What the ETS means for small and medium enterprises

On this page

Business Owners brochure

How small and medium-sized businesses can lower energy costs and reduce greenhouse gas emissions.

Greenhouse gas emissions from small and medium enterprises (SMEs)

This webpage does not discuss SMEs in the forestry and agricultural sectors. These are covered on the forestry page and the agriculture page.

SMEs contribute to climate change through their use of electricity, gas and transport fuels, and their waste, and will face higher fuel and electricity prices and waste disposal costs as a result of the Emissions Trading Scheme (ETS).

Emissions-intensive, trade-exposed smaller businesses may be eligible to receive an allocation of New Zealand Units (NZUs). If you think your business may fall into this category, check the information on the industrial allocation page.

The ETS does not directly involve the majority of New Zealand’s small- and medium-sized businesses (SMEs) and does not require most SMEs to report on their emissions or to trade NZUs. However, business owners can save money and make a difference in reducing greenhouse gas emissions by using energy more efficiently, reducing waste and, where economic, using renewable energy alternatives, such as solar power and wood energy.

Potential price rises

The main impact of emissions trading for most SMEs will be a rise in transport fuel and electricity prices and, from 2013, a rise in the cost of disposing of waste at landfills.

Until 2012, the costs of the emissions trading scheme for SMEs have decreased because of recent changes to the legislation which reduce the initial impact of the scheme. From 1 July 2010, fuel prices are likely to rise by about 3 c/L. Electricity costs are likely to increase by about 1c/kWh.

There will also be a range of secondary effects, such as increases in the prices of some goods as a result of increased freight charges and, from 2013, increased costs of disposing of waste at landfills.

SMEs may be able to avoid or mitigate these extra costs by becoming more energy-efficient and reducing waste.

How can SMEs save money on power and fuel costs?

Businesses of all sizes, and with all budgets, can reduce their energy use and costs.  It’s not difficult — many savings can be made with little or no financial investment. 

Becoming more energy efficient not only helps to combat prices rises in fuel and electricity as a result of the price signal, it also saves your business money and can help enhance your brand reputation by demonstrating environmental responsibility. The first step in managing the effect of emissions trading on your business is to measure your energy and fuel use.

After identifying your business’s total energy use, the next step is to make choices and take action to reduce the impact of increased electricity and fuel costs caused by the emissions trading scheme. Some of these choices can be made now and take little effort or investment, such as switching off appliances at the end of the working day; others take more investment and effort but have larger potential benefits, such as buying a fuel-efficient vehicle or investing in a technology that will reduce your energy use.

For ways to make your business energy-efficient, use the resources on the EECA Business website. The Ministry of Economic Development offers Envirostep, a free online environmental management tool designed especially for SMEs.

How do I measure energy and fuel use?

Your energy and fuel use is outlined on invoices from your suppliers.  Alternatively your suppliers may be able to give you information on your energy and fuel use over the last couple of years. 

Go to the EECA Business website for information on how to find out where your business's energy is being used, and how to keep track of it.

How many emissions do I produce?

The amount of emissions that result from your business will depend on whether you use coal, natural gas or electricity. These different fuel sources create different levels of emissions depending on their carbon content.

What assistance is available to SMEs?

As well as helping you avoid the extra costs of the emissions trading scheme, you can save money by becoming more energy-efficient.

EECA Business provides information, resources and support for businesses to become more energy-efficient — and use more renewable energy. Read case studies on how other businesses have reduced their energy use across a variety of industry sectors.

Fuel$aver is a useful website that provides information to compare the fuel consumption of different vehicle models. The website enables drivers to calculate vehicle fuel costs by considering their vehicle model, the distance travelled, the kind of fuel that is used, and their driving habits.

The Right Car website offers advice on choosing cars that use less fuel, produce lower emissions and have improved safety features.

Other information about climate change

Find out more about the science behind climate change and physical impacts and adaptation.

Last updated: 16 December 2011

Tools and information