Terms of Reference: Technical Advisory Group - Stationary Energy and Industrial Process Components of the New Zealand Emissions Trading Scheme

December 2007

Background

The Government has decided in principle that stationary energy and industrial process emissions will be brought into the New Zealand Emissions Trading Scheme (NZETS) on 1 January 2010. 

Including stationary energy and industrial processes in the NZETS presents a number of challenges which need to be worked through.  Many of these challenges are highly technical in nature, and are attributable to issues such as the complex and specialised nature of industrial processes, complexities in markets and distribution networks for electricity and gas, associated issues of measurement and verification, and economic issues.  The Emissions Trading Group (ETG) are therefore seeking a high degree of technical and specialist input from the relevant sectors in developing the policy to implement the stationary energy and industrial process components of the NZETS.

The General Manager[Note that this role may transfer to the General Manager, Central Government Policy Group, Ministry for the Environment, during 2008.] (GM) of the Emissions Trading Group is establishing a Technical Advisory Group (TAG) to act as the principal tool for engaging the energy and industrial sectors on the technical design elements of this component of the NZETS.  The TAG will comprise technical and policy specialists from the industry and energy sectors, science/technical community and government.  The goal is to ensure that the NZETS functions in a sensible and practical manner for the stationary energy and industrial process sectors.

he TAG will contribute to the development of the NZ ETS and via this to outcomes under the New Zealand Energy Strategy.  A copy of the Government documents The Framework for a New Zealand Emissions Trading Scheme and The New Zealand Energy Strategy are attached for reference.

Membership

The TAG will comprise twelve or fewer technical and policy experts from within industry, government, and the scientific/technical community, with a Chair appointed by the General Manager ETG.  Membership shall include:

  • One member from the Emissions Trading Group;
  • One member from the Ministry of Economic Development;
  • One member from the Ministry for the Environment;
  • Members with expertise/knowledge in electricity generation or the electricity sector more generally;
  • Members with expertise/knowledge of issues relevant to major energy users;
  • Members with expertise/knowledge of issues relevant to industrial process emitters;
  • Members with expertise/knowledge of issues relevant to Small and Medium Enterprises;

All members of the TAG will be appointed by the General Manager of the ETG.  These members will be selected to provide specific technical and/or policy expertise rather than to represent particular interests or interest groups. In deciding the make-up of the TAG a balance of skills will be sought.

The TAG may invite others with relevant expertise to attend meetings from time to time and join sub-groups as necessary.

Role

The role of the TAG is to provide guidance and advice on technical design elements of the stationary energy and industrial process emissions components of the NZETS. The Terms of Reference of the TAG do not extend to those design features that are specifically addressed as provisions in the Bill, for example, the definition of emission obligations, the base year for allocation, and the phase out of assistance.

  1. A key task of the TAG is to advise on options for providing assistance to industry. Specific issues related to this task are:
  • Defining and evaluating different options for free allocation or other assistance.
  • As part of the above, defining thresholds (size and scope) for assistance, rules for entry, trade exposure tests, recognition of early action etc.
  • Defining activity data and emission factors to assess the basis for free allocation or other assistance

Other technical design issues to be addressed by the TAG include

  • Defining points of obligation and in particular advising on whether and how to administer opt ins/carve outs
  •  Advising on specific issues about electricity – how to assess  the impacts of emission prices on electricity prices, as an input  to options for assistance

Other roles of the TAG include:

  1. Peer review the findings of technical/policy reports and perform a general quality assurance role;
  2. Participate in a series of wider stakeholder seminars/workshops;
  3. Facilitate the delivery of a report to ETG outlining key technical considerations and recommendations for areas relevant to the stationary and industrial process sectors, including:
    • Methodologies and processes for monitoring, reporting and verification of emissions;
    • Accounting for mitigation behaviour on site; and
    • Work required for implementation.

In fulfilling its roles, the TAG will uphold the broad NZETS core design/objectives and allocation principles.

a) Secretariat

The TAG will be serviced by a special secretariat that will perform both an administrative role and an analytical role.  Administrative functions include:

  1. Coordinating TAG meetings and recording minutes;
  2. Compiling and distributing meeting papers;
  3. Coordinating and managing a series of wider stakeholder workshops on the stationary energy and industrial process component of the NZETS; and
  4. A general facilitation role and other roles.

Deliverables

The delivery of a report(s) to the General Manager ETG outlining key technical considerations and recommendations for areas relevant to the stationary energy and industrial process sectors as described above.

The Chair of TAG will be invited to report bi-monthly to the ETG.

Reports from the TAG will be forwarded to Ministers and the Climate Change Leadership Forum (CCLF).

Information made available to the TAG or produced by the TAG will be made publicly available at an appropriate time as defined by the Chair in consultation with the General Manager ETG

The ETG retain full privilege to accept or reject the recommendations of the TAG.

Meeting process

The TAG will meet on a monthly basis or more or less frequently as determined by the Chair.

A quorum will be half plus one member.

Sub -groups working on specific tasks may be established.

Substitution of membership is allowable with the prior permission of the Chair.

In the absence of the Chair of the TAG, the Chair will appoint an acting Chairperson who will be a member of the TAG.

Members will notify the secretariat within a reasonable time frame if they are unable to attend a meeting.

If a member is absent for more than three meetings without approval of the Chair, their position may be considered vacant.

Minutes of the meeting will be recorded and circulated to members within ten working days of the meeting.

Once endorsed by the TAG, minutes of meetings will be publicly available.

Resources

In addition to the Secretariat’ resources some funding for independent analytical work (including joint funding) will be made available subject to budget constraints.

Duration

The TAG will submit a final report on the stationary energy and industrial process emission component of the NZETS by end of September 2008.

The TAG will be deemed to have fulfilled its role upon the delivery of this report, or on the decision of the GM ETG and will disband at that point.

Participation in good faith

The primary role of the TAG, is the provision of independent technical and policy advice.  Members are therefore expected to participate without prejudice to the policy outcome.  Members of the TAG are required to act in good faith and on a ‘no surprises’ basis.

Information prepared for the TAG or by the TAG will be of interest to member organisations and wider stakeholders.  Where information has been made available to members, they may only circulate it where prior approval has been obtained from the Chair.

Review/assessment of performance

The Chair of the TAG in consultation with other members of the group, will conduct a self assessment of performance after four meetings.

The results of the assessment will be forwarded to the General Manager ETG along with any recommendations for revising the terms of reference for the group.