MINISTRY FOR THE ENVIRONMENT: The Government has made decisions to improve the New Zealand Emissions Trading Scheme (NZ ETS)

Together the decisions will result in a single bill amending the Climate Change Response Act 2002 (CCRA).  Further decisions are expected during 2019 on industrial allocation.

The two tranches of decisions are to:

  • align the CCRA with the Paris Agreement and any new emissions reductions targets

  • enable a cap to be placed on emissions covered by the NZ ETS

  • improve the administration and operation of the NZ ETS

  • improve rates of compliance within the NZ ETS

  • make the scheme more transparent to participants and the public

  • prepare for robust and transparent NZ ETS auctions

  • transition from the fixed price option to the cost containment reserve

  • enable a potential price floor in future

  • establish a separate market governance work programme.

In addition, the Government is considering its response to recommendations delivered to it last month by the Interim Climate Change Committee on how surrender obligations could best be arranged if agricultural methane and nitrous oxide emissions enter into the New Zealand Emissions Trading Scheme.

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