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Annex: Activity and Mandatory Participant Table

The NZ ETS legislation will specify a list of activities that give rise to emissions. Any firm or other entity that carries out one of the specified activities will have the obligation to monitor and report its emissions, using the methods outlined here, and to surrender to the Crown one emission unit (NZU or eligible Kyoto unit) for each metric tonne of emissions at the end of each annual compliance period.

The Activity and Mandatory Participant Table provides a preliminary list of the activities that are expected to be included in legislation, with details indicating how emissions are to be estimated for each activity.

The table is constructed as follows (by column):

  • Sector: specifies the broad sectors that will potentially be entering the ETS at different times.

  • Activity: defines an activity that will give rise to an obligation to surrender emission units.

  • Emission source: within each activity there may be a number of actions (eg, use or production of a particular fuel, operation of a particular process) that give rise to emissions. These will not be detailed in legislation, because they may be subject to change over time as the details of technologies and products change, but they will be covered by regulation. Emission sinks are measures of carbon sequestered in outputs (eg, trees) and to be subtracted from the total emissions associated with an activity.

  • Emission source or sink unit: units for the emission source (eg, terajoules (TJ) of a particular fuel or tonnes for a particular material flow).

  • Gas: notes which of the greenhouse gases, as listed in Annex A of the Kyoto Protocol, is/are affected by a particular emission source.

  • Emission factor: each emission source is multiplied by an emission factor to determine the corresponding tonnes of greenhouse gases per year emitted.

  • Global warming potential (GWP): the conversion factor used to convert tonnes of any non-CO2 greenhouse gas to tonnes of CO2-equivalent.

  • Participant-specific emission factor: it is expected that some emission sources will have standard emission factors, while in other cases participant-specific emission factors will be appropriate and may be re-determined on a regular basis. Further elaboration will be required regarding which emission sources and procedures will apply in the event that participants are able to use participant-specific emissions factors.

  • Mandatory participant: preliminary identification of the entities that are expected to undertake these activities and have the consequent obligations.

  • Expected number of participants: indicates how many entities are currently known to be carrying out relevant activities in New Zealand.

  • Exemption if relevant: notes where exports of carbon-containing material, or other sources to be excluded or netted out, are relevant.

  • Comment: provides notes on some issues relating to measurement and reporting.

Indicative detailed activity and mandatory participant table
New Zealand Emissions Trading Scheme

* Participants are permitted to get an emission factor that is specific to their operation. Procedures to enable such emission factors will be specified in legislation/regulation and will require approval by the administering agency.

Notes:

All emission factors are indicative only and will be finalised after technical review and discussions with relevant stakeholders.

The terms ‘sale’, ‘expense’, ‘purchased’ etc will need to be defined in legislation.