How is the Industrial Processes sector affected by the ETS?
Certain businesses operating in the Industrial Processes sector have obligations to report their activities and surrender New Zealand Units (NZUs) under the New Zealand Emissions Trading Scheme (ETS). Some of these have had obligations since 2010, with others having obligations since 2013.
Obligations apply to businesses producing:
Obligations apply at the point that the metal, mineral and chemical transformations involved in these processes occur, as this is where gases are emitted.
Participants in the Industrial Processes sector are required to record information about the amount of relevant product produced in a calendar year and submit this as part of their emissions return. Each product has an emissions factor that estimates the emissions per tonne for that process. The gross tonnage of product is multiplied by correct emissions factor to give a total emissions figure.
For more information about emissions returns, see the Emissions Reporting page.
Once an emissions return has been completed, an Industrial Process participant will be required to surrender emissions units corresponding to the amount of emissions reported to the ETS.
Some emissions-intensive, trade-exposed businesses in the Industrial Processes sector are eligible to receive an allocation of NZUs. The purpose of this allocation is to help offset increased costs under the scheme for companies who are not able to pass the cost on to consumers. Increased costs may be due to a company's obligation to surrender NZUs and/or due to higher energy prices resulting from the ETS.
It is possible for some businesses to have an obligation to surrender NZUs and also receive an allocation.
Please see Industrial Allocations for more information about the Industrial Allocation process, what activities are eligible and how to apply.