Climate Change Response (Emissions Trading Reform) Amendment Bill

Hon James Shaw

Climate Change Response (Emissions Trading Reform) Amendment Bill

Government Bill

186—1

Contents

Explanatory note
1Title
2Commencement
3Principal Act
Part 1
Amendments to principal Act
Subpart 1—Amendments that commence on day after Royal assent
4Section 2A amended (Application of Schedules 3 and 4)
5Section 2B amended (Orders in Council in relation to Part 5 of Schedule 3)
6Section 2C amended (Effect of Orders in Council in relation to Part 5 of Schedule 3)
7Section 3 amended (Purpose)
8Section 3A amended (Treaty of Waitangi (Te Tiriti o Waitangi))
9Section 4 amended (Interpretation)
10New sections 4A and 4B inserted
4AGreenhouse gas definition may be amended to add gases
4BTransitional, savings, and related provisions
11Section 6 amended (Minister of Finance may direct Registrar regarding establishment of Crown holding accounts and carry out trading activities with respect to units)
12Section 6A amended (Minister’s power to sell by auction)
13Section 7 amended (Minister of Finance may give directions to Registrar regarding accounts and units)
14Section 9 amended (Minister of Finance may obtain information from inventory agency and Registrar)
15Section 10 replaced (Purpose of Registry)
10Purpose of Registry
16Section 13 amended (Registrar may refuse access to, or suspend operation of, Registry)
17Section 14 amended (Registrar must give effect to directions)
18Section 15 amended (Registrar to allocate unique numbers)
19Sections 16 and 17 repealed
20Section 18 amended (Form and content of unit register)
21Section 18B amended (Closing holding accounts)
22Section 18C amended (Transfer of units)
23Section 18CA amended (Effect of surrender, retirement, cancellation, and conversion)
24Sections 18CB, 18CC, and 18CD repealed
25Section 18D amended (Succession)
26Section 19 repealed (Retirement of Kyoto units by the Crown)
27Section 20 amended (Transactions must be registered)
28Section 21 repealed (Registration procedure for Kyoto units)
29Section 21AA amended (Registration procedure for New Zealand units and approved overseas units)
30Section 21A amended (Electronic registration)
31Section 21B amended (Defective applications)
32Section 23 repealed (Receiving Kyoto units from overseas registries)
33Section 23A amended (Receiving New Zealand units and approved overseas units from overseas registries)
34Section 24 amended (Priority of registration)
35Section 25 amended (Correction of unit register)
36Section 27 amended (Information accessible by search)
37Section 30A amended (The Crown or Registrar not liable in relation to searches in certain cases)
38Sections 30B to 30D and cross-heading repealed
39Section 30E repealed (Conversion of New Zealand units into designated assigned amount units for sale overseas or cancellation)
40Section 30G amended (Regulations relating to Part 2)
41Sections 30GA and 30GB replaced
30GARegulations for auctions to sell New Zealand units
30GBRegulations about overall limits and price control settings for units
30GCRequirements for regulations about overall limits and price control settings for units
30GDRegulations for auction monitor
30GESharing information with auction monitor
30GFObligation of confidentiality on auction monitor
30GGOffence for breach of auction monitor’s obligation of confidentiality
42Section 30H amended (Procedure for certain regulations relating to units)
43Section 30I amended (Incorporation by reference in regulations made under section 30G)
44New section 30IA inserted (Minister must obtain emission reductions to match reserve amounts of units released)
30IAMinister must obtain emission reductions to match reserve amounts of units released
45Section 30J amended (Signing false declaration with respect to regulations made under section 30G)
46New subparts 3 and 4 of Part 2 inserted
Subpart 3—Infringement offences
30LMeaning of infringement offence and infringement fee
30MRegulations about infringement offences
30NProcedure for regulations about infringement offences
30OProceedings for infringement offences
30PAppointment of enforcement officers
30QWhen infringement notice may be issued
30RInfringement notice may be revoked
30SWhat infringement notice must contain
30THow infringement notice may be served
30UPayment of infringement fees
30VReminder notices
Subpart 4—Regulations setting price of carbon
30WRegulations setting price of carbon
47Section 31 amended (Meaning of greenhouse gas)
48Section 32 amended (Primary functions of inventory agency)
49Section 35 amended (Publication)
50Section 36 amended (Authorisation of inspectors)
