Government amends Climate Change Response Act 2002 to change forestry surrender obligationsPrimary Industries Climate Change Issues
The Government welcomes the passage of legislation amending the Climate Change Response Act 2002 so that only New Zealand Units (NZUs) can be surrendered by participants when deregistering post-1989 forest land from the Emissions Trading Scheme (ETS).
The amended act will remove the opportunity to arbitrage NZUs by registering and deregistering the same piece of post-1989 forest land from the ETS multiple times.
“We have acted to remove an unintended consequence from the operation of the ETS that, if left unchecked, could create reputational and integrity risks to the ETS and fiscal costs to the Crown,” says Minister for Climate Change Issues Tim Groser.
“This change brings forestry broadly in-line with other sectors in the ETS, and will maintain the good reputation of the ETS, which plays an important role in New Zealand meeting its international climate change obligations,” says Mr Groser.
Associate Minister for Primary Industries Jo Goodhew reassured foresters: “Post-1989 foresters can still use Kyoto units for liabilities incurred through deforestation or harvesting, and sell Kyoto units on either domestic or international markets. MPI will work closely with forestry participants to ensure they understand how the new rules will apply.”
The amended Act will come into force on 16 May 2014. The amendments will not affect deregistration applications received by the Ministry for Primary Industries on or before 15 May 2014.