Emissions Trading Reform Bill passed

Friday 26 Jun 2020

On Monday 22 June the Emissions Trading Reform Bill received Royal Assent. This means it will become law, and the Climate Change Response Act will be updated to reflect the new provisions as they come into effect. You can access the revised legislation on the New Zealand Legislation website.

For forestry, most of the new provisions will come into effect (start) on 1 January 2021 or 1 January 2023. However, some technical provisions will start the day after Royal Assent (23 June 2020). The most significant changes taking effect immediately include:

Extended deadlines for unit surrenders for post-1989 forestry emissions – the unit surrender deadlines have changed from 20 days after the return is submitted to 60 days after the EPA issues the notice to the participant.

Changes to the notification requirements of interested parties when adding or removing land from the ETS – participants are now responsible for notifying interested parties if post-1989 forest land is added or removed from the ETS. This will need to be done as soon as practicable after the EPA notice is received.

You can find more information about these changes in the Operational Improvements section on the MPI website.

Get in touch if you have any questions about the upcoming changes to forestry in the Climate Change Response Act by email etsforestrychanges@mpi.govt.nz.

Changes to the Fixed Price Option

There are also changes to the Fixed Price Option (FPO) which may be of interest to forestry participants:

• The FPO has changed from $25 to $35 for emissions from the start of 2020.

• For emissions which occurred up to 31 December 2019, participants will continue to have access to the FPO at $25 for those emissions.

• Post-1989 forestry participants who submit a net emissions return which covers multiple years will have access to the FPO on a pro-rata basis for the number of years in the emissions return. For example, if a voluntary emissions return (under section 189(3)) is submitted in 2021, and is the first VER for the CAA since 2018, up to two thirds of the surrender obligation can be met at $25 (2018 and 2019) and up to one third at $35 (2020).

You can find more information about the Fixed Price Option changes on the MfE website.

Source: MPI, Sustainable Forestry Bulletin

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