Compliance

As a recipient of NZUs you will need to meet the statutory compliance requirements.  This section outlines the key requirements to help you but is not an exhaustive list. 

Requirements if you receive a provisional allocation

If you receive a provisional allocation then you must make an annual adjustment between 1 January and 30 April of the following year.

  • If you apply for a new provisional allocation, this will be done automatically.
  • If you do not apply for a new provisional allocation, you will need to make an annual adjustment separately.  You can do this using the online application form by choosing  the annual allocation adjustment application type.

If you stop carrying out an activity

If you received a provisional allocation for the current year and stop carrying out the activity you must notify the Ministry in writing.  You can notify us by sending a signed letter to ETS Allocations Team, Private Bag 63002, Waterloo Quay, Wellington 6140, or by sending an email to etsallocations@epa.govt.nz.  View an example letter here.

If you permanently cease carrying out the activity

If you have received a provisional allocation you must notify the EPA and make a closing allocation adjustment.  This must be done within 20 working days of ceasing carrying out the activity on a permanent basis.  You can make a closing allocation adjustment using the online application form by choosing the closing allocation adjustment application type.  You do not need to make an annual adjustment at the start of the next year if you make a closing allocation adjustment.

If you restart carrying out the activity after making a closing allocation adjustment you can apply for any extra units you may be entitled to receive by making an annual allocation adjustment. You can make an annual allocation adjustment using the online application form by choosing the annual allocation adjustment application type. 

If you temporarily cease carrying out the activity

If you received a provisional allocation and temporarily cease to carry out an activity you must notify the EPA as soon as practicable after the three month cessation.  If you have stopped carrying out the activity for the year the EPA may require you to make a closing allocation adjustment. If you are required to make a closing allocation adjustment, you will be advised in writing and you can make a closing allocation adjustment using the online application form by choosing the closing allocation adjustment application type.

Review and audit

The EPA may require you to provide information to:

  • confirm you are entitled to receive an allocation,
  • confirm the number of units you have applied for or have received is correct, or
  • check that you are meeting your obligations under Part 4 or 5 of the Act

If you are required to provide information you will be advised in writing.  The notice will tell you what information is required

  • which section of the Act the request is made under
  • the deadline to provide the information
  • how the information should be provided, and
  • any consequences or penalties that you will incur if you do not provide the information.

The EPA will also carry out risk-based audits to check that allocation applications are genuine, and that data supplied in applications is accurate.

If you are selected for an audit you will receive a letter from the Ministry explaining the process before the audit begins.

Penalties under the Act

There are penalties under the Climate Change Response Act 2002 for providing false information on applications for industrial allocation, and failing to keep required records. Make sure that any data you submit on your application can be supported with your records. Penalties may include being required to repay any over allocated units, a fine of up to $50,000 and imprisonment for up to five years.

Publication of allocations

The Government publishes information regarding industrial allocations. Below is a table that outlines specifically what and where information is published.

What and where information is published
Type of
application		 What is published? Where is it published? Can you request that your information be withheld?
Provisional allocation details The names of applicants that receive an allocation.
The name of the activity that the person carries out.		 Provisional allocation is only available from the Climate Change web site. No

Final allocation details

The names of applicants that receive an allocation.
The name of the activity that the person carries out.
The number of NZUs allocated to the applicant (net of any annual or closing adjustment required).

The Gazette
Final allocation details are published on the MfE web site.

You can request that the number of NZUs allocated received be withheld (see below for details)

The applicant can request the Chief Executive to withhold publication of the number of NZUs allocated if publishing the information would be likely to unreasonably prejudice the commercial position of the eligible person who received the allocation (CCRA section 86B(6)).
The request must:

  • Be in writing using the application form (available on request)
  • Identify the specific harm that the person will suffer if the information is published
  • Explain why the harm caused would be unreasonable, and
  • Clearly demonstrate how publishing the person’s allocation details will cause the harm.

If you have questions about the publication of information, or if you need more information about the publication process please discuss this with your contact within the ETS Allocations team or email etsallocations@epa.govt.nz.

Income tax and GST implications

The receipt of units from an Industrial Allocation need to be accounted for in your financial records and have tax implications.

You can find out more about the tax implications of the ETS by visiting the Questions and Answers page on this website. 

Disclaimer: These web pages are intended to provide general information in summary form. The contents are not a substitute for getting your own advice on the provisions in the Climate Change Response Act 2002 or the Climate Change (Eligible Industrial Activities) Regulations 2010.

Last updated: 16 December 2011