New Zealand consults on Synthetic Greenhouse Gas Levy level

In New Zealand the Climate Change Regulations 2013, which foresee SGG levy to start on 1 July 2013, set out a transitional methodology for setting the carbon price for the SGG levy.

As the transitional period will last until the end of 2013, the Minister for Climate Change Issues in New Zealand is seeking feedback on developing a permanent methodology for setting the carbon price, which should be used as of 2014.

Interested parties are invited to submit their comments until 17 May 2013.

Main questions assessed during the consultation

With regards to the carbon price methodology, the consultation aims to address two main questions:

• Which type of emission unit to use to value the carbon price?: The NZ Government of New Zealand believes that the best emission type to be used to value the carbon price is the currently used second Certified Emission Reduction unit (sCER), which is well traded and has a clear market price. However, the Minister for Climate Change Issues is open for other suggestions, if they prove to be more effective.
• Which point in time to take the carbon price from the chosen emission unit?: Concerning the reference time to be used for the carbon price calculations, the New Zealand Government has suggested three options, which would include the average daily spot price of the chosen emission unit in the previous financial year, a shorter average (for example, a six-month average) or the spot price of the chosen emission unit on 30 June 2013. This date has been chosen in order to ensure a six months gap between when the price is calculated and the start of the levy year, what is necessary for administrative purposes.

In view of the proposed regulations for the SGG Levy, a separate consultation was also held until 3 May 2013 on the exemption for motor vehicles.

Comments welcome by 17 May 2013

The deadline for submitting comments to the consultation on carbon price methodology is 17 May 2013, 17:00 NZST.

Submitted comments will be analysed by the Ministry of Environment and reported to the Minister for Climate Issues for the final decision.