51Section 49 amended (Reporting)
52Section 50 amended (Regulations)
53Section 51 amended (Incorporation by reference in regulations made under section 50)
54Section 52 amended (Inventory agency must report to Minister on certain matters before certain regulations are made)
55Section 53 repealed (Consequential amendments)
56Section 54 amended (Participants)
57Section 55 amended (Associated persons)
58Section 56 amended (Registration as participant in respect of activities listed in Schedule 3)
59Section 57 amended (Applicant to be registered as participant in respect of activities listed in Schedule 4)
60Section 58 amended (Removal from register of participants in respect of activities listed in Schedule 4)
61Section 59 amended (Removal from register of participants in respect of activities listed in Schedules 3 and 4)
62New sections 59A and 59B inserted
59ARemoval from register for persistent non-compliance (standard forestry participants only)
59BRemoval from register if participant never carried out activity
63Section 60 amended (Exemptions in respect of activities listed in Schedule 3)
64New sections 60A and 60B inserted
60AExemption for participants in standard forestry or permanent forestry
60BIncorporation by reference in order made under section 60 or 60A
65Section 61 amended (Requirement to have holding account)
66Section 62 amended (Monitoring of emissions and removals)
67Section 63 amended (Liability to surrender units to cover emissions)
68Section 64 amended (Entitlement to receive New Zealand units for removal activities)
69Section 65 amended (Annual emissions returns)
70Section 67 amended (Retention of emissions records)
71Section 68 amended (Issuing New Zealand units)
72Section 69 repealed (Notification of intention regarding New Zealand units)
73Cross-heading above section 70 amended
74Sections 70 to 79 replaced
70Allocation plan issued
75Section 81 amended (Entitlement to provisional allocation for eligible industrial activities)
76Section 83 amended (Annual allocation adjustment)
77New sections 84A to 84D inserted
84ARegulations reducing general phase-out rate
84BRegulations increasing phase-out rate for specific activities
84CProcedure for regulations setting phase-out rates
84DClimate Change Commission to advise on regulations setting phase-out rates
78Section 85 amended (Allocation of New Zealand units in relation to agriculture)
79Section 85A amended (Temporary suspension of phase-out rates for assistance under sections 81, 83(2), and 85(2))
80Section 86B amended (Decisions on applications for allocations of New Zealand units to industry and agriculture)
81New section 86BA inserted (Transfer of allocated units, less any units that must be surrendered or repaid)
86BATransfer of allocated units, less any units that must be surrendered or repaid
82Section 86C amended (Reconsideration of allocation decisions)
83Section 86E amended (Minister or EPA or chief executive may require further information for purpose of carrying out functions under subpart)
84Section 87 amended (Functions of EPA)
85Section 88 amended (Directions to EPA)
86Section 89 amended (EPA to publish certain information)
87New section 89A inserted (EPA to publish participant data on emissions and removals)
89AEPA to publish participant data on emissions and removals
88Section 90 amended (EPA may prescribe form of certain documents)
89Section 91 amended (Approval of unique emissions factors)
90New section 91A inserted (Correction of unique emissions factors)
91ACorrection of unique emissions factors
91Section 92 amended (Recognition of verifiers)
92Section 93 amended (Appointment of enforcement officers)
93Section 94 amended (Power to require information)
94Section 95 amended (Power to inquire)
95Section 96 amended (Inquiry before District Court Judge)
96Section 99 amended (Obligation to maintain confidentiality)
97Section 100 amended (Power of entry for investigation)
98Section 104 amended (Information obtained under section 100 or 101 only admissible in proceedings for alleged breach of obligations imposed under this Part and Part 5)
99Section 107 amended (Applications for emissions rulings)
100New section 107A inserted (Insufficient information provided for ruling on entire application)
107AInsufficient information provided for ruling on entire application
101Section 108 amended (Matters in relation to which EPA may decline to make emissions rulings)
102Section 109 amended (Making of emissions rulings)
103Section 116 amended (Effect of emissions rulings)
104Section 117 amended (EPA may publish certain aspects of emissions rulings)
105Section 118 amended (Submission of final emissions returns)
