New Zealand Law Society - Emissions trading reform bill introduced

Emissions trading reform bill introduced

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The Climate Change Response (Emissions Trading Reform) Amendment Bill was introduced on 24 October 2019. The bill was introduced by the Minister for Climate Change, James Shaw.

The bill amends the Climate Change Response Act 2002 (CCR Act) to improve certainty for businesses, make the New Zealand Emissions Trading Scheme more accessible, and improve its administration.

Part 1 of the bill amends the CCR Act.

Part 2 makes consequential amendments to other Acts and regulations.

The CCR Act now includes the text of the Paris Agreement and is updated to refer to it where appropriate (new Schedule 2A and clause 14 of new Schedule 1AA).

The regulations now prescribe an overall limit on the total of the New Zealand units available by auction the New Zealand units available by other means, and the approved overseas units available (new sections 30GA to 30GC and 30IA and clauses 4 and 15 of new Schedule 1AA and repeal of sections 178A and 178B).

New sections 30L to 30V introduce an infringement offence regime. Offences specified in regulations as being infringement offences fall within this regime. Offenders are liable to infringement fees of no more than $2,000 for a body corporate or $1,000 for any other person.

The phase-out rate for industrial allocations is increased to 0.02 from 2031 until 2040 and to 0.03 from 2040 onwards (amendments to sections 81 and 83 and new sections 84A to 84D).

New section 89A requires the EPA to publish information each year on the emissions or removals by participants who submit emissions returns.

Three new categories of land are now eligible to be used for offsetting pre-1990 forest land – they are land that has been forest land for less than 2 years and land that was established as offsetting forest land or carbon equivalent forest swap land but was excess to requirements (amendments to sections 179A and 186A to 186J and new clauses 10 to 12 of new Schedule 1AA).

Permanent forestry is established as a new activity for which a person may be a participant in respect of post-1989 forest land (new sections 186K and 194EA to 194EL and clause 13 of new Schedule 1AA).

The bill introduces a large package of operational and technical forestry changes, which will reduce operational complexity and encourage the establishment of new forests, particularly by small forest owners and farm foresters. They include measures to simplify rules and improve access for forest owners, including Māori landowners, measures to improve compliance rates, and other minor and technical changes.

The bill gives effect to decisions to price agricultural livestock emissions at farm level, and fertiliser emissions at processor level, from 2025.


Subpart 1 of Part 1 and subpart 1 of Part 2 come into force on the day after the Royal assent.

Subpart 2 of Part 1 and subpart 2 of Part 2 come into force on 30 November 2020.

Subpart 3 of Part 1 comes into force on 31 December 2020.

Subpart 3 of Part 2 comes into force on 1 January 2021.

Subpart 4 of Part 2 comes into force on 1 January 2022.

Subpart 4 of Part 1 comes into force on a single date set by Order in Council; or otherwise, on 1 January 2023.