Development of Industrial Allocation Regulations under the New Zealand Emissions Trading Scheme
This consultation document outlines the Government’s intended approach to the allocation of emissions units for emissions-intensive trade-exposed firms under the New Zealand Emissions Trading Scheme (NZ ETS).
Submissions closed 12 February 2010 on the Government’s proposed approach to industrial allocation (Climate change website). A report on the submissions is now available.
Foreword
Industrial allocation is one of the most challenging aspects of the design and development of an emissions trading scheme. There are large sums at stake, the future of some of New Zealand’s most important industries is affected, and there are a range of potentially complex engineering and financial concepts involved.
The recent amendments to the Climate Change Response Act 2002 provide an allocation regime that better protects New Zealand’s emissions-intensive trade-exposed industries and better aligns with the approach to allocation taken by our key trading partners. The amendments to the New Zealand Emissions Trading Scheme (NZ ETS) provide New Zealand industry with greater certainty over the detail of the approach to allocation and who the likely recipients will be. The challenge now is to implement the provisions of the Act in a timely and efficient way. This document outlines how this will be achieved.
The transition phase of the NZ ETS provides an opportunity to establish a system of allocation in an environment where the price of emissions is low. I intend to adopt a pragmatic approach by taking advantage of the substantial technical work undertaken here and abroad. The review of allocation scheduled for 2011 and future reviews provide opportunities to refine the allocation regime over time.
This consultation document provides a number of opportunities for input into the process of making allocation. I invite industry to contribute to an efficient allocation process and look forward to receiving constructive feedback on the issues consulted on in this document.
[Signed by]
Hon Dr Nick Smith
Minister for Climate Changes Issues
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