Synthetic Greenhouse Gas Levy enters into force in New Zealand

The Synthetic Greenhouse Gas (SGG) Levy, which entered into force on 1 July 2013, applies to a range of goods including freezers, fridges, air-conditioners, heat pumps as well as refrigerated vehicles and containers imported to New Zealand. The levy rates for goods containing hydrofluorocarbons (HFCs) and perfluorocarbons (PFCs) are linked to the price of carbon and vary between items to reflect the amount of gas, the specified gas and its global warming potential.

SGG levy rates for goods

The newly introduced SGG levy for goods, which will be collected by New Zealand Customs, applies to air-conditioning equipment, refrigerators and refrigerator units, freezers, heat pumps and dehumidifiers containing synthetic greenhouse gases.

The exact levy rate is calculated either per item or per kilo (kg) of SGG charge contained in the equipment, depending on the gas used, the specific subsector or cooling capacity. For instance:

• for air-conditioning equipment the levy can vary between $5.88/kg of R134a (€3.50/kg of R134a) for window or wall types, self-contained or split-system, three-phase equipment and $30.06 (€18.21) per unit of window or wall types, self-contained or split-system, of cooling capacity greater than 10 kW that contain R410A.
• for commercial display cooling and freezing equipment incorporating refrigerating/freezing equipment the levy amounts to $2.35 (€1.40) per unit for equipment containing R134a, rising to $9.67 (€ 5.76).
• for heat pumps the levy can vary from $5.88/kg of R134a (€3.50/kg of R134a) for three phase units to $30.06 (€18.21) per heat pump unit that is single-phase, contains R410A, and is of cooling capacity greater than 10 kW.

The levy also applies to parts for refrigerating or freezing units charged with refrigerant for all types of household and commercial equipment and some heat pumps.

SGG levy rates for vehicle AC

The scheme to calculate levy rates for vehicle air conditioning (AC) is less complicated than the one for goods. For motor vehicles, containing HFC-134a with global warming potential (GWP) of 1430, the SGG levy will be calculated per vehicle and will vary depending on charge size:

• $3.53 (€2.10) for small passenger motor vehicles (charge size of 600g)
• $4.70 (€2.80) for medium passenger cars (charge size of 800g) and
• $23.51 (€13.99) for large passenger vehicles with (charge size of 4kg)

The SGG vehicle levy will be collected by the NZ Transport Agency (NZTA) when vehicles are first registered in New Zealand.

Permanent methodology for SGG levy is under way

The introduced SGG levy rates mark the beginning of a transitional period that will last until the end of 2013. Following a consultation period in May 2013, the Ministry of Environment is currently working on a permanent methodology for setting the carbon price for the future levy years. The new methodology should be used as of 2014.

The SGG levy, which will be subject to annual review by the Ministry of Environment, is part of New Zealand’s Climate Change Response Act 2002 and the Climate Change (SGG Levies) Regulations 2013.