Climate Change Response (Late Payment Penalties and Industrial Allocation) Amendment BillLast updated: April 6, 2023
Environment & Infrastructure
Climate Change Response (Late Payment Penalties and Industrial Allocation) Amendment Bill
Published: April 6, 2023
Submitting To: Environment Select Committee
Issue for Business: The amendment bill updates and changes several provisions within the Climate Change Response Act (CCRA) regarding industrial allocations (IA) under the Emissions Trading Scheme (ETS). BusinessNZ Energy Council supports this Bill, with amendments. We support updating IA eligibility thresholds to better reflect the higher carbon price and risk of carbon leakage. We support new activity provisions within the Bill. We support changes to the EAF's methodology and information sharing. On the matter of baseline resetting, we support a one-off change to the years used for collecting data on emissions intensity. This protects the integrity of the ETS going forward. However, we oppose continued baseline reviews every ten years, and the power to rest baselines every five years if the over-allocation test is met. This provision strips away the signal to invest in step-change decarbonisation projects. Large projects resulting in significant step changes would not proceed, as the economic returns would not outweigh the large opex and capex associated with a project. This is undesirable for the environment and the Government’s targets.