106Section 120 amended (Amendment to emissions returns by EPA)
107Section 123 amended (Effect of amendment or assessment)
108Section 124 amended (Reimbursement of units by EPA)
109Section 125 replaced (Repayment of units by persons in case of error)
125Repayment of units by persons in case of error
110Section 127 amended (Time bar for amendment of emissions returns)
111New sections 128A and 128B and cross-heading inserted
Notices required from participants
128AEPA may act if participant fails to give notice
128BEffects of EPA acting after participant fails to give notice
112Section 129 amended (Offences in relation to failure to comply with various provisions)
113Section 132 amended (Other offences)
114Section 133 amended (Evasion or similar offences)
115Sections 134 to 136 replaced
134Penalty for failing to surrender or repay units by due date
134APenalty for failing to submit emissions return by due date
134BPenalty for failing to submit annual or closing allocation adjustment by due date
134CPenalty for submitting incorrect emissions return
134DPenalty for providing incorrect information in allocation application or adjustment
135Due dates for payment of penalties
135ADeferred payment arrangements for payments of penalties
136Penalties are debt due to Crown
116Section 137 amended (Interest for late payment)
117Section 138 amended (Obligation to pay penalty not suspended by appeal)
118Section 138A replaced (Penalties to be paid into Crown account)
138APenalties to be paid into Crown account
119Section 143 amended (Evidence in proceedings)
120Section 144 amended (Request for review of decisions)
121Section 148 amended (Giving of notices to EPA)
122Section 150 amended (Formation of consolidated group)
123Section 151 amended (Changes to consolidated groups)
124Section 151A amended (Addition of activities to consolidated groups)
125Section 152 amended (Nominated entities)
126Section 153 amended (Effect of being member of consolidated group)
127Section 154 repealed (Emissions returns by consolidated group in respect of activities in Part 1 of Schedule 4)
128Section 155 amended (Ceasing to be member of consolidated group)
129Section 156 replaced (Effect of ceasing to be member of consolidated group)
156Effect of ceasing to be member of consolidated group
130Section 156A amended (Removal of activities from consolidated groups)
131Section 157 amended (Unincorporated bodies)
132Section 159 amended (Recovery of costs)
133Section 160 amended (Review of operation of emissions trading scheme)
134Section 161 amended (Appointment and conduct of review panel)
135Section 161A amended (Regulations in relation to eligible industrial activities)
136Section 161B repealed (Australian eligible industrial activities)
137Section 161C amended (Other eligible industrial activities)
138Section 161D amended (Power to require information for purposes of allocation to industry)
139Section 161E amended (Requirements in respect of notice given under section 161D)
140Section 161F amended (Consultation on activities that may be prescribed as eligible industrial activities)
141Section 163 amended (Regulations relating to methodologies and verifiers)
142Section 166 amended (Procedure for regulations relating to methodologies, verification, unique emissions factors, and offsetting)
143Section 167 amended (Regulations relating to fees and charges)
144Section 168 amended (Other regulations)
145Section 169 amended (Incorporation by reference in regulations made under section 163, 164, 167, or 168)
146Section 170 replaced (Effect of amendments to, or replacement of, material incorporated by reference in regulations)
170Effect of amendments to, or replacement of, material incorporated by reference in regulations
147Section 172 replaced (Effect of expiry of material incorporated by reference)
172Effect of expiry of material incorporated by reference
148Section 173 amended (Requirement to consult)
149Section 174 amended (Public access to material incorporated by reference)
150Section 175 amended (Application of Legislation Act 2012 to material incorporated by reference)
151Section 178A amended (Option to pay money instead of surrendering units to cover emissions)
152Section 178B amended (Issuing New Zealand units to meet surrender obligations)
153Section 178C repealed (Prohibition on ability to export New Zealand units)
154Part 5 divided into Parts 5 to 5D and new Part 5 divided into subparts
155Section 179 amended (Forest land to be treated as deforested in certain cases)
156Section 179A amended (Forest land may not be treated as deforested in certain cases)
157Section 181 amended (When deforestation to be treated as occurring in respect of pre-1990 forest land)
