How are importers of synthetic greenhouse gases affected by the NZ ETS?
Since 2013, importers and users of Synthetic Greenhouse Gases (SGGs) have had an obligation to report their activities and surrender New Zealand Units (NZUs) or equivalent emission units under the New Zealand Emissions Trading Scheme (ETS).
The categories of SGG included in the NZ ETS are:
- hydrofluorocarbons (HFCs) - used in the refrigeration and air-conditioning, aerosol, fire protection and foam-blowing industries.
- perfluorocarbons (PFCs) - used in refrigeration and air conditioning.
- sulphur hexafluoride (SF6) - used in gas-insulated switchgear and circuit breaker equipment and in scientific applications.
Each gas has a Global Warming Potential (GWP) value which is set by how badly it affects the atmosphere when released.
Affected participants are Importers of bulk HFC and PFC; Importers of goods and motor vehicles containing HFC and PFC; Users of SF6 in operating electrical equipment who are above a prescribed threshold; and Manufacturers of HFC and PFC within New Zealand.
Exporters of HFC and PFC are eligible to receive NZUs in respect of SGGs that they export, provided they meet prescribed eligibility criteria.
It is an offence for users of SGGs to knowingly release them into the atmosphere without reason. More information about knowing release.
SGG participants are required to record information about gas imported, manufactured or used during each year and submit this as part of their annual emissions return. This figure is then multiplied by the GWP value of the specific substance imported, manufactured or used to give a total emissions figure.
Work out your obligation for importing HFC and PFC using this calculator.
Once an emissions return has been completed, a SGG participant will be required to surrender emissions units corresponding to the amount of emissions reported to the NZ ETS.
Importers of HFC and PFC in goods and motor vehicles do not report in this way. More information about how importers of HFC and PFC in goods and motor vehicles are affected by the ETS.
The Minister has the ability under the Climate Change Response Act 2002 to recommend exemptions where the environmental integrity of the scheme is not materially undermined and where the costs of such exemptions do not outweigh the benefits. Exemptions and thresholds are in place for other NZ ETS sectors through the Climate Change (General Exemptions) Order 2009.
Exemptions for certain SGG activities within that Order include:
importing SGG contained in goods that are for personal and non-business use
importing SGG contained in the refrigeration or air conditioning systems of containers, ships or aircraft that are passing through New Zealand (and various other criteria).
These exemptions are mirrored in the eligibility criteria for NZUs when SGG are being exported. There is one additional constraint: the export of SF6 is only eligible for NZUs if the gas exported was imported after 1 January 2013.
Importers of SGG and users of SGG do not receive an allocation of NZUs because they are able to pass the costs of their NZ ETS obligations on to their customers.
However, those who re-export or destroy SGGs are eligible to receive NZUs. This isn't considered part of the NZ ETS allocation process but is classed as a removal activity.
For more information about allocations for exporting or destroying SGGs, please see the Removal Activities page.
For more information about Synthetic Greenhouse Gases in the ETS, or if you have a question about anything on this page, please contact us.