New Zealand tightens HFC phase-down plan

After the New Zealand government amended its Emission Trading Scheme to accelerate the HFC phasedown, HFC importers and manufacturers are this year facing increased levies and must apply for permits.

For 2019 the emission unit price under the New Zealand Emission Trading Scheme (NZ ETS) has increased by 17% for HFC importers and manufacturers compared to last year. Since 1 January 2019, businesses must pay NZ $25 (approximately €15) per emission unit.

Participation in the NZ ETS is mandatory for importers and manufacturers of HFCs operating as of 1 January 2013.

Since 2016, they had benefitted from a ‘one-for-two’ transitional measure that allowed non-forestry businesses to pay one emission unit for every two tonnes of carbon dioxide-equivalent emissions.

This measure was phased out over three years. Businesses benefitted from a 50% surrender obligation (hence acquiring two ETS units for 50% of the price) in 2017. The surrender obligation increased to 67% on 1 January 2018, 83% on 1 January 2018 and a full surrender obligation (100%) from 1 January 2019.

“The one-for-two subsidy was a temporary measure introduced during the global financial crisis to help moderate the initial costs of the ETS while businesses were struggling,” said the New Zealand government in a press release.

Permit scheme to enter into force on 1 February

Until now, HFC importers and manufacturers have been able to acquire an unlimited amount of emission units in New Zealand. This changes on 1 February 2019, when the government will add an emissions cap to the NZ ETS by introducing a permit scheme for all bulk imports and exports of new and recycled HFC gases into or out of New Zealand.

“We expect the permit scheme to be an adjustment for industries that use large quantities of HFC gases, like refrigeration and air conditioning, as they will need to reduce their use of HFC gases and switch to other more environmentally friendly refrigerants over time,” Dr Fiona Thomson-Carter, general manager of New Zealand’s Environmental Protection Authority (EPA), said in an interview with Climate Control News.