Context Key points

The proposed extensions to information sharing between the Environmental Protection Authority (EPA), the Ministry for the Environment (MfE) and the Commission will support the Commission to provide expert advice. [...] The issue of industrial allocation is of fundamental importance to the proper functioning of the NZ ETS and is one that interacts with several of the Commission’s functions. [...] Under the proposed changes in the Bill, the emissions intensity test will become easier to meet as the thresholds are updated to account for increases in the carbon price. [...] In summary, many of the amendments to industrial allocation settings proposed in the Bill will better align levels of industrial allocation to be proportionate to the risk of emissions leakage. [...] Amend Clause 14(1)(3A)(c) (with consequential changes to Clause 16(1)) to clarify that it is the effect of the allocative baseline before the level of assistance is applied, that needs to be higher than the activity’s emissions costs to allow the baseline to be amended.