Liquid fossil fuels

Information for owners, importers and large purchasers of liquid fossil fuels such as petrol, jet fuel and fuel oils.

Since 2010, liquid fossil fuel suppliers have had an obligation to report their activities and surrender New Zealand Units (NZUs) or equivalent overseas emission units under the New Zealand Emissions Trading Scheme (ETS).

Fuels covered under this category are:

  • petrol
  • diesel
  • aviation gasoline
  • jet kerosene
  • light fuel oil
  • heavy fuel oil

Emissions from fuel used for international aviation and marine transport are exempt, consistent with the Kyoto Protocol.

Like many other parts of the Scheme, the ETS obligation for liquid fossil fuels applies as far up the supply chain as possible; at the point that a fuel supplier takes fuel from the refinery or imports it. Private citizens, such as motorists, are not directly involved.

The only exception to this, is an option for large purchasers of liquid fossil fuels to participate voluntarily or "opt-in" to the ETS. More information about opt-in participants of this type can be found in the Climate Change (Liquid Fossil Fuels) Regulations 2008​.

​​​Obligations Plus

Liquid fossil fuel participants are required to record information about fuel imported or removed for home consumption during each year using methods in the Climate Change (Liquid Fossil Fuels) Regulations 2008​.

The Regulations provide emissions factors for each type of liquid fossil fuel, and set out how a participant must use this information to calculate their emissions for their annual emissions return.

Once an emissions return has been completed, a liquid fossil fuel participant will be required to surrender emissions units corresponding to the amount of emissions reported to the Emissions Trading Scheme.

The Ministry for the Environment have prepared a guide outlining the administrative and reporting requirements for people who carry out liquid fossil fuel activities, which you might find helpful to read.

Reporting guidance - Ministry for the Environment website

Find out how to submit an annual emissions return - Emissions reporting

Allocations Plus

Suppliers of liquid fossil fuels do not receive an allocation of NZUs because they are not trade exposed and are able to pass the costs of their ETS obligations on to their customers.

Coastal shipping and fishing industries Plus

In general, the coastal shipping and fishing industries are not directly participating in the ETS. However, these industries face increased costs associated with the ETS.

In the coastal shipping industry, international carriers also carry domestic cargo, but because the majority of their fuel is used for international travel the fuel they buy in New Zealand (and most likely elsewhere) does not include ETS costs.

In the fishing industry, all fuel sold to fishing vessels in New Zealand, irrespective of where they go fishing, includes the increased costs of the ETS. However, some vessels may fish in the New Zealand Exclusive Economic Zone using fuel that is purchased outside New Zealand and these fuels do not include any ETS costs.

Transport and travel Plus
Greenhouse gas-producing activities from transport

Most forms of travel are fuelled by liquid fossil fuels, such as petrol and diesel, which result in emissions of greenhouse gases into the atmosphere. The ETS covers liquid fossil fuels used in New Zealand. It covers petrol, diesel, aviation gasoline, jet kerosene, light fuel oil and heavy fuel oil. Emissions from fuel used for international aviation and marine transport are excluded from the scheme, consistent with our international obligations under the UNFCCC and the Kyoto Protocol.

The scheme applies to liquid fossil fuels as far up the supply chain as practically possible. In practice this means that the obligations are applied when refined oil products leave the refinery or are imported.

International travel

Emissions from fuel used for international aviation and most marine transport are excluded from the scheme, consistent with our international obligations. However, some large domestic users of jet fuel have decided to voluntarily enter the ETS.

International transport operators

Emissions from fuel used by international aviation and marine transport are excluded from the scheme. This is consistent with our international obligations.

Domestic airlines

The ETS applies to all domestic airlines, both New Zealand-based and international. All fuel used for domestic flights is covered by the ETS, regardless of which airline buys the fuel.

Monitoring and calculating emissions Plus

Participants in the liquid fossil fuels sector are required to monitor fuel flows, keep relevant documentation and calculate emissions according to the Climate Change (Liquid Fossil Fuel) Regulations 2008. Obligation fuels are listed in the regulations. They include petrol, diesel, aviation gasoline, jet kerosene, light fuel oil, heavy fuel oil and any other liquid fuel that is combusted when used. Some specific products are explicitly excluded to avoid any confusion: lubricating oil, solvents, chemicals and lighting kerosene.

All fuel monitored should exclude biofuels. The regulations provide emissions factors for each obligation fuel that must be used to determine emissions.

Biofuels Plus

Biofuels used in the transport sector are not covered by the ETS.

Manufacturers of biofuels in New Zealand face the same ETS costs as any other business. They are most likely not participants in the scheme, but pay higher prices for sources of energy that result in emissions, such as coal or diesel used in a facility to make biofuels.