Site search

Search

Consultation on amendments to the Climate Change (Stationery Energy and Industrial Processes) Regulations, the Climate Change (Other Removals Activities) Regulations and the Climate Change (General Exemptions) Order

What’s happening

The Ministry for the Environment is now consulting on draft regulations for the reporting of synthetic greenhouse gases emissions under the New Zealand Emissions Trading Scheme (NZ ETS).

The consultation period on the proposed regulations is from 28 June to 23 July 2010.

This factsheet is a guide for those who wish to make a submission in response to the draft regulations. It is intended for persons who manufacture, destroy, import or export synthetic greenhouse gases in bulk or contained in goods, and other interested parties.

This factsheet contains information on:

• NZ ETS requirements for persons who manufacture, destroy, import or export synthetic greenhouse gases
• making a submission
• the regulations
• the approach to emissions calculation and reporting
• definitions
• exemptions and thresholds.

Synthetic greenhouse gases in the NZ ETS

Importers and manufacturers

Importers or manufacturers of synthetic greenhouse gas (SGG) are required to participate in the NZ ETS. They must:

• collect and report information about their imports and manufacture of SGG from 1 January 2012, and
• surrender New Zealand Units (NZUs) to cover those gases from 1 January 2013.

To test their procedures, these people may voluntarily register as participants, and submit emissions returns, from 1 January 2011 to 31 December 2011.

Exporters and those who destroy SGG

Exporters and those who destroy synthetic greenhouse gas are eligible to receive NZUs for “removals” of those gases from 1 January 2013, if they meet the prescribed threshold. They may register as participants and voluntarily report under the ETS from 1 January 2011.

Date for regulations

The Ministry for the Environment intends to have the necessary regulations in effect by 1 January 2011, so SGG participants wishing to test their procedures by voluntarily reporting from this date can do so.

Making a submission

Feedback sought

The purpose of consultation on these draft regulations is to ensure the final version is practical, understandable, and cost effective for the persons that need to comply.

We are seeking feedback on the workability of the methods used in the draft regulations and any issues around collecting the necessary data including:

• Are the draft regulations clear and easy to follow?
• Is the required information (eg, equipment nameplate information, Customs point documentation) readily available from your records?
• Are the meanings of the defined terms clear?
• Is the reference to the ASHRAE Standard 34-2007 for identifying individual synthetic greenhouse gases from mixes helpful and will it be workable?
• What is your view on the proposed threshold for synthetic greenhouse gases in motor vehicles? Is it set at the right level?
• What are your views on the proposed exemptions for synthetic greenhouse gases contained in certain goods? Can you see any problems with the wording of these exemptions?
• Do you have a view on the workability of the proposed exclusion of eligibility for removals units for pre-2013 SF₆?

Sending a written submission

Written submissions are welcome and should be sent to: emissionstrading@mfe.govt.nz or sent in hard copy to Emissions Trading, Ministry for the Environment, PO Box 10362, Wellington, New Zealand. Submissions close on Friday 23 July at 5:00pm.

Where to find related documents

The draft regulations are available at www.climatechange.govt.nz/emissions-trading-scheme/participating/synthetic-gases . Hard copies are available from the Ministry for the Environment, 23 Kate Sheppard Place, Wellington.

A hard copy of the ASHRAE Standard 34-2007 will be available at the Ministry for the Environment’s head office in Wellington and one in the Auckland office for viewing if required.

For more information

For further information go to www.climatechange.govt.nz or call 0800 Climate (0800 254 628) or email emissionstrading@mfe.govt.nz.

About synthetic greenhouse gases

Gases included in the ETS

The ‘synthetic’ greenhouse gases included in the NZ ETS are:

• hydrofluorocarbons (HFCs)
• perfluorocarbons (PFCs), and
• sulphur hexafluoride (SF₆). 

Uses in New Zealand

Synthetic greenhouse gases are not currently manufactured in New Zealand. They are imported in bulk for use in products and equipment or contained in goods. Some of these gases, either contained in goods or in bulk, are exported. 

No destruction of synthetic greenhouse gases currently occurs in New Zealand but some gases are exported in bulk for destruction in Australia.

Synthetic greenhouse gases have specialist uses in air conditioning and refrigeration systems, aerosols and in electricity transmission.

Exemption: Perfluorocarbons from aluminium smelting

Perfluorocarbons are also produced and emitted as a by-product of aluminium smelting, but those emissions are dealt with separately under the industrial processes sector of the NZ ETS. 

