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Industrial Information Sought For New Zealand's ETS Allocations

by Mary Swire, Tax-News.com, Hong Kong

16 December 2009


The New Zealand government has released a consultation document as a first step in the process of allocating emission units to industry under the Emissions Trading Scheme (ETS).

"The most complex aspect of the ETS is allocations for trade-exposed industries that are emissions intensive. These are necessary to avoid the problem of exporting these industries and their emissions and jobs offshore,” the Minister for Climate Change Issues, Nick Smith, said.

"The law provides for allocations to industries at 60% for those on 800 tonnes per NZD1m (USD720,000) revenue and 90% for those on 1,600 tonnes per NZD1m revenue. This process is about identifying those firms and putting the systems in place to provide their allocation.”

"The consultation document lists industrial activities that might be eligible for an allocation. The government wants firms that conduct these activities to identify themselves. It also wants firms that perform other activities that may also be eligible to receive an allocation to come forward.”

One of the main features of New Zealand’s revised ETS includes a revised entry date of July 1, 2010 for the transport, energy and industrial sectors.

"New Zealand aligned its approach to industry allocations closely with that which was proposed under the Australian Carbon Pollution Reduction Scheme,” Smith added. Now, delays with that scheme mean New Zealand is going to need to advance work on allocations ahead of Australia.

"The government, through the Ministry for the Environment, will make its best endeavors to give certainty to eligible companies before July about how many emission units they'll receive,” he emphasized.

“Manufacturers and industrial companies should be thinking as soon as possible about compiling data that will be needed for eligibility decisions. Getting on with this work is important to ensuring a smooth introduction of New Zealand's ETS in the energy and industrial sectors on July 1, 2010."


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