Frequently asked questions: Energy

The main impact of the ETS in the electricity sector is to favour electricity generation investments in renewable sources of power such as geothermal, wind, solar and hydro, over fossil fuels such as coal and gas.As an electricity user, you can reduce emissions in the generation sector by using electricity efficiently and managing your demand.  The Energy Efficiency and Conservation Authority website has lots of information about efficient use of electricity at home and in business. 

The  ETS applies only to emissions generated in New Zealand. Therefore it does not apply to emissions produced in another country from coal imported from New Zealand. This is consistent with our obligations under the UNFCCC and the Kyoto Protocol, where the country importing and using New Zealand coal, for example Japan, is responsible for the emissions. On the other hand, the ETS makes New Zealand companies responsible for emissions from imported coal.

Micro-generation from a renewable source such as hydro is not subject to the ETS because it does not result in greenhouse gas emissions. However, the price of emissions is reflected in the cost of micro-generation from coal, gas and geothermal energy.

There is no nuclear energy generation in New Zealand. The Government has decided that Kyoto units generated through nuclear energy offset projects will not be permitted into our emissions unit registry and will not be acceptable for compliance with the ETS.