Uncertain Future for Carbon Capturing
Ongoing changes to the NZ Emissions Trading Scheme (NZ ETS), are making preparedness tricky as the goal posts for emissions and carbon sequestration continually shift.
The Climate Change Commission (CCC) has published a report that advises the government on the auctioning of Carbon Credits from 2023 to 2027. Their proposals aim to increase the price of carbon while reducing the volume available at auction. This is an attempt to promote the reduction of emissions, rather than allowing emissions to remain the same and relying on compensation after the fact, and to keep units from being retained like an investment. This report provides suggestions to the Government, and whether the advice is followed is yet to be seen. If it is taken to account, it will have a large impact on the cost and availability of Carbon Credits.
Since this report was published, Ministers Stuart Nash and James Shaw have changed their stance on the Emission Trading Scheme regarding the exclusion of exotic forests. Permanent exotic forests will, according to Keith Woodford at Interest, “once again become eligible to enter the ETS.” The advice given by the CCC was issued prior to this change of position, which may change the applicability of some elements of the report.
The continuing attempts to manage New Zealand’s carbon emissions are going to be a rollercoaster for the Government, who must attempt to balance expert advice and the interests of many groups against what is economically viable. Rural Accountants will continue to keep an eye on the situation as it develops so that we will be in the best position to help you prepare.
You can read more about it here.
Please note this situation is ongoing and regularly changes, please check the date of this article.