Emissions and effects

Synthetic greenhouse gases can contribute very strongly to climate change. On average, their effect is thousands of times that of an equivalent weight of carbon dioxide. A kilogram of sulphur hexafluoride, for example, has the equivalent effect of almost 24 tonnes of carbon dioxide.

In 2008, synthetic greenhouse gases accounted for approximately one per cent of New Zealand’s reported greenhouse gas emissions in tonnes of carbon dioxide equivalent terms. Emissions from synthetic gases are expected to increase in the short to medium term.

About the regulations

The draft regulations are in three parts:

1. The Climate Change (Stationary Energy and Industrial Processes) Amendment Regulations 2010 establish the methodologies for reporting emissions from the import or manufacture of synthetic greenhouse gases in bulk or contained in goods.
2. The Climate Change (Other Removal Activities) Amendment Regulations 2010 provide methodologies to calculate removals for destroying or exporting synthetic greenhouse gases in bulk or contained in goods.
3. The Climate Change (General Exemptions) Amendment Order (No.2) 2010 defines exemptions that apply to aircraft and ships that contain synthetic greenhouse gases in their own refrigeration systems and are undertaking international journeys, goods that are for personal and non-business use, and motor vehicles up to a set threshold.

The regulations aim to establish practical methods by which participants can meet their reporting obligations under the NZ ETS. The requirements for data collection and verification are intended to provide the right balance between simplicity and the robustness of emissions returns.

Approach to emissions calculation and reporting

The mass balance methodology is used in the regulations. This approach is based on:

• the amount of synthetic greenhouse gases imported, manufactured, exported or destroyed in bulk or contained in goods
• the chemical composition of that gas or mix.

The methodologies used have been based on work completed by CRL Energy Ltd in its report of March 2010, available at www.climatechange.govt.nz/consultation/synthetic-gases/methods-for-synthetic-gas-regulations.

Methodology

The Climate Change (Stationary Energy and Industrial Processes) Amendment Regulations 2010 contains methods for calculating emissions from synthetic greenhouses gases contained in goods or imported in bulk.

The method for calculating emissions from the import of synthetic greenhouse gases contained in goods is:

• the number of the type of good, multiplied by
• quantity and composition of the gas in the good.

The method for calculating emissions from the import of synthetic greenhouse gases in bulk is the total quantity of gas imported.

Mixes

Many synthetic greenhouse gases are imported in mixes. The draft regulations define common mixes of synthetic greenhouse gases as a ‘class’ by reference to the “Designation and Safety Classification of Refrigerants” 34-2007 standard. This detailed designation and classification document was published in 2007 by the American National Standards Institute in conjunction with the American Society of Heating, Refrigerating and Air Conditioning Engineers (ASHRAE).

The “Designation and Safety Classification of Refrigerants” 34-2007 standard specifies the composition of synthetic gases present in refrigerant mixes. The composition of a synthetic greenhouse gas mix can be determined by referring to the tables in this standard. Some of the most common refrigerant mixes are listed in the schedule of the draft regulations, while others are on the ASHRAE website: www.ashrae.org/technology/page/1933

Methodologies for importing

In bulk

Process

The process for determining the emissions of a participant who imports synthetic greenhouse gases in bulk has two inputs: the quantity of synthetic greenhouse gases and their global warming potential.

Formula

E = A × GWP/1000

Where:

E is the emissions of the class of synthetic greenhouse gas imported in bulk for the year in tonnes carbon dioxide equivalent (t CO₂-e)

A is the total number of kilograms of each class of synthetic greenhouse gas imported in bulk in the year, as recorded at the customs point

GWP is the global warming potential for the class of synthetic greenhouse gas

Required information

The following information must be collected and recorded:

• the constituents of each class of synthetic greenhouse gas imported in bulk in the year
• the total number of kilograms of each class of synthetic greenhouse gas imported by the person in the year as recorded at the customs point.

Contained in goods

Process

The process for determining the emissions of a participant that imports synthetic greenhouse gases contained in goods has three inputs: the total number of pieces of equipment type, the synthetic greenhouse gas charge in that equipment and the global warming potential.

Formula

E = ∑ (A × B × GWP/1,000,000)

Where:

E is the emissions of the class of synthetic greenhouse gas imported in pre-charged equipment for the year in tonnes of carbon dioxide equivalent (t CO₂-e)

A is, for each type of pre-charged equipment containing the class of synthetic greenhouse gas imported in the year that were not exempted goods, the total number of units of the type of pre-charged equipment

B is the synthetic greenhouse gas charge for the type of pre-charged equipment in grams

GWP is the global warming potential for the class of synthetic greenhouse gas

Required information

The following information must be collected and recorded:

• the constituents of the class of synthetic greenhouse gas
• the number of units of each type of pre-charged equipment containing the class of synthetic greenhouse gas imported by the person in the year that were not excluded goods, as recorded at the customs point
• the synthetic greenhouse gas charge for the type of pre-charged equipment in grams.

