Stationery Energy and Industrial Processes (SEIP) Technical Advisory Group (TAG) Notes of meeting held on 24 January 2008 9:30 – 12.30 at Treasury
Present: Mark Storey (Co-Chair), Chris Baker (Co-Chair), Carmen Blacker, Hans Buwald, John Carnegie, Roger Fairclough, David Fletcher, James Flexman, Stuart Frazer, Ewan Gebbie, Phillip Millichamp, Craig Palmer, George Riddell, Michael Rynne, Doug Watson.
Officials: Dave Brash, Sara Arhaim, John Scott, Leah Murphy, Andrew Hume, Jan Catley (minutes secretary).
Apology: Ray Deacon
Welcome and introductions with explanation by the Co-Chairs of how they see the process working. Meeting approved the presence of officials at the meeting.
Minutes of the first meeting on 19 December 2007 were taken as a correct record.
Dave Brash, General Manager, ETG, discussed the relationship between the TAG and the Climate Change Leadership Forum (CCLF).
Mark to complete.
John Scott spoke to paper SEIP/1
Clarification of the Terms of Reference: it was noted that these are still in draft stage and to be discussed at the next meeting of Climate Change Leadership Forum on 21 February 2008. There are three key issues: allocation, pre-1990 forests, units of trade, along with various work on the impacts. This group is to be focussed on technical advice. Relevant issues from this TAG group will be sent to the Leadership Forum and a paper from that group will be circulated for discussion by this group prior to publication on the website for availability to the public. Concern was expressed that some of the big issues are not being addressed by this TAG group and that the Leadership Forum may not be adequately technically well informed to deal with them. A request was made that Suzy and Mark Weldon be invited to the next TAG meeting to give a briefing on their work. It was requested that there be clear definition of the roles of both TAG and the Leadership Forum to ensure that the relationship between the groups is understood.
Action: It was agreed that the Chairman would contact the Leadership Forum to request a presentation from Suzy (and possibly Mark Weldon?).
TAG is keen to ensure contextual issues are well understood.
Paper on Design Decisions was tabled and explained. Design features not in the Bill will be covered by the Regulations. Key features in the Bill cover: dates of entry, allocation plan and processes, classes of people eligible. It was pointed out that Heat has not been included yet but advice will be provided to the Minister.
The free allocation model and progressive obligation were explained. Clarification on point of process on the items to be discussed was sought and it was explained that everything in the legislation is outside the Terms of Reference (TOR) for this group except for this particular item which is so closely inter-twined with allocation. Timing was raised and it was noted that changes will be made within the legislative framework.
Terms of Reference methodology re feedstock products was raised.
In discussion it was noted that it is important, in order for this group to be effective, that we come up with clear recommendations within the Terms of Reference. The Terms of Reference are quite specific. It was also clearly stated that members’ concerns over the process, that may be outside the scope of this group, are in part raised in order to influence officials present who will in turn discuss with the Minister. These expressions are also indicative of the monetary concerns for members that lie behind the issues.
Acceptance of the TOR was sought, although there was recognition with there may not be total agreement on points or consensus. Concern was expressed that there will be caveats where the Minister might assume that this group had concurred. The group needs to decide how to manage dissent. Caveat without prejudice. There needs to be explanation of the TOR viz a viz the issues. There may be ongoing discussion regarding the Terms of Reference and all members are participating without prejudice.
Tasks: there are three key tasks; Paper was tabled and explained in some detail.
- Advice from TAG will be instrumental in the writing of that plan. Outputs will be in the form of reports and Minutes by the end of September.
- Methodological process, defining emissions and emissions factors. Time frame for drafting response from this group will be ETG/MED will be working on the regulation promulgations. Work towards the end of 2008 though the absolute deadline is end of 2009. However, as prospective members need to opt in a year in advance, without necessarily knowing what is being opted into, it is therefore desirable that the draft regulations should be completed by end of 2008.
Comments were invited on allocation. The allocation plan vs absolute cap was raised and members asked what degrees of … to operate within that cap. Other European and international models were cited and in order to be better informed, the group asked that before the next meeting officials provide notes on the background work already undertaken.
Action: It was agreed that background notes would be circulated to members prior to the next meeting.
Members would like to better understand the numbers and also asked if the legislation has a specific formula. The group would like to see an assessment of what the projected effect will be by 2010; what will be the stringency, will it be 90% or 70%? It was noted that when looking at the electricity factors there may be serious issues. The size of the package was felt to be critical. Preference was expressed to have realistic numbers when looking at the different scenarios. Understanding of the numbers is vital. To look at the pros and cons of differing methodologies, numbers will be required before preference can be expressed on the different methodologies. It was felt that progressive allocation should remain on the table and that there should be caution about cutting out options before the group has had time to understand the issues.
Action: Next meeting to look at Task 1 after considering the background material. Third meeting to focus on Task 1 (a). (Duplication here???)
Issue of border adjustment was raised and would there be provision for contra with EU?
Trade-able unit types
Issue of HFC2s problem and effects this could have in the market?
Is there scope for the base year of 2005 to be changed?
A paper on border adjustment is coming from the Leadership Forum. Unit of Trade is in the primary legislation. Base year is not set in concrete. Other issues can be added to the list.
Trading regimes is of vital importance There was some discussion over alignment with the Australian process and it was noted that the EMT sits within the Prime Minister’s office and a timetable document is due to come out by end of April. Allocation may well differ from NZ, but there will still be time for this to feed into our Select Committee process. The Australian scheme has been brought forward to 2010 for implementation. Members wished to retain alignment with the Australian process.
Liquid Fuels TAG has not yet been finalised. While information has been circulated to perceived users of obligation who will make up the TAG, there is provision for future fuel producers to be included here. The Regulations were explained. Time frame is for promulgation of the Regulations at the end of June, immediately upon passing of the Bill. TAG will be disestablished once legislation on Liquid Fossil Fuels is passed. Note that Explanatory notes may need to be referenced in the Bill. An Exposure Draft for the Regulations will show balance between Bill and Regulations as well as between Regulations and Explanatory notes. Concern was expressed that Tag did not have wider representation of users.
Ag TAG policy paper was tabled. TAG has been put together with a secretariat. A contractor will provide much of the analytical work and report will be completed to MAF by October 2008. TAG includes representation from agriculture and scientific communities but is not a representative group of particular sectoral groups so will hold a series of broader sectoral stakeholder group meetings. TOR specify monthly meetings, dependent on material provided by contractor. Next meeting is 7 February when it is expected to have contractor on board.
Concern was expressed that there be some level of consistency between the TAG groups so that output from the groups is aligned. There is tension between users of points of obligation ???
Inter economy consistency is not ????
ETG will need to look at the issues as progress is made to ensure that there is no perverse favouritism. Concern is for fairness, taking into account the circumstances of each sector.
Action: If reporting by Chairs of different TAGs is felt appropriate, then Ag TAG and LF TAG could be invited to report to a future meeting of this group.
Supporting this ETG TAG
Budget of $100,000 has been initially provided, plus Tim Dan will be available. Admin support, governance, analytical and interdepartmental support will be provided in addition to the sum of $100,000. If members see areas where advice is to be sought, or advice outside of officials, there is budget available.
Shared Workspace with password access for storage of papers and minutes can be provided. Chat space was requested too. Public postings is addressed under Release of Information section.
Information Requirements since RFP was drafted. Informatin that already exists has been sought for discussion with ETG. A manufacturing endusers’ survey has been undertaken by Statistics Department but under the Statistics Act so the information has certain confidentiality around it. Many of the larger companies (the top 20 maybe) together with a sampling across the whole spectrum, have been surveyed. Info stats have been sought but confidentiality limits precise detail, so some of the larger companies involved have been approached for permission to use particular detail. Stats database has wide-ranging information that has been tested for distribution. This will be tested further to see if it provides adequate data at the level this group requires. Complementary information around projections is also required to look at going forward. There was query as to how the data is going to assess the impact on smaller businesses. Stats are currently looking further at the confidentiality issue and are also working further with the data.
Action: Report from Stats will be distributed to members and the Questionnaire used for the survey will also be circulated. TAG members to bring their own companies’ stats to next meeting. NB Stats’ definitition of firms (or terms????) may differ from individuals.
Data will be a useful though imperfect tool for working out the size of the pie. There was some discussion over deciding the actual base year to be used.
Action: Information requirements to be discussed at next meeting. Officials will provide Briefing paper on data.
Release of Information was discussed. Full release has been requested for public. As briefing papers provide information that is timely and useful it was felt that holding back for one month was too long.
Action: Agreed that five days after the meeting, if no objections have been received, the papers adopted at the meeting will be made available. Papers are to be circulated prior to meeting for members to read beforehand and discussed for release at the end of the meeting, along with minutes of the previous meeting.
Style of minutes. It was decided that minutes should be in note form, non-attributable, and with action points noted. Agenda to include allocation issues with background papers (was that for next meeting?????) Discussion around information (????)
Next meeting date: Tuesday 12 February 2008 is next meeting, but future meetings will be scheduled for the first Tuesday of the month. Conference call facilities will be provided for those unable to be present.
Meeting dates 2008:
12 February 4 March 2 April 6 May 3 June (Q B weekend) 2 July 5 August 2 September 7 October 4 November 2 December
Last updated: 15 September 2008
