Units lacking environmental integrity to be banned

Climate Change Minister Tim Groser today announced that the Government is banning some international emissions units from New Zealand’s Emissions Trading Scheme (ETS) due to concerns over their environmental integrity.

“We are banning international units generated from industrial gas destruction projects and large hydropower projects that do not meet World Commission on Dams guidelines. This change is about ensuring the environmental integrity of the New Zealand Emissions Trading Scheme is maintained,” Mr Groser says.

“Australia and the European Union have already announced their intention to restrict these units from their emissions trading schemes. Banning these units now strengthens the integrity of the ETS and therefore our ability to advance discussions on linking with other major domestic emissions trading schemes.”

The ban of these units is not expected to significantly reduce the supply of units in the period up to 2015 and is therefore expected to have no impact on the carbon price.

Units already in the New Zealand Emissions Unit Register will be able to be used to meet surrender obligations. Emitters who have already committed to purchase these types of units in forward contracts will be able to use them for surrender obligations until June 2014, providing contracts were entered into prior to today.

“The Government is exploring regional and bilateral linkages amongst carbon markets for beyond 2015,” Mr Groser says.

A copy of Q&A’s about the ban of some international units for environmental integrity reasons can be found at:
http://www.climatechange.govt.nz/emissions-trading-scheme/building/regulatory-updates