Annual updates to synthetic greenhouse gas levy rates

This page has information on the 2016 update to the synthetic greenhouse gas levy rates for imported goods and vehicles.

About the updating of levy rates

Synthetic greenhouse gas (SGG) levy rates for imported goods and vehicles are updated each year. This is so they align with New Zealand Emissions Trading Scheme (NZ ETS) emission unit prices during the previous July to June financial year. 

The 2017 levy rates

The 2016 update sets the SGG levy rates for 2017.

The emission unit price has increased from $0.30 (applied to the 2016 levy year) to $9.85 for 2017. 

It uses a 0.67 scale factor because of the ‘two-for-three’ surrender rule. (The 2016 levy rates incorporated a 0.50 scale factor to reflect the ‘one-for-two’ surrender rule.) 

The updated levy is specified in the Climate Change (Synthetic Greenhouse Gas Levies) Amendment Regulations 2016 [New Zealand Legislation website].

Change from 2016 levels

The 2017 levy rates represent a large change from 2016 levels. 

This is because:

  • the emission unit price for the 2016 levy was based upon 2014/15 financial year unit prices which were low. 
  • the changed surrender rules also made a small contribution to the increased levy rates.

While the change of levy rate appears substantial it is important to note that:

  • on average NZ ETS and SGG Levy prices will align, however when unit prices change a lag effect applies. This lag effect is currently reducing the 2017 levy price (a $9.85 emission unit price) to well below current emission unit prices of around $18.00
  • the 2016 levy was based on an historically low emission unit price of $0.30 (the 2013 unit emission price was $8.22)
  • the levy rates are still a very small proportion of the goods’ or vehicles’ value.     

The Climate Change (Synthetic Greenhouse Gas Levies) Amendment Regulations 2016 regulations is one of a number of NZ ETS technical amendment regulations published in the New Zealand Gazette. Amendment regulations for the NZ ETS are generally completed before the end of September each year.