As the New Zealand Government rolls out its plans for meeting the country’s emissions reduction goals, Aotearoa New Zealand’s Emissions Trading Scheme (NZ ETS) is in a period of change.

The Government has now committed to its first three emissions reduction budgets, broadly in line with the Commission’s advice, and published its first emissions reduction plan. The plan recognises the need to reduce gross emissions to reach net zero long-lived gas emissions sustainably. It also outlines a range of policies, in addition to the ETS, to help drive down emissions.

This advice on unit limits and price control settings has been developed in line with the intent of the Government’s emissions budgets and emissions reduction plan, and taking into account this shift in the market. It has also been informed by our engagement with a range of market participants, intermediaries, and members of bodies with an interest in the NZ ETS, which has enabled us to test ideas and enhance our understanding of the market.

The Commission has based its advice on existing data, projections and modelling, and presented their advice to the nearest 0.1 million units. However, this should not be taken as an indication of certainty about the future. Markets are inherently uncertain, and the Commission will update their advice annually as better information becomes available.

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