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About the ETS

​The New Zealand Emissions Trading Scheme

The New Zealand Government has made a long-term commitment to reduce our greenhouse gas emissions. 

The primary method for doing this is the New Zealand Emissions Trading Scheme (ETS). The scheme was created through the Climate Change Response Act, which was passed in 2002 in recognition of New Zealand's obligations under the Kyoto Protocol.

'Emissions trading' is a market-based approach for reducing emissions of greenhouse gases. The ETS puts a price on emissions, by charging certain sectors of the economy for the greenhouse gases they emit.  These sectors are required to acquire and surrender New Zealand Units (NZUs) or other eligible emission units to account for their direct greenhouse gas emissions or the emissions associated with their products.

Emission units, sometimes called 'carbon credits', are traded between participants in the scheme. An emission unit can either represent one metric tonne of carbon dioxide, or the equivalent of any other greenhouse gas.  The primary unit of trade is the NZU. NZUs are created by the New Zealand Government and allocated to organisations and individuals participating in the Scheme.

The Environmental Protection Authority (EPA) manages the administration of the Scheme. We ensure compliance with the Scheme and provide reports and market information. We also operate the New Zealand Emission Unit Register, where transactions take place. For a detailed explanation of the EPA's role in the ETS, please see the Who Does What page.

Courtesy of the Ministry for the Environment

Key dates in the ETS

If you have a current Unique Emissions Factor (UEF) then you will need to complete a Maintain UEF Workflow in the NZETR​ by 31 January. Any applications for new UEFs will need to be completed by then as well.

Emissions reporting for the previous calendar year will open on 1 January each year, and all participants will need to submit an emissions return by 31 March. After completing your emissions return, emission units must be surrendered by 31 May.

The new year will mean a new application period for Industrial Allocations of New Zealand Units (NZUs). You can submit an application via the NZETR at any time from 1 January, and it must be with us by 30 April.

Activities in the ETS

The Climate Change Response Act 2002 (the Act) specifies the activities that are included in the Scheme for each of the following industry sectors: forestry, liquid fossil fuels, stationary energy, industrial processes, synthetic greenhouse gases, agriculture and waste​. People carrying out the specified activities are required to participate in the Scheme.

The Act also specifies activities that are optional under the Scheme. People carrying out these activities can choose to participate or not.

People and organisations who participate in the scheme directly do so in different ways:

  • Those that emit greenhouse gases into the atmosphere have to surrender NZUs or other eligible emission units to the Government. 

  • Those that remove greenhouse gases from the atmosphere, or from New Zealand, may earn NZUs from the Government (for example, owners of forests that absorb greenhouse gases, or a business that exports products containing hydrofluorocarbons). 

Other people may also hold and trade emission units. These people are sometimes referred to as 'secondary market traders'. 

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