The amount of gas (or gas mix) should be available from nameplate and labelling information or sale and purchase agreements.

Default charges for imported vehicles

For imported vehicles where the gas and charge amount is unknown there is the option to calculate emissions by category of vehicle using the default charges as outlined below:

Category of motor vehicle	Default charge (g) of HFC-134a
Cars, vans and utes	700
Trucks	1 200
Buses and off-engine refrigerated trucks and trailers	2 500

Methodologies for exporting

The Climate Change (Other Removal Activities) Amendment Regulations 2010 contain methods for calculating removals for the export of synthetic greenhouse gases in bulk or contained in goods.

The process for determining the removals by a participant who exports synthetic greenhouse gases uses the same formula as that for imports of synthetic greenhouse gases in bulk or contained in goods. To enable the composition of any synthetic greenhouse gas mixture being exported to be identified it may need to undergo chemical analysis.

Evidence required

To be eligible to receive NZUs for exporting SF₆ (either in bulk or contained in goods), a participant must hold evidence that the chemical was imported after 1 January 2013.

Documentation must be kept for audit purposes for any emissions return reporting SF₆ removals to show that the SF₆ being exported entered New Zealand after 1 January 2013.

Manufacturing and destruction

Although manufacturing and destruction of synthetic greenhouse gases do not currently occur in New Zealand the draft regulations contain methodologies for any future activity.

Definitions

There are several terms that have specific meanings in relation to synthetic greenhouse gases and the NZ ETS. Terms such as importing, exporting, synthetic greenhouse gas, class, charge, type (in relation to equipment) and motor vehicle, are defined in the interpretation section of the draft regulations or in the Climate Change Response Act 2002 itself.

Exemptions and thresholds

Exemptions are outlined in the Climate Change (General Exemptions) Amendment Order (No.2) 2010. The Minister for Climate Change Issues must be satisfied that each exemption does not materially undermine the environmental integrity of the Act and that the benefits are greater than the costs.

Proposed exemptions

The proposed exemptions include importing synthetic greenhouse gases if contained in:

• the refrigeration or air conditioning system of an aircraft, ship or container engaged in an international trip, including any domestic leg of an international trip
• a manufactured product that consists in part of that gas only because the gas was used in the manufacturing process (example – insulation foam)
• goods imported for that person’s personal non-business use and that are not intended for gift, sale or exchange
• motor vehicles if a person imports less than 100 tonnes of carbon dioxide equivalent (t CO₂-e) in motor vehicles in the year.

About the motor vehicle threshold

The proposed threshold for synthetic greenhouse gases imported in motor vehicles will reduce administrative and compliance costs for participants and the administrator, but not materially affect the environmental integrity or coverage of the NZ ETS.

The proposed threshold equates to approximately 110 cars per year (using 2007 data and an average charge of 700g HFC-134a per car). Applying this threshold would mean around 200 persons importing vehicles would be mandatory participants covering around 85 per cent of the imported HFC contained in vehicles. Without the threshold there could be over 6000 mandatory participants for the importing motor vehicles activity.

Removal activities exemptions and thresholds

There are similar exclusions and thresholds for the synthetic greenhouse gas removal activities to ensure there is no mismatch between the regulations as to what people are liable for under the NZ ETS and what they can claim removals for.

Guidelines

The SGG regulations will authorise the issuing of guidelines and standards relating to the data collection requirements in the regulations. Such Guidelines are expected to be published in the

New Zealand Gazette in the next few months (after the regulations are finalised and passed) and will contain further detail about matters like:

• the information participants may generally rely on in relation to gas composition, such as nameplates or labels for equipment or sale and purchase information for bulk gases
• the requirements for chemical analysis using a laboratory accredited to ISO 17025 if the gas composition (either in bulk or contained in goods) is unknown, and
• the type of evidence required to be held for audit purposes on the reporting of SF₆ exports as removals.

We are interested in your thoughts on the content of these proposed data collection requirements for incorporation in the Guidelines.

Availability

• Download PDF
  (100 KB)
• Order a free copy: Email orders@mfe.govt.nz
• Problems with PDFs?

This site is administered by the Ministry for the Environment.