NZ ETS changes recommended to stay on trackFriday 14 Apr 2023
Minister of Climate Change James Shaw has today released the Commission’s second annual advice on NZ ETS unit limits and price control settings, covering the period 2024 - 2028. Getting the NZ ETS settings right is a technical process, but it is critical to achieving Aotearoa New Zealand’s climate goals. This advice will not impact ETS settings before 1 January 2026. If current settings for reserve prices are triggered, settings for 2024 and 2025 may be changed. "This year’s advice reflects new data and updates to our approach. Our advice has been informed by new information from the market that emerged after the Government’s decisions on the NZ ETS in 2022," Dr Carr says. "If the Government chooses to accept the Commission’s recommendations for NZ ETS settings, then it will enable the ETS to do the job it was set up to do. It will also bring the ETS settings back into step with Aotearoa New Zealand’s emissions budgets and targets." "If the Government declines the recommendations, then it will need a much stronger policy approach to achieve emissions budgets than the one outlined in the emissions reduction plan." Compared to current settings, the Commission recommends: • Reducing the limit on the number of units available for auction • Raising the trigger prices for the cost containment reserve and auction reserve price • Changing to a two-tier cost containment reserve. More >> In a related article, New Zealand’s Finance Minister Grant Robertson has sought advice on the functioning Emissions Trading Scheme after the price of a unit under the scheme continued to plummet. It has now fallen about $30 in just three months. After spending a year trading above $70 and reaching as high as $88.50 on the secondary market, ETS units, called NZUs - the equivalent of emitting one tonne of carbon - are now trading at around $55 on the secondary market, although units traded as low as $48 on one secondary market on Monday. More >> Source: Climate Change Commission, NZ Herald | ||
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