopens to international carbon markets. The level of this limit and how it will be implemented have not yet been decided. When a decision is taken regarding this limit, information will be provided here.

Numbers of international units expected to be purchased in the future

The international carbon markets and opportunities for linkages that will exist in the 2020s are still developing. New Zealand has a project, run jointly by the Ministry for the Environment and Ministry of Foreign Affairs and Trade, which is assessing options for markets that meet our criteria.

This is ongoing and we will inform market participants here when we are able to do so. Information about international discussions is only possible to release when all Parties are comfortable with doing so.

The Government will only use international carbon markets after 2020 if it’s certain:

  • the credits/units are genuine and have environmental integrity (ie, the emissions reductions are real)
  • we will maintain substantive domestic progress towards our transition to our chosen emissions reductions target
  • it makes economic sense
  • we can do it in a way that will maintain a steadily rising domestic carbon price, so that incentives stay in place for domestic reductions options like forestry.

The Government is involved in a number of international efforts to ensure the environmental integrity of international carbon markets in the future. This includes negotiations through the United Nations Framework Convention on Climate Change, providing leadership to establish the ‘Ministerial Declaration on Carbon Markets’ and a range of other initiatives.

Historical information

Number of NZUs transferred for industrial allocations

For Industrial Allocations, applicants can choose to apply for their allocation either in advance (with a square-up after the end of the year) or in arrears. The total units transferred for industrial allocations during a specific financial year is available from the annual report on the emissions trading scheme, available from the EPA website.

Link to information: here

Each year after the final allocations have been made the EPA publishes the total number of units allocated to each applicant for the production that occurred in a given year.

Link to information: here

Numbers of emissions units currently in private accounts (ie, banked), including international units

The number of units eligible for use in meeting NZ ETS obligations (ie, NZUs and NZ originated Assigned Amount Units) held by private account holders is updated on an annual basis and is available at the link above. Accounts are categorised into one of three categories – those primarily associated with transfers of forestry units from the Crown, those primarily associated with registered non-forestry activities in the NZ ETS, and those falling into neither of these two categories.

 

The number of Kyoto Units (i.e. units recognised under the Kyoto Protocol, this excludes NZUs as these are a NZ domestic unit) held in each account is published in the Kyoto unit holdings by account report available from the public information and reports on the New Zealand Emissions Trading Register. These account holdings are updated on 1 January each year to provide end-of-year holdings for 31 December one year prior (i.e. on one January 2019 this will be updated to show holdings as at 31 December 2017).  

 

Details of units surrendered per annum broken down into unit type are available from the Holding & transaction summary report on the New Zealand Emissions Trading Register – the units surrendered column.

Link to information: here 

 

  • Number of NZUs transferred for ETS removal activities

Participants registered for removal activities in the emissions trading scheme are entitled to receive NZUs for their activity. Details of units transferred during each financial year for each removal activity are available from tables 6 and 6.1 of the ETS Annual reports.
Link to information: here
 

 

  • NZUs transferred for PFSI and NGA

The Permanent Forest Sink Initiative (PFSI) issues units for removals on registered post-1989 forest sink land in a similar manner to the NZ ETS. From 2008 to 2012, AAUs were issued to PFSI participants. From 2013 onwards, NZUs have been issued. Directions for these transfers including the number of units and recipient account information are available from the “Ministers’ directions” report available from the public information and reports section of the New Zealand Emissions Trading Register.

Link to information: here
 

  • NZUs transferred for PFSI per calendar year is available from figure 6 of the EPA’s Factsheet on the ETS
  • Link to information: here
     

Volumes of emissions units cancelled in the Register per annum are available from the ’Units cancelled (voluntary)’ column of the ’Holding & transaction summary’ report available from the public information and reports section of the New Zealand Emissions Trading Register.

