Climate Change Response Amendment Bill
Climate Change Response Amendment Bill
Climate Change Response Amendment Bill
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Climate Change Response Amendment Bill
Government Bill
334—1
Explanatory note
General policy statement
The objective of the Climate Change Response Amendment Bill (the Bill) is to improve the efficiency and effectiveness of the Climate Change Response Act 2002 (the CCRA). The Bill does this by introducing targeted policy changes to climate adaptation planning, market governance of the New Zealand Emissions Trading Scheme (the NZ ETS) market, industrial allocation, and carbon removal activities.
The Bill also streamlines some processes and obligations to reduce duplication and support the CCRA’s efficient operation, reduces complexity, and gives forestry participants in the NZ ETS greater flexibility.
The Bill—
requires local government to undertake adaptation planning in priority locations to minimise climate adaptation costs by supporting central and local government and the private sector to invest early and appropriately:
introduces new reporting and market conduct requirements for the NZ ETS market to improve market transparency and integrity and support market confidence:
amends requirements related to emissions reduction plans (ERPs), national adaptation plans, and consultation:
amends the timing and sequencing of the Climate Change Commission’s (the Commission’s) reports and advice, and the Minister’s decision-making and responses to support co-ordinated decision-making:
creates a general power for the Minister to add mandatory activities to the NZ ETS by Orders in Council (excluding agricultural activities) to provide a more efficient and responsive mechanism to keep NZ ETS coverage aligned as closely as practicable with new sources of emissions as they emerge:
changes the annual NZ ETS unit limits and price control settings process to a biennial process, to support market stability and administrative efficiency:
amends industrial allocation settings to reduce unintended disincentives for investment in emissions reductions and provide greater certainty for firms that receive industrial allocation:
expands opportunities for additional carbon removal activities to be recognised and rewarded in the NZ ETS in future:
reduces complexity for forestry participants and provide greater regulatory flexibility for managing forest participant deadlines following significant disruptions, such as a cyclone:
makes minor and technical changes to support the operation of the NZ ETS.
Responsibilities of local government to prepare adaptation plans in priority locations
New Zealand’s increasing exposure to climate-driven natural hazards presents significant risks to communities, infrastructure, and the economy.
The Bill clarifies requirements for local authorities to prepare adaptation plans for priority locations. Regional spatial planning decision makers will identify locations that require an adaptation plan when developing a spatial plan under the Planning Act 2025. Those plans must set out the risks, how they will be managed, and who will be expected to pay. Additional content requirements for adaptation plans will be prescribed in regulations.
Those legislative requirements are intended to support the strategic co-ordination of adaptation actions and investments, communicate risk management approaches, and support consistent, transparent, and accountable adaptation planning. Embedding those requirements in primary legislation is intended to minimise long-term costs to society, support informed decision-making, and build resilience across New Zealand’s communities.
Market governance of NZ ETS market
The NZ ETS is the Government’s main tool to reduce net greenhouse gas emissions and requires participants to surrender 1 New Zealand unit for each tonne of emissions they emit. A core component of the NZ ETS is the trading of units on the secondary market. Units are bought and sold between participants who need units to meet their surrender obligations (such as large emitters) and others who participate voluntarily, including investors and those who on-sell units allocated by the government (such as foresters). Together, NZ ETS participants and other people who trade units or unit products are referred to as unit market participants.
The Bill introduces market governance provisions that set clear reporting and market conduct obligations for unit market participants. Those provisions will improve market operations and efficiency by increasing the transparency of trading information, supporting informed trading decisions, and enabling market monitoring to improve market integrity.
The Bill will—
require unit product markets to report trading information to the government:
require unit market participants to record trading information in the New Zealand Emissions Trading Register:
enable the market monitor to request and assess information from unit market participants, including unit product markets:
prohibit price manipulation of units and false, unsubstantiated, or misleading conduct in relation to buying, holding, or selling units.
The Bill also establishes a penalty regime that sets out the consequences for breaching the market governance provisions.
Efficiency of climate policy
One of the purposes of the CCRA is to provide a framework for developing clear and stable climate change policies that contribute to the global effort under the Paris Agreement to limit the global average temperature and efforts to help New Zealand to prepare for and adapt to the effects of climate change. The Bill amends the purpose of the CCRA to include references to efficient and effective policies.
The Bill streamlines and amends requirements to provide better value for money and support climate action, including by—
improving the timing and sequencing of the Commission’s advice and reports and the Government’s decisions and responses:
making it easier to amend an emission reduction plan and a national adaptation plan to keep them current:
simplifying content requirements for ERPs and removing the requirement for the Commission to provide separate advice on the direction of policy for ERPs:
simplifying consultation requirements to reduce duplication and provide greater clarity:
requiring biennial NZ ETS unit limits and price control settings reviews instead of annual reviews.
