Energy’s obligations: Reporting emissions and surrendering NZUs
Who is involved?
'The stationary energy sector' includes all fossil fuels (gas and coal) used in electricity generation and in the direct production of industrial heat, as well as geothermal energy. It does not include energy used for transport, emissions from industrial processes, or heating in commercial or residential facilities (emissions from these sources are considered elsewhere under the ETS).
What are the obligations for the stationary energy sector?
The stationary energy sector has been required to report its emissions since 1 January 2010. It is required to surrender New Zealand Units (NZUs) or equivalent imported emission units for emissions that occur from 1 July 2010.
During 2010, the sector was only required to surrender NZUs for emissions occurring between 1 July and 31 December. From 2011 on, surrender obligations apply to emissions for the full year.
Participants are required to submit an emissions return for each calendar year by 31 March of the following calendar year. NZUs for each year must be surrendered by 30 May of the following year.
Stationary energy participants are only required to surrender one NZU for every two tonnes of emissions, and they can buy NZUs from the Government to meet their obligations at a fixed price of $25 per NZU if they wish.
Changes taking effect from 2013
Under the previous legislation, the one-for-two obligation and price cap were intended to end after the transition period from 1 July 2010 to 31 December 2012. The Government has now extended these transition measures indefinitely.
Who are the participants?
There are about 80 stationary energy participants in the ETS. They are mainly people carrying out the ‘upstream’ activities described above, such as coal mining. Also, other companies further down the supply chain can opt in to the ETS, and take on a mandatory participant’s obligation. For example, an electricity generator using coal can choose to take on the surrender obligation of the mining company it buys its coal from. In these circumstances, the supplier of coal or gas is not liable for these emissions. Currently, there are five companies who have opted in to the ETS. They have the same reporting and surrender obligations as the mandatory participants whose obligations they have taken on.
I’m a participant. What do I have to do?
Anyone carrying out a stationary energy activity must complete a participant notification form from the Emissions Unit Registry.
Stationary energy participants must record information about fuel use during the year using the methods in the Climate Change (Stationary Energy and Industrial Processes) Regulations. They will need this information to complete and file an annual emissions return. The methods clearly set out how a stationary energy participant must calculate their emissions in their annual return.