  • Note, these unit cancellations include the Crown voluntary cancellation of 14,499,733 NZUs in August 2016 which was required for technical reasons as part of the transition from the old to the current Register.
  • Some Account Holders elect to have details of their unit cancellations published. These details are available from the EPA’s website.
  • Link to information here

The design of the NZ ETS

This information includes the policy design of the NZ ETS that affects NZU volumes (ie, cap on unit supply, rules regarding industrial allocation and the treatment of international units).

The policy design of the NZ ETS as at August 2018 is summarised in A guide to the New Zealand Emissions Trading Scheme which MfE commissioned in partnership with Motu Economic and Public Policy Research. This report includes a brief history of the NZ ETS which summarises how the design of the NZ ETS has changed since its inception in 2008.

There are three types of historical information that are relevant to market transactions.

It is important to understand that not all of these emission unit transfers represent trades in the market. Some of these unit transfers will have occurred as participants with multiple accounts move units between them, or market intermediaries aggregate or disaggregate units from individual participants prior to (or following on from) market trades.

There are three types of information that are relevant to market transactions.

  • Policy changes that affect the design of the NZ ETS
  • Policy and regulatory changes that affect operational or technical elements of the NZ ETS
  • Policy changes to other relevant legislation

Information about policy changes that affect the design of the NZ ETS

These changes can directly influence supply and demand of NZUs. Such policy changes are most relevant, and information about these changes can also be viewed as information about market fundamentals.

Proposed changes to the design of the NZ ETS

  • For information regarding the current proposed improvements to the framework of the NZ ETS see here.
    • The Government is proposing improvements to the New Zealand Emissions Trading Scheme (NZ ETS) and is seeking feedback. This consultation document sets out proposals primarily focused on improving the framework of the NZ ETS so that it is a credible and well-functioning scheme that helps us meet our climate change targets.
  • For information regarding the current proposed changes to forestry in the NZ ETS see here.
    • There is also a second set of proposals related to forestry to reduce complexity and other barriers to forestry owners being part of the scheme. The consultation document and related information can be read on the Ministry for Primary Industries website.

Information about policy and regulatory changes that affect operational or technical elements of the NZ ETS

Policy and regulatory changes that affect operational or technical elements of the NZ ETS changes are also important but they do not always impact NZU supply and demand, or in some cases only do so indirectly. Typically these changes will be more relevant for operational and practical reasons rather than due to their impact on NZU supply and demand.

Current proposed changes

  • For information regarding current proposed policy and regulatory changes see here.

Information about policy changes to other relevant legislation

Policy changes to other legislation can also be relevant in some instances. For example, the Zero Carbon Bill is relevant to the NZ ETS market as it is likely to affect the level of domestic ambition and therefore NZU supply and demand. Significant announcements about other policies and legislation such as the Zero Carbon Bill will be made available on this website.

Current proposed changes

  • For information regarding current proposed policy changes to other relevant legislation see for example the proposed Zero Carbon Bill available here
2018

21 September - Consultation on the NZ ETS improvements including forestry closed. We are now working through the submissions and feedback. Thanks for sharing your views. Find out more

2019

The phased removal of the one-for-two transitional measure will result in full obligations for activity occurring during 2019. Note, forestry has always faced full surrender obligations.

1 January -  Surrender obligations across all sectors reaches 100% (last stage of the phased removal of the one-for-two transitional measure)

31 March -Next key date in NZ ETS Regulations

30 April - Final day for applying for provisional and final industrial allocations

31 May -  Final day for non-forestry surrenders covering calendar 2018

About the NZ ETS

To find out about the aim of the NZ ETS and how it works see About the NZ ETS

If you would like to learn more about why market information is important and how it relates to the NZ ETS, see this report

For how the NZ ETS fits within the wider climate change work programme see The transition to a low-emissions and climate-resilient Aotearoa New Zealand.

Providing feedback on the new market information portal for the NZ ETS

We are keen to hear your feedback on this portal as part of our efforts to improve the provision of market information. Please note that we may add more information to this portal over time.