Dates of commencement for Emissions Trading Scheme participant obligations
Participants within different sectors enter the Emissions Trading Scheme (ETS) at different times.
This bulletin explains the dates and the relevant provisions relating to participant obligations in the Climate Change (Emissions Trading and Renewable Preference) Bill, as reported back to Parliament by the Finance and Expenditure Committee.
The Bill amends the Climate Change Response Act 2002 (CCRA) to provide for implementation of a New Zealand greenhouse gas emissions trading scheme.
Provisions relating to participant obligations
The Bill inserts Schedules 3 and 4 into the CCRA. These schedules contain the “activities” that lead to participant obligations.
Schedule 3 ‘Activities with respect to which persons must be participants’ sets out the activities within the different sectors that are captured by the ETS. Anyone carrying out a listed activity must register as an ETS participant.
Schedule 4 ‘Activities with respect to which persons may be participants’ sets out the range of activities where people can choose to “opt-in” to become ETS participants.
Clause 4 of the Bill inserts new section 2A, which specifies when the parts or subparts of the schedules apply. Participants carrying out the activities must (or may) register as participants from the date the part or subpart of the schedule containing the activity applies. Transitional provisions in sections 178A to 178D qualify how the ETS applies in voluntary and mandatory reporting years.
Dates of sectoral entry
The table overleaf shows when participant obligations for each sector commence, including new dates for voluntary and mandatory reporting. Unit obligations for the liquid fossil fuels (transport) sector now start on 1 January 2011 rather than 2009. Unit obligations for imported hydro fluorocarbons (HFCs) andimported per fluorocarbons (PFCs) synthetic gases start on 1 January 2013 rather than 2010. Alongside the dates for sector entry, the Bill introduces voluntary and mandatory reporting for liquid fossil fuels, industrial processes, agriculture, waste and other removal activities relating to HFCs and PFCs.
Voluntary reporting
Voluntary reporting gives participants the option of registering as participants in order to begin reporting their emissions and get used to reporting systems, such as preparing emissions returns. No penalties apply to voluntary reporting and participants do not have to surrender units.
Mandatory reporting
Mandatory reporting obligations start the year following voluntary reporting, and participants are then required to complete an emissions return for the activities carried out in that year. Participants do not have to surrender units but penalties and offences do apply for reporting failures as do other administrative provisions relating to emissions returns.
Opt-in provisions
Schedule 4 sets out the range of activities where persons may “opt-in” to become ETS participants. These apply to activities relating to post-1989 forest land; purchasers of obligation jet fuel (above 10 million litres/year); purchasers of coal (above 250,000 tonnes/year) or natural gas (above 2 petajoules/ year); farmers (farming above a prescribed level, if the point of obligation is at the processor level); and people undertaking non-forestry removal activities.
The range of non-forestry removal activities provided for in Part 2 of Schedule 4 includes embedded products; exporting HFCs or PFCs; destroying HFCs or PFCs. A removal activity for capturing and storing carbon dioxide (CCS) can also be brought into force on a date determined by Order in Council.
NZ ETS participant obligations: dates of commencement and relevant compliance periods
View the dates of commencement and relevant compliance periods (large table).
