Restrictions proposed on ETS unitsClimate Change Issues
Climate Change Minister Tim Groser today announced the Government’s intention to commence consultation on excluding specific types of international Kyoto units from the New Zealand Emissions Trading Scheme (ETS).
“The Government has considered whether Emission Reduction Units (ERUs) from HFC-23 and N2O destruction projects, and Certified Emission Reduction Units (CERs) and ERUs from large-scale hydroelectricity projects should be ineligible in the ETS. There are legitimate questions about these types of international units and the Government wants to maintain the integrity of the ETS,” Mr Groser says.
The proposal is that we exclude the use of these particular units either from 1 January 2013 or 1 June 2013. The European Union is proposing to ban these units from 2013 and Australia is also proposing a prohibition when their emission trading scheme comes into effect in 2015.
As with previous restrictions, units bought on forward contracts will be assessed individually and are likely to be exempt from the ban. This will ensure that New Zealand companies with legitimate investments are not disadvantaged by the ban.
“We will begin consultation on Monday 19 November and allow two weeks for stakeholders to have their say. We want to give scheme participants the opportunity to comment on the proposal but also want to give the market certainty as quickly as possible on the eligibility of these units,” Mr Groser says.