Tuesday, 20 August 2024 14:55

Govt updates ETS scheme settings

Written by  Staff Reporters
Climate Change Minister Simon Watts. Climate Change Minister Simon Watts.

Climate Change Minister Simon Watts says updates to the New Zealand Emission Trading Scheme have been made to ensure New Zealand has a more credible market.

“Since coming into Government, we have been clear we want a credible ETS-led approach to reduce emissions, and we were willing to make tough decisions to achieve this,” Watts says.

“To ensure the market operates as intended, we need settings to align with New Zealand’s climate targets and give participants confidence that their investments to reduce emissions will be rewarded,” he adds.

“The feedback we received is consistent with our decisions, and we have made the necessary changes that extends further than the advice we received from the Climate Change Commission.”

Watts says the Government will retain the current auction floor price, the containment reserve price, and current reserve volumes of New Zealand units in the Emissions Trading Scheme.

“These settings are doing their job and should be left alone,” he says.

The Government will also reduce the number of units available between 2025 and 2029, from 45 million to 21 million.

“As it stands, there is an oversupply of units held by participants which has contributed to a depreciated price of carbon,” Watts says. “This has led, in part, to the failure of recent auctions to clear, and poses a risk to achieving our climate targets and emissions budgets.”

He says that reducing the number of units will likely see the carbon price rise.

“We need the carbon price to encourage businesses and individuals to reduce their emissions to meet our climate targets.”

“We are mindful of the impact potential price rises will have on everyday New Zealanders, however, our modelling suggests the impact will be minimal,” Watts concludes.

Changes to unit numbers will take effect from the first auction of 2025.

More like this

Dark ages

OPINION: Before we all let The Green Party have at it with their 'bold' emissions reduction plan, the Hound thought it wise to run the numbers through the old Casio.

Featured

Editorial: Goodbye 2024

OPINION: In two weeks we'll bid farewell to 2024. Dubbed by some as the toughest season in a generation, many farmers would be happy to put the year behind them.

Securing the elusive India FTA

New Zealand's support for India during its current global security crisis could be key to securing a free trade agreement with the nation, according to the head of one of the country's largest independent accounting firms.

Biosecurity NZ ready for a busy summer

Biosecurity New Zealand says that more officers, detector dogs, and airport hosts, accompanied by an enhanced public awareness campaign, will bolster New Zealand’s biosecurity protections this summer.

Alliance Group re-set delivering results

Alliance Group has turned a corner on a challenging two years following a comprehensive re-set over the past 18 months and is forecasting a return to profitability, farmer-shareholders were told at the company’s annual meeting in Gore today.

National

Drought looms

Farmers on the east coast of the North Island are facing a quandary as hot, dry weather and dropping soil…

Tributes for leader

Tributes have flowed in from around the country for mid-Canterbury farming leader Chris Allen who died in a tragic accident…

Dairy, hort lead bounce back

The latest Ministry for Primary Industries report on the state of the primary sector shows that things are starting to…

Machinery & Products

More front hoppers

German seeding specialists Horsch have announced a new 1600- litre double-tank option that will join its current Partner FT single…

Origin Ag clocks up 20 years

With roots dating back to 2004, Origin Ag was formed as a co-operative business model that removed the traditional distributor,…

Teat spray price drop

FIL, the animal health and dairy hygiene subsidiary of GEA Farm Technologies, is dropping the price for its chlorhexidine teat…

» Latest Print Issues Online

The Hound

Dark ages

OPINION: Before we all let The Green Party have at it with their 'bold' emissions reduction plan, the Hound thought…

Rhymes with?

OPINION: The Feds' latest banking survey shows that bankers are even less popular with farmers than they used to be,…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter