Our role in the NZ ETS

Our independent advice supports the effectiveness of the NZ ETS in helping Aotearoa transition to a low emissions economy. 

We want to make the New Zealand Emissions Trading Scheme (NZ ETS) as effective as possible to help Aotearoa transition to a low emissions economy. One way we aim to achieve this is by giving advice on NZ ETS unit limit and price control settings to the Government every year. 

Our role in the NZ ETS unit limit and price control settings 

The Minister for Climate Change is required to update unit limit and price control settings every year, to provide a five-year look ahead period.  This helps keep the NZ ETS aligned to emissions reduction targets and gives market participants information they need.   

Bar chart showing how annual updates are made to five year outlook for emission unit limits and price control settings
Annual updates to emission unit limits and price control settings
Credit: Ministry for the Environment

Acting as an independent advisor, we recommend NZ ETS unit limit and price control settings to the Government every year. This advice will aim to support the effectiveness of the NZ ETS in helping Aotearoa transition to a low emissions economy.   

Our first advice on this will be delivered to the Minister for Climate Change in mid-2022, following the release of the Government’s Emissions Reduction Plan and emissions budgets. It will be made public when it has been tabled in Parliament by the Minister and we will publish it on our website at that point. 

How you can be involved 

As part of developing this advice, we are gathering information from stakeholders to develop an understanding of how the emissions market is operating. We also want to speak with people to ensure they understand what we are doing and why.   

We’ll be looking to engage over February to April 2022, before we deliver our advice in the middle of the year.  

If you would be interested in talking with us about the NZ ETS, please feel free to get in touch with us via email at hello@climatecommission.govt.nz. 

What happens once our advice is delivered  

After we have delivered our advice, the Ministry for the Environment (MfE) – the lead policy agency for the NZ ETS – will run a formal consultation on the proposed settings.  

The Government will then decide on updates to the NZ ETS unit limit and price control settings. If the Government adopts limits and price control settings that differ from our recommendations, it must publicly explain why.  

We will continue to recommend NZ ETS unit limits and price control settings to the Government every year.