How is horticulture affected by the ETS?
Growers in the horticulture sector do not have an obligation to report their emissions or surrender New Zealand Units (NZUs) under the New Zealand Emissions Trading Scheme (NZ ETS).
Some New Zealand based growers are eligible to apply for an Industrial Allocation of NZUs, based on the type of crop they produce. Eligible activities in this sector are:
- production of fresh tomatoes
- production of fresh cucumbers
- production of fresh capsicums
- production of cut roses
Applications for an Industrial Allocation of NZUs must be received by 30 April of each year.
Growers of the products listed above are eligible for an Industrial Allocation of NZUs because they are considered to be "Emissions Intensive and Trade Exposed."
This means that, because of the ETS, these growers face an increase in the cost of powering (i.e. heating) their greenhouses, but due to international competition, they are not able to pass these increased costs on to their customers. The government has attempted to mitigate this cost by providing an allocation of NZUs, which a grower can then sell or utilise to pay for energy costs (for example, with a coal provider).
Industrial Allocations are calculated using production data, as opposed to a grower's actual power costs, because this incentivises growers to reduce emissions by switching to sustainable or renewable power sources which do not have an ETS cost, as they will continue to receive a financial benefit through their allocation.
Applications for Industrial Allocations are made via the New Zealand Emissions Trading Register (NZETR). See the Industrial Allocations page for more information about allocations and details on how to apply.