158Section 183 amended (Applications for exemption for land holdings of less than 50 hectares of pre-1990 forest land)
159Section 183A amended (Certain applications not otherwise permitted by section 183)
160New section 183B inserted (Applications for exemption for some Maori land or land with 10 or more owners)
183BApplications for exemption for some Maori land or land with 10 or more owners
161Section 184 amended (Exemptions for deforestation of land with tree weeds)
162New section 185A inserted (Regulations about exemptions for deforestation of land with tree weeds)
185ARegulations about exemptions for deforestation of land with tree weeds
163Section 186 amended (Methodology for pre-1990 forest land cleared in 8 years or less)
164Section 186B amended (Criteria for approving offsetting forest land applications)
165Section 186C amended (Conditions applicable to offsetting forest land)
166New section 186CA inserted (Variation to approved offsetting forest land application)
186CAVariation to approved offsetting forest land application
167Section 186D amended (Requirements relating to offsetting forest land)
168Section 186F amended (Regulations relating to offsetting)
169Section 186H amended (Treatment of allocations in respect of pre-1990 forest land that is offset)
170Section 186J amended (Methodology for pre-1990 offsetting forest land cleared after usual rotation period is completed)
171New section 186K inserted (Standard and permanent forestry on post-1989 forest land)
186KStandard and permanent forestry on post-1989 forest land
172Section 187 amended (Conditions on registration as participant in respect of certain activities relating to post-1989 forest land)
173Section 188 amended (Registration as participant in respect of post-1989 forest land)
174Sections 188A to 191 replaced
188AARemoving registration as participant in standard or permanent forestry
188ABRemoving registration as participant in standard or permanent forestry in certain natural events or clearance for forest management
188ACNotice to forestry participant if their registration added or removed
188ADNotice to interested party if forestry participant’s registration added or removed
Provisional and final forestry emissions returns
189AAProvisional forestry emissions return in any year
189ABFinal forestry emissions return at end of mandatory emissions return period
189BAPreparing provisional or final forestry emissions return
Calculations for provisional and final forestry emissions returns
189CAGross liability or entitlement for each CAA1 in emissions return
189CBNet liability or entitlement for each CAA1 in final forestry emissions return
189CCUnit balance calculation for each CAA1 in emissions return
189CDTotal liability or entitlement for all CAA1s in emissions return
Total liability or entitlement and unit balance has effect for all emissions returns
189DATotal liability or entitlement has effect, and unit balance updated, when emissions return submitted
New unit balance report for certain applications or notices
189EANew unit balance report
Maximum liability is unit balance of carbon accounting area
190Maximum liability is unit balance of carbon accounting area
Ceasing participation in standard or permanent forestry
191AACeasing participation for whole carbon accounting areas
191ABEffect of ceasing participation for whole carbon accounting areas
191BACeasing participation for part carbon accounting areas
191BBEffect of ceasing participation for part carbon accounting areas
191CAIf participant has never carried out activity in carbon accounting area
Transmission of interest relating to standard or permanent forestry
175Section 192 amended (Effect of transmission of interest in post-1989 forest land)
176Section 193 replaced (Effect of transmission of interest in post-1989 forest land)
193Effect of transmission of interest in post-1989 forest land
177New cross-heading above section 194 inserted
Information about status of forest land
178New sections 194AA to 194EL and cross-headings inserted
Non-compliance for transmitted interests
194AAEPA may act if persons fail to give notice of transmitted interest
Application to reconfigure carbon accounting areas for standard or permanent forestry
194CAApplication to reconfigure carbon accounting areas for standard or permanent forestry
194CBCriteria to reconfigure carbon accounting areas for standard or permanent forestry
194CCApproval of application to reconfigure carbon accounting areas for standard or permanent forestry
194CDRestriction start date of reconfigured carbon accounting area for permanent forestry
