The New Zealand Emissions Trading Scheme
As part of its response to climate change, the New Zealand Government has legislated to establish an Emissions Trading Scheme (NZ ETS).
1 January, 2008
Liquid Fossil Fuels
1 July, 2010
Stationary Energy & Industrial
1 July, 2010
1 January, 2013
1 January, 2013
1 January, 2015
Mobil Oil New Zealand Limited is a mandatory participant under the Liquid Fossil Fuels sector of the NZ ETS, and from 1 July, 2010, is required to purchase emissions units in relation to the amount of greenhouse gas emissions that are estimated to result from the use of the transport fuels that it sells in New Zealand.
As a consequence, the cost of supplying petroleum fuels has increased from that date.
What legislation establishes the NZ ETS, and what does it do?
The Climate Change Response Act 2002, as amended by the Climate Change (Emissions Trading) Amendment Act 2008 and the Climate Change Response (Moderated Emissions Trading) Amendment Act 2009, establishes New Zealand's ETS, which obligates participants to monitor their greenhouse gas emissions (or the estimated embedded emissions associated with use of the fuel they sell), purchase emissions units, and surrender them to Government after year end. Further legislative changes embodied in the Climate Change Response (Emissions Trading and Other Matters) Amendment Act were passed by the Parliament in November 2012.
The Climate Change (Liquid Fossil Fuels) Regulations 2008 as amended in 2009, set out the liquid fossil fuels that are covered by the NZ ETS, and the methods for participants to monitor and calculate the emissions that result from the use of those fuels.
How does Mobil estimate the emissions embedded in the fuels it sells?
Mobil estimates the amount of embedded greenhouse gas emissions purchased by each customer using the default emissions factors set out in the Climate Change (Liquid Fossil Fuels) Regulations 2008 as amended by the Climate Change (Liquid Fossil Fuels) Amendment Regulations 2009. This calculation establishes Mobil's obligations under the NZ ETS.
How much does the NZ ETS impact the cost of fuel Mobil sells?
It is not possible to predict the amount of the impact that this additional cost will have on fuel prices, as it will be influenced by the market price for the emissions units Mobil purchases to satisfy its obligations, the direct impact that the NZ ETS has on Mobil's costs of doing business (such as trucking and electricity costs), as well as by the competitive local market.
A transitional phase of the NZ ETS exists until at least 2015 (at which time the next review of the ETS is scheduled):
What transport fuels are covered by the Liquid Fossil Fuels sector of the NZ ETS?
The NZ ETS covers liquid fossil fuels used in New Zealand, including petrol, diesel, aviation gasoline, jet kerosene, light fuel oil and heavy fuel oil. It also includes any other liquid fossil fuel that is directly combusted when used.
LPG is not included in the Liquid Fossil Fuels sector of the NZ ETS, but is included as a natural gas under the Stationary Energy and Industrial Processes sector of the scheme.
Exports, and fuel used for international aviation and marine (except for fishing) transport are exempt from the scheme.
Biofuels are also exempt. Where biofuels such as ethanol or biodiesel are blended with a liquid fossil fuel in a transport fuel, emissions costs only apply to the liquid fossil fuel component of the blend.
Lighting kerosene, solvents, chemicals and lubricants are explicitly excluded from the scheme.
What greenhouse gases are covered by the NZ ETS?
The NZ ETS covers emissions of all greenhouse gases covered by the Kyoto Protocol. The most common of these is carbon dioxide (CO2), but methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride are also included.
Where can I obtain further information on the NZ ETS?
Further information on the NZ ETS is available from the following Government websites: