Emissions trading scheme

• Implementing the emissions trading scheme
• Input and engagement
  • Transport Fuels Technical Advisory Group
• Emissions trading scheme reporting

Transport Fuels Technical Advisory Group (TF TAG)
Notes of 3^rd meeting held on 2 May April 10.30am – 1pm at the Ministry of Transport

Present:
Kirstine Hulse, Andrew Campbell (Chair), David Jacobsen, Geoff Davis, Barry Blackett, Greg Visser, Roger Fairclough (official), Jörn Scherzer (official), Leah Murphy (official), Ian Twomey (expert adviser), David White (joined the meeting via phone at 11am for about half an hour), Dave Bodger

Apologies:
Ian McDonald, Paul Kelway, Frank Wong

1. Meeting commenced with a welcome from the Chair.
2. Previous minutes
   • It was noted that two minor amendments would need to be made to the previous minutes from the meeting on 3 April. Subject to these amendments, the minutes were accepted.
     • Where the minutes state that two fuel categories, bunker fuel oil and power station fuel oil should be ‘removed’ from the obligation fuel list, the text should be changes to reflect that these fuels will be effectively ‘transferred’ to the item heavy fuel oil because their characteristics mean that they do not need to be separately identified. In other words, these fuels will still be caught by the regulations for the purposes of the ETS.
     • Amend all references to KL and replace with kl.
   • It was agreed that with these changes the minutes could be publicly released.
   • Actions as stated in the previous minutes were revisited and checked:
   • Two items were added to the agenda:
     • Report on Unique Emission Factor process from officials
     • Discuss how to handle fuels that are partly loaded at midnight on 1 January and at midnight on 31 December.
3. Update on progress of Climate Change (Emissions Trading and Renewable Preference) Bill and Regulation process
   Leah Murphy explained the current status of the Climate Change (Emissions Trading and Renewable Preference) Bill (‘the Bill’). She noted the following points:
   • Select Committee Process continues, public hearings still under way, transport-related submissions to be heard on the 7th, 8th and 12th of May
   • It was noted that there is currently a lot of public attention on the Bill and other policy initiatives due to the high fuel prices
   • So far the Select Committee Process is still on track, the Committee is due to report back to the House by 6 June 2008 (biofuels report due back on 4 June)
4. Update from The Stationary Energy and Industrial Processes (‘SEIP’) TAG
   Roger Fairclough noted that most activities of the TAG are being undertaken in  a series of sub-groups:
   • Eligibility
     • Trade exposure test
     • Materiality
   • Allocation parameters included in the ETS Bill
     • Historical grandparenting of 90% of 2005 emissions
     • Phase-out of free allocation between 32013 and s2025
   • Progressive obligations as an alternative to free allocation (this issue is parked at the moment as it has been considered to difficult at present)
   • Methodology’s for calculating emissions under the ETS
   • Data analysis, this sub-group is operating on 2 levels:
     • Data gathering to support other subgroups activities.
     • Working with public data from MED (this is under way)
5. Updated Climate Change (Liquid Fossil Fuel) Regulations 2008 as at 29 April 2008
   Officials identified the changes made to the regulations. The following additional amendments were requested:
   • 3 (1) – add definition of kilo litre (ie 1,000 litres).
   • 3(1) – add in that singular also means plural.
   • 3(1) – consider if a definition of ‘emissions’ is needed to clarify that we are talking about emissions of greenhouse gases as determined by the emission factors which take into account emissions of carbon dioxide, methane and nitrous oxide.
   • 6 (d) – specify that this relates to jet fuel sold for use on a domestic trip (flight).
   • 6(g) and (i) - replace “80 centistokes” with “85 centistokes”
   • 8(1) and (2) – replace all references to ‘emissions in carbon dioxide equivalent emission of greenhouse gases’ with just emissions (and ensure that the definition of emissions reflects this full statement).
   • 8(1) and (2) – replace every instance of the word ‘litre’ with ‘volume expressed in kilo litres.
   • 9 – should only need item a – which is domestic fuel only. Delete item b.
   • 9 and 10 - Need to update the formulas based on the changes made in sections 7 and 8.
   • Schedule 2 – add the letter ‘e’ to reflect carbon dioxide equivalent
     Action: officials to arrange an update to the draft regulations to reflect the above further changes.
6. Point of data collection
   Officials provided a brief overview of the pros and cons of having the point of obligation at the point of sale or excise. Views were divided over this item, some oil companies supporting the point of sale and others supporting the point of excise.
   
   Oil company members suggested a meeting with supply managers and no officials to discuss and find a resolution. Supply managers would ideally obtain the views of their technical and accounting staff prior to attending the meeting. NZRC will join the meeting. Ian Twomey will facilitate the meeting.
   
   Action: Oil company members to arrange a meeting of their supply managers and to invite NZRC and Ian Twomey. The meeting is to take place prior to the end of May, to give sufficient lead time prior to the next TAG meeting tentatively scheduled for 10 June for the preparation of papers and updated regulations.
7. Timetable for finalisation of regulations
   It was noted that the regulations need to be finalised prior to the election (and to any stand-down period in the lead up to the election).  Members agreed that a month delay to the finalisation of the regulations would be acceptable, this would allow for a delay from July to August.
   
   Post metering officials note: further discussion about timetable will take place at the next meeting.
8. Other business
   Additional agenda items were not discussed at time did not permit. Deferred to next meeting.
   Action: Officials to reflect additional agenda items on next meetings agenda.
9. Next meeting
   It was noted that the (next) fourth meeting will be held on June 10.
   

The Chair closed the meeting at approximately 12.45 pm.

Last updated: 15 September 2008