The government of New Zealand has opened a consultation on reforms aimed at improving the existing New Zealand Emissions Trading Scheme (NZ ETS).
New Zealand aims at reducing its greenhouse gas (GHG) emissions by 30% below 2005 levels by 2030, by using a carbon budget approach of 601 MtCO2eq over the 2021-2030 period. However, forecast net emissions are expected to remain higer at 703 MtCO2eq, requiring an additional 102 Mt CO2eq reduction to meet the target.
According to the government's plans, the provisional emissions budget would be superseded and replaced with a 354 MtCO2eq budget for 2021-2025. A cap on emissions covered by the ETS would be introduced and reduced over time. The government also plans to introduce a NZU (New Zealand Units) price floor of NZD 20 per NZU for 2020-2025 that will work by placing a reserve price below which NZUs will not be sold at auction; this would replace the current price ceiling mechanism ("fixed price option").
In November 2019, the Parliament adopted a law aiming to cut CO2 emissions to net zero by 2050 and making the new 2050 GHG reduction target legally binding. The law includes agricultural emissions, with methane emissions from animals having to be cut by 10% by 2030 and by up to 47% by 2050.
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