Application to change activity on post-1989 forest land
194DAApplication to change activity on post-1989 forest land
194DBCriteria to change activity on post-1989 forest land
194DCApproval of application to change activity on post-1989 forest land
194DDEmissions return for application to change from PFSI activity
194DENew unit balance report for application to change from PFSI activity
194DFLiability to surrender units on transfer from permanent forestry to standard forestry in carbon accounting area (averaging)
194DGLiability to surrender units on transfer from standard forestry in carbon accounting area (averaging) to permanent forestry
Restrictions for permanent forestry land
194EAPermanent forestry period for land
194EBRestriction on ceasing to be registered for permanent forestry
194ECMinister may approve removal of land from permanent forestry
194EDException from prohibition on clear-felling and deforestation
194EEPermanent forestry land must not be clear-felled
194EFPecuniary penalty for clear-felling of permanent forestry land
194EGRegulations for pecuniary penalty for clear-felling
194EHPermanent forestry land must not be deforested
194EIPecuniary penalty for deforestation of permanent forestry land
194EJDue dates for payment of penalties and recovery of EPA’s costs
194EKOption must be chosen at end of permanent forestry period
194ELRemoval of carbon accounting area from permanent forestry
179New subparts 5 and 6 of Part 5 inserted
Subpart 5—Averaging accounting methodology
General provisions
194FAInterpretation for subpart 5
194FBAveraging accounting methodology
194FCAveraging accounting applies to carbon accounting areas (averaging)
194FDFirst rotation forest and subsequent rotation forest
Carbon equivalent forest land swaps: applications
194GAApplication for carbon equivalent forest land swap
194GBCriteria for carbon equivalent forest land swap
194GCEffect of approval of application to swap land
Carbon equivalent forest land swaps: approved swap land
194HADuration of approved swap land status
194HBEffect of being approved swap land
194HCSubsequent rotation forest
194HDReconfiguration restrictions
194HENo transfers to permanent forestry
Carbon equivalent forest land swaps: release of approved swap land
194JARelease criteria
194JBNotice of compliance with release criteria
194JCLiability to surrender units if release criteria not met
194JDMaximum liability and apportionment
194JERelease date unit balance report
194JFEffect on release date
Carbon equivalent forest land swaps: action if original criteria not met
194KAEPA may take action if original criteria not met
194KBEffect of declaration after release date
194KCRemedial action: land substitution
194KDCriteria for land substitution
194KEEffect of land substitution
Regulations
194LARegulations for averaging
Subpart 6—Temporary adverse events
194MAInterpretation for subpart 6
Application
194NAApplication for temporary adverse event suspension
194NBCriteria of temporary adverse event suspension
194NCApproval of temporary adverse event suspension
Temporary adverse event land
194PADuration of temporary adverse event land status
194PBEffect of being temporary adverse event land
194PCNo liability or entitlement
194PDFirst rotation forest
194PEReconfiguration restrictions
194PFDamage to land turns out to be permanent
Re-establishment
194QARe-establishment criteria
194QBNotice of achievement of re-establishment
194QCEffect on re-establishment date
Carbon recovery
194RACarbon recovery criteria
194RBNotice when land achieves carbon recovery
Ceasing to be temporary adverse event land before recovery
194SACancellation for breach of conditions
194SBOther circumstances causing land to cease to be temporary adverse event land
194SCConsequences if land ceases to be temporary adverse event land
Regulations
194TARegulations for temporary adverse events
180New sections 194UA to 194UC and cross-headings inserted
Input returns before actual emissions returns
194UAInput returns may be submitted for certain emissions returns for forestry activities
194UBEPA may do calculations based on input return
194UCRegulations for input returns
Notification of status of forest land
181Section 195 amended (Notification of status of forest land)
182Sections 196 and 197 and cross-heading replaced
Forestry classifications of land
196AMeaning of forestry classification
196BEPA may give forestry classifications to areas of land
196CEffect of forestry classifications
196DChange of forestry classification to correct error
196EChange of forestry classification to update for changes
196FForestry classification with effect before date classification given
