Kyoto Units from the first commitment period
Find out more about the True-up process and eligible units in the ETS after the first commitment period.
The first commitment period (CP1) of the Kyoto Protocol under the United Nations Framework Convention on Climate Change (UNFCCC) ran from 1 January 2008 to 31 December 2012. New Zealand retired enough Kyoto Protocol emission units to meet emissions obligations incurred during that period. This was known as the True-up and was the formal international process to close off CP1. The Crown met these obligations during a 100-day trading period that ran from 10 August to 18 November (midnight UTC) 2015.
Kyoto Protocol units (CERs, RMUs, ERUs and AAUs) from the first commitment period have not been able to be traded internationally since 18 November 2015. New Zealand will be required to cancel these units at some stage once it has completed all of its obligations from the first commitment period. This process is called mandatory cancellation and the timing for when it will occur has not yet been set.
Since 31 May 2015, internationally originated Kyoto Protocol units from the first commitment period have been ineligible for New Zealand Emissions Trading Scheme (ETS) compliance as per the Government’s decision in 2013. The exception is NZ AAUs. In 2013, the Government decided that holders of NZ AAUs could continue to use these units to meet compliance obligations beyond 31 May 2015.
Since 18 November 2015, you can still hold and trade Kyoto Protocol units from the first commitment period domestically, but you cannot export these units from New Zealand or import units from another country’s registry.
All Kyoto Protocol units from the first commitment period remaining in holding accounts will be mandatorily cancelled. The timing for cancellation has not been set.
All Kyoto Protocol units from the first commitment period are able to be voluntarily cancelled until near the time of mandatory cancellation.
Replacement of NZ AAUs
The Government will ensure holders of NZ AAUs retain access to valid units after New Zealand has met its obligations from CP1. Holders of NZ AAUs will still have units that can be traded domestically, voluntarily cancelled and surrendered to meet NZ ETS obligations. New Zealand will be required to cancel NZ AAUs at some stage. At this time all privately held first commitment period Kyoto emission units will be cancelled.
When cancellation is required, NZ AAU holders will receive replacement NZUs at a rate of one NZU for every one NZ AAU after the NZ AAUs have been cancelled.