Frequently asked questions: Participating in the ETS

Where do I get NZUs?

You can buy NZUs from another participant in the NZ Emissions Trading Scheme (ETS), or buy Kyoto units internationally (subject to some restrictions).

Until the end of 2012, participants required to surrender NZUs also have a ‘fixed-price option’ of paying the government $25 for each unit they’re liable to surrender.

See the NZ Emission Unit Registry website for more information.

How can I sell my spare NZUs?

You can sell NZUs through direct bilateral agreements with buyers, through a broker or through an exchange. Some NZUs can also be converted into Kyoto Units and sold overseas. For more information, see the Guide to Kyoto Units and Rules on the NZ Emission Unit Registry website.

An array of financial service providers in the private sector can help with these transactions.

What are the tax implications of the ETS?

ETS transactions have income tax and goods and services tax (GST) implications, although the GST is zero-rated. 

Please see Tax treatment of transactions in emission units (Inland Revenue website). If you require further information please contact Inland Revenue.

What are the penalties if I do something wrong?

You could be fined up to $24,000 if you fail to collect emissions data or other required information, calculate your emissions and/or removals, keep records, register as a participant when you are supposed to, submit an emissions return when required, comply with requirements in relation to allocation or notify the administering agency or provide information when you are required to do so.

You could be fined up to $50,000 if you knowingly alter, falsify or provide incomplete or misleading information about any of your obligations under the ETS, including your emissions return.

If you deliberately incorrectly report about your obligations under the ETS to gain financial benefit or avoid financial loss, you could be fined up to $50,000 and/or be put in prison for up to 5 years.

In the first year that a sector enters into the ETS, if you mistakenly surrender less units than you are meant to due to a reporting mistake, no financial penalty will apply but you’ll be still required to surrender those units. For more information, see the Guide to Participant Obligations & Offences.

What happens if I fail to surrender NZUs when I’m required to?

If you fail to surrender NZUs when you’re required to or have surrendered less than you were meant to, you’ll have to surrender those NZUs and pay a penalty of $30 for each NZU.

This penalty may be reduced by up to 100 per cent if you state voluntarily that you’ve failed to surrender the required NZUs or made a mistake in your emissions return before the administering agency sends you a penalty notice or you’re visited by an enforcement officer.

 

Last updated: 16 December 2011