196GRegulations for forestry classifications
Grant-funded forests
197Entitlement to units for removals from grant-funded forests
197ARegulations for grant-funded forests
183Section 198 amended (Registration as participant by purchasers of obligation fuel)
184Section 202 amended (Activities added to Part 2 of Schedule 3)
185Section 209 amended (Registration as participant by purchasers of coal or natural gas)
186New section 211A inserted (Effect of stockpiling coal by coal importer or miner)
211AEffect of stockpiling coal by coal importer or miner
187Section 217 amended (Transitional provision for penalties)
188Section 218 amended (Transitional provision for voluntary reporting)
189Section 219 amended (Transitional provision for mandatory reporting by certain participants)
190Sections 220 to 222 repealed
191Section 222H amended (Transitional provision for unincorporated bodies)
192Section 233 amended (Rate of synthetic greenhouse gas levy)
193Sections 234 and 236 repealed
194Section 243 amended (Circumstances where levy may be refunded)
195Section 246 amended (Regulations relating to synthetic greenhouse gas levy)
196Section 247 amended (Process for making orders and regulations)
197Section 249 amended (Application of section 88 (Directions to EPA))
198Section 252 amended (Enforcement officers)
199Section 257 amended (Power of entry for investigation, warrants, etc)
200Section 258 amended (Regulations relating to verifiers)
201Section 270 amended (Appointment and conduct of independent panel)
202New Schedule 1AA inserted
203New Schedule 2A inserted
204Schedule 3 amended
205Schedule 4 amended
Subpart 2—Amendments that commence on 30 November 2020
206Section 30G amended (Regulations relating to Part 2)
207Section 183A amended (Certain applications not otherwise permitted by section 183)
208Section 186B amended (Criteria for approving offsetting forest land applications)
209Section 186H amended (Treatment of allocations in respect of pre-1990 forest land that is offset)
210Section 189DA amended (Total liability or entitlement has effect, and unit balance updated, when emissions return submitted)
211Section 191AB amended (Effect of ceasing participation for whole carbon accounting areas)
212Section 191BB amended (Effect of ceasing participation for part carbon accounting areas)
213Section 194AA amended (EPA may act if persons fail to give notice of transmitted interest)
214Section 194DF amended (Liability to surrender units on transfer from permanent forestry to standard forestry in carbon accounting area (averaging))
215Section 194DG amended (Liability to surrender units on transfer from standard forestry in carbon accounting area (averaging) to permanent forestry)
216Section 194EL amended (Removal of carbon accounting area from permanent forestry)
217Section 194FC amended (Averaging accounting applies to carbon accounting areas (averaging))
218Section 194GC amended (Effect of approval of application to swap land)
219Section 194JC amended (Liability to surrender units if release criteria not met)
220Section 194KB amended (Effect of declaration after release date)
221Section 194KE amended (Effect of land substitution)
222Schedule 1AA amended
Subpart 3—Amendment that commences on 31 December 2020
223Section 89 amended (EPA to publish certain information)
Subpart 4—Amendments that commence by Order in Council or on 1 January 2023
224Section 2A amended (Application of Schedules 3 and 4)
225Section 27 amended (Information accessible by search)
226Section 89 amended (EPA to publish certain information)
227Sections 178A and 178B repealed
228Section 233 amended (Rate of synthetic greenhouse gas levy)
229Schedule 1AA amended
Part 2
Consequential amendments to other enactments
Subpart 1—Consequential amendments that commence on day after Royal assent
230Climate Change (Fishing Allocation Plan) Order 2010 revoked
231Consequential amendments
Subpart 2—Consequential amendments that commence on 30 November 2020
232Consequential amendments
Subpart 3—Consequential amendments that commence on 1 January 2021
233Consequential amendments
Subpart 4—Consequential amendments that commence on 1 January 2022
234Consequential amendments
Schedule 1
New Schedule 1AA inserted
Schedule 2
New Schedule 2A inserted
Schedule 3
Consequential amendments that commence on day after Royal assent
Schedule 4
Consequential amendments that commence on 30 November 2020
Schedule 5
Consequential amendments that commence on 1 January 2021
Schedule 6
Consequential amendments that commence on 1 January 2022
Schedule 7
New Schedule 1AA inserted in Forests Act 1949

The Parliament of New Zealand enacts as follows: