Some participants are required to acquire and surrender New Zealand Units to meet their ETS obligations. Find out what you need to do.
The New Zealand Emissions Trading Scheme (ETS) is based around a trade in units that represent a tonne of carbon dioxide equivalent. Emitting firms have to surrender these to the Government annually, while those who remove rather than emit greenhouse gases (e.g. those who plant and grow forests) can receive units.
The Ministry for Primary Industries (MPI) manages the forestry sector’s emissions operations and provides information on surrendering units on their website.
Non-forestry participants who are required to surrender emission units under the ETS have until the 31 May each year to surrender units in respect of the emissions they have reported for the previous year.
Phase out of the '1 for 2' surrender obligation
Prior to 2017, non-forestry participants had to surrender one eligible unit for every two tonnes of emissions they reported in their annual emissions return, effectively a 50% surrender obligation.
This ‘1 for 2’ surrender obligation is being phased out, as required by the Climate Change Response (Removal of Transitional Measure) Amendment Act 2016. This will happen in three equal steps for the reporting periods as follows:
- 2017 - 1 unit for each 1.5 whole tonnes of emissions
- 2018 - 1 unit for each 1.2 whole tonnes of emissions
- 2019 - 1 unit for each 1 whole tonne of emissions
Along the same lines, recipients of ‘Other Removal Activities’ entitlements will receive a phased increase to their entitlement.
This change does not affect the agriculture participants, as they are not currently required to surrender any units to account for their emissions.
For more information, see the factsheet published by the Ministry for the Environment.
The unit of trade for the emissions trading scheme is the New Zealand Unit (NZU), which is the unit created and distributed by the Government. One NZU is equivalent to one tonne of carbon dioxide equivalent emissions. All first commitment period Kyoto Protocol units, with the exception of New Zealand-originated Assigned Amount Units (NZ-AAUs), were restricted from surrender after 31 May 2015.
If you need to buy units to comply with your obligations, you can buy them directly from other scheme participants who may have a surplus, or through a carbon market broker. The cost of purchasing units in this way to account for emissions will fluctuate depending on the market value of the NZU.
A participant may also satisfy their obligation to surrender units by paying a fixed price of $25 for each unit that the participant is liable to surrender into a Crown bank account. The EPA will advise participants of the Crown bank account details on receipt of an emissions return. Following the submission of an emissions return, payments must be made as cleared funds by 31 May into the designated Crown bank account by cheque, direct credit or online banking.
To see definitions of each unit type, see the information in our Terms used in the ETS page.
How to surrender units
Whether you opt for the fixed-price option, or you decide to purchase units on the open market, your actual surrender will be made through the New Zealand Emissions Trading Register (the Register). The Register allows Account Holders to hold and transfer units within the Register. Transfers are undertaken by an Account Operator who has been authorised by the Account Holder to operate the account on their behalf.
To complete a surrender, the Account Operator should log in and navigate to the account they wish to make a surrender from. They will then prepare a transaction with type "Surrender" or "Fixed-price Surrender" as appropriate.
Where two step verification is enabled for the account, the Account Operator (Preparer) should complete these initial steps, and the Account Operator (Approver) will then authorise the completion of the surrender.