Waste in the Emissions Trading Scheme

How is the waste sector affected by the ETS?

People who operate landfills have obligations to report their emissions and surrender New Zealand Units (NZUs) under the New Zealand Emissions Trading Scheme (ETS). They do not receive an allocation of NZUs.

Like all New Zealanders, landfill operators are likely to experience a very small increase in energy prices due to the ETS. For more information on these effects and how to reduce your energy costs, please see What does the ETS mean for me?

Obligations

Operators of landfills whose waste stream contains some element of household waste, and who are also covered by the Waste Disposal Levy, have obligations under the ETS. These obligations are for the methane emitted through the biodegradation of organic waste.

Emissions from wastewater treatment are not included in the scheme.

Any waste incinerators that generate electricity or industrial heat from the combustion process would be part of the energy sector.

The Climate Change (Emissions Trading and Other Matters) Amendment Act 2012

This Amendment Act was passed by Parliament in November 2012. It makes two changes that will affect the waste sector:

  • along with other mandatory participants, landfill operators will submit only one emission unit for each two tonnes of CO2-equivalent emissions;
  • the emission factors for methane will change to incorporate an updated Global Warming Potential for methane. This will be given effect by a further change to the regulations in 2013.

The regulations

Cabinet made policy decisions in September 2010 for the regulations that specify the ETS obligations for the waste sector, following consultation that took place in June–August 2010. The further decision to exempt small and remote landfills was made in October 2012.

The regulations can be found at the NZ Legislation website:

Read the Cabinet decision:

Emissions Trading Scheme: Regulations for Solid Waste Disposal Facilities

Read the Regulatory Impact Statement (NZ Treasury website).

Exemption for small and remote landfills
Small and remote landfills have now been granted an exemption from all surrender and reporting obligations under the ETS. The exemption is available for all landfills that have been in operation since before 1 January 2012 and either:

  1. dispose of less than 1000 tonnes of waste per year and are located at least 150 km away from the nearest modern landfill by land, or
  2. dispose of less than 500 tonnes of waste per year and are located at least 75 km away from the nearest modern landfill by land, or
  3. are located at least 25 km away from the mainland for offshore islands.

The exemption comes into force on 1 January 2013. Exempted landfills will not be required to report emissions or surrender emission units for the 2012 calendar year. It is expected to apply throughout the operational life of these existing landfills, but will not be available for new facilities. The updated regulations are available on the legislation website

Key dates

From 1 January 2011: Landfill operators were able to register as participants and could report their emissions voluntarily for 2011.

From 1 January 2012: All landfill operators were required to register and to collect necessary data in order to calculate and report their greenhouse gas emissions over the calendar year. Those who are not exempt will need to submit an emissions return for calendar year 2012 by 31 March 2013.

From 1 January 2013: Landfill operators who are not exempt will have obligations to collect data in order to calculate and report their greenhouse gas emissions over the calendar year, submit an emissions return by 31 March 2014, and surrender sufficient emission units by 31 May 2014.

Allocations

The waste sector does not receive an allocation of NZUs because landfill operators are not internationally trade exposed and are able to pass the costs of their ETS obligations on to their customers.

Guidance

A guide to landfill methane in the ETS is available below. Regulations for reporting landfill methane emissions under the ETS came into force from 1 January 2011. Voluntary reporting also started from that date.

A guide is available to help waste disposal facility (ie, landfill) operators as well as territorial local authorities and contractors meet their mandatory reporting and surrender obligations.

Last updated: 3 December 2012