Proposed regulations for synthetic greenhouse
gases in the NZETS
9 October 2012, Auckland
Meeting objective
For you to understand:
1. The proposed regulations.
2. The difference between the regulations and
the Bill
3. How the changes will effect you.
4. What the process going forward will be.
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Workshop agenda
Time
Item
10.30 – 10.50
Part 1: HFC/PFC Levy
10.50 - 11
Part 2: Exporting HFC and PFC
11 – 11.15
Part 4: Updating Global Warming Potentials
11:40 – 12
Questions?
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Background
• The Government has announced a number of
changes to the New Zealand Emissions Trading
Scheme (NZ ETS), which will be implemented
through the Bill. The Bill has been tabled in the
House and referred to the Finance and
Expenditure Select Committee.
• Most of the changes flow out of the Bill
Assessment Criteria
•
Balance the need for reducing emissions with
administration and compliance costs
Proposed Regulations
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Part 1: The Goods Levy Formula
Average refrigerant charge x GWP x carbon price = Levy
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Air-conditioning
Proposed categories
Air conditioning machines;
comprising a motor-driven
fan and elements for
changing the temperature
and humidity, window or
wall types, self-contained or
split-system, containing
hydrofluorocarbons, single
phase, of cooling capacity
less than or equal to 4kW
Assumed Average
HFC or
charge
mixture (grams)
R410A
1000
Global
warming
potential
2090
Levy per unit of
CO2
measurement
equivalent
Unit of
for effective CO2
(tonnes) measurement price ($9.69)
2.09
Per number
of items in
class
$20.25
Final levy
rate
(including
transitional
phase
measures)
$10.13
Refrigeration
Proposed categories
Refrigerators and
freezers; combined
refrigerator freezers,
fitted with separate
external doors,
containing
hydrofluorocarbons,
compression type,
200 litres and over but
less than 300 litres gross
internal capacity
Assumed
HFC or
mixture
Average
charge
(grams)
Global
warming
potential
CO2
equivalent
(tonnes)
HFC-134a
110
1430
0.1573
Unit of
measurement
Per number of
items in class
Levy per unit
Final levy
of
rate
measurement (including
for effective transitional
CO2 price
phase
($9.69)
measures)
$1.52
$0.76
Other categories
• Furniture incorporating
freezer/refrigerator display
cabinets
• Heat pump
• Water coolers
• Dehumidifiers
•
•
•
•
•
Ice cream makers
Vending machines
Truck containers
Truck trailers
Fishing vessels
The approach under the ETS was to include everything unless it was exempt. Under
the levy it is the opposite, unless the product is mentioned then there is no cost. The
current exemptions i.e. asthma inhalers and those importing products for household
use will still apply. Other goods not covered are aerosols (Customs has advised that it
is not practical) and fire extinguishers (as this is safety equipment).
Impact of levy
• Reduce administration costs, as each importer will not need to identify exact
amounts of HFC/PFC in their products.
• Diminishes the costs for the collection (Customs) and enforcement
(Environmental Protection Authority) agencies, as collection and verification
of exact refrigerant charges would be highly administratively intensive.
• Raises approximation issues
• Assumed relationship between refrigerant charges and cooling capacity (for
the air-conditioning importers) or internal volume (for household
refrigerators and freezers importers). It is assumed that the larger the cooling
capacity or internal volume, the more SGG contained in the equipment. This
may not always be the case.
The HFC/PFC levy – Consultation questions
•
Do you agree with the proposed motor vehicle and goods classes?
– If not, what alternative classes would you propose instead?
•
Do you agree with the Government’s estimated impacts of its proposed classes?
– What other impacts and costs have not been identified/considered?
– How would these impacts and costs differ under an alternative approach?
•
Do you agree with the proposed average refrigerant charges?
– If not, what alternative average refrigerant charges would you propose instead?
•
•
•
What do you think the impacts and costs of the proposed average refrigerant charges would
be?
Do you agree with replicating the existing exemptions in the NZ ETS with the levy?
Do you agree with the proposed reporting requirements?
For all your answers please explain why and provide evidence of the impacts and costs.
Part 2: Exporting HFC/PFC
• Export criteria:
– all the components of the bulk HFC/PFC exported (or if the
HFC/PFC was imported in goods, the goods themselves) were
imported after 31 December 2012; or
– if the person exporting bulk HFC/PFC or HFC/PFC contained in
goods is a manager of a product stewardship scheme
accredited under the Waste Minimisation Act 2008,
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Options for enforcement
• Self-assessment model
• Verification of information
Exporting HFC/PFC
• Add the levy categories as default charges for
exporting goods
Exporting HFC and PFC – Consultation questions
• Do you agree with the proposed criteria?
– If not, what alternative criteria would you propose instead?
• What option for enforcement do you prefer? (Self-assessment
model or verification of information)
• Do you agree with the Government’s estimated impacts?
• What other impacts and costs have not been
identified/considered?
For all your answers please explain why and provide evidence of
the impacts and costs.
Part 4: Global Warming Potentials
• New Zealand is moving to the IPCC’s Fourth
Assessment Report.
• Global warming potentials will increase for most
refrigerants:
– HFC-134a: 1300  1430
– R404A: 3260  3920
– R410A: 1730  2090
New refrigerant gases
•
•
•
•
HFC-152
HFC-161
HFC-245fa
HFC-236ea
• HFC-236cb
• PFC-9-1-18
• HFC-365mfc.
Removing exemption for HFC-365mfc and HFC-245fa
Updating global warming potentials – Consultation questions
• Do you agree with the proposal to include these new
HFC/PFCs?
• Do you agree with the Government’s estimated
impacts?
• What other impacts and costs have not been
identified/considered?
For all your answers please explain why and provide
evidence of the impacts and costs.
What does this mean for you?
So what does this all look like?
Customer
Import
• Bulk = Pay units
• Goods = Pay levy
• Increased cost of
gas for goods. Pass
this on to endconsumer.
• Motor Vehicle is
registered = pay levy
ANY WILFUL RELEASE IS ILLEGAL
Export
• In goods = units
• For destruction
= units
What’s next?
Introducing the levy will
happen through an Act change
Proposal
• Government
has said this
is the
preferred
direction
First
Reading/Select
Committee
• The changes
will be
introduced to
Parliament
• Parliament will
refer them to
Select
Committee
Select
Committee
• Opportunity
for
submission
• September
Second
Reading
• Parliament
will debate
Final
Reading
• The Bill
becomes
law
• We
anticipate
this to
happen
before the
end of the
year.
Making a submission
The Ministry for the Environment welcomes written submissions on the proposed
regulations for synthetic greenhouse gases to be implemented as a result of the
Climate Change Response (Emissions Trading and Other Matters) Amendment Bill.
Submissions are due by 5.00pm on 15 October 2012.
Please send your submission by email to: climatechange@mfe.govt.nz with the subject
field ‘SSG submission’.
ETS Operational Policy Team
Ministry for the Environment
PO Box 10362
Wellington 6143
Next steps
Submissions will be analysed by the Ministry for the
Environment and reported to the Minister for Climate
Change Issues for final decisions. Changes to the
regulations are expected to be made before 31
December 2012 and come into force from 1 January
2013. Updates about the process will be provided on the
climate change website: www.climatechange.govt.nz.
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Questions?
0800 CLIMATE
climatechange@mfe.govt.nz
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