Industrial allocation
Industrial allocation is the system where the government provides units to eligible emissions-intensive and trade-exposed firms. The Bill provides a declining level of assistance to those firms over time, encouraging them to reduce their emissions costs while remaining commercially viable. Allocations are based on a firm’s production, an industry allocative baseline, and a level of assistance, which is being phased out.
The Bill removes the Minister’s ability to perform reviews of allocative baselines and eligibility. The Bill also adjusts the matters to be considered in phase-out reviews. Those changes are intended to improve incentives to invest in initiatives to reduce emissions intensity. Under the current settings, those investments can reduce a firm’s future industrial allocation entitlement, which in turn lowers the expected return on investment. Those changes will help ensure significant emissions reduction opportunities are not missed. The changes will also simplify the scheme’s administration.
Carbon removal activities
Incentivising activities that remove carbon from the atmosphere is an important part of the Government’s climate change strategy and provides businesses with more options to reduce the impact of their emissions. Currently, forestry is the main removals activity that is recognised and rewarded in the NZ ETS. Other forms of removal activities are not currently recognised or rewarded under the NZ ETS.
The Bill adds carbon removal activities to the CCRA. This change will not enable new activities to be immediately recognised and rewarded. Instead, it creates an enabling category so that, in future, decisions to recognise specific carbon removal activities can move straight to assessment and activity-specific regulations (by Order in Council and including consultation, but without further primary legislation).
Improvements to administration of forestry in NZ ETS and other technical amendments
Forestry is the main emissions removal activity currently recognised and rewarded in the NZ ETS. Over time, operational issues have arisen and opportunities have been identified to improve the way that forestry is administered in the NZ ETS, alongside wider changes to support compliance and consistency across all NZ ETS participants.
The Bill makes changes to increase flexibility for all NZ ETS participants to meet deadlines following a significant disruption (such as a national or local state of emergency). The Bill also improves forestry administration in the NZ ETS and makes technical amendments to some penalty provisions.
Other changes to improve effectiveness of NZ ETS
The Bill makes other minor and technical changes to improve the effectiveness of the NZ ETS, such as making the importing of carbon dioxide a mandatory activity covered under the NZ ETS so that it is covered by the scheme and subject to its obligations. This ensures that imported carbon dioxide is treated consistently with carbon dioxide produced domestically.
Regulatory impact statements
The Ministry for the Environment (MFE) and the Ministry for Primary Industries (MPI) produced the following regulatory impact statements to help inform the main policy decisions taken by the Government relating to the contents of this Bill:
Local Adaptation Planning (MFE, published 13 November 2025):
Improvements to the administration of the Emissions Trading Scheme through amendments to the Climate Change Response Act 2002 (MPI, published 21 November 2025):
Reducing investment uncertainty and disincentives to decarbonise created by industrial allocation (MFE, published 4 December 2025):
Importing CO2 as new Mandatory Activity in the New Zealand Emissions Trading Scheme (MFE, published 10 December 2025):
Adjusting the penalty calculation for incorrect emissions returns through amendments to the Climate Change Response Act 2002 (MPI, published 11 December 2025):
New Zealand Emissions Trading Scheme market governance (MFE, published 22 May 2026):
Supplementary Analysis Report: NZ ETS Settings Review Frequency (MFE, published 10 June 2026):
Adding emitting activities to the New Zealand Emissions Trading Scheme (MFE, published 1 July 2026).
Copies of the regulatory impact statements can be found at https://www.regulation.govt.nz/our-work/regulatory-impact-statements/
Consistency accountability statement
The Ministry for the Environment is required to prepare a consistency accountability statement and a supporting summary of underpinning analysis. These documents review the contents of this Bill for consistency with the principles of responsible regulation under the Regulatory Standards Act 2025.
Copies of the consistency accountability statement and summary of underpinning analysis can be found at—
Clause by clause analysis
Clause 1 is the Title clause.
Clause 2 provides that the Bill comes into force on the day after it receives the Royal assent.
Clause 3 provides that the Bill amends the Climate Change Response Act 2002 (the Act).
Part 1Amendments to principal Act
Subpart 1—Amendments to Part 1
Clause 4 amends section 2A to provide that new subpart 3 of Part 3 of Schedule 3 and new Part 5 of Schedule 4 apply on and after a date set by Order in Council.
Clause 5 amends section 3 to provide that the purpose of the Act is to provide a framework to develop climate change policies that are efficient and effective as well as being clear and stable.
Clause 6 amends section 3A(b), which provides an obligation to consult representatives of iwi and Māori with an interest in the secondary legislation referred to in that section, as a consequence of the amendments made by clauses 4, 69, and 70.
Clause 7 amends section 3B, which provides an obligation to consult persons substantially affected by regulations, as a consequence of the amendments made by clauses 4, 69, and 70.
Clause 8 amends section 4 to insert new definitions of methodological improvement, New Zealand unit market, PFSI land, unit derivative product, unit market participant, unit product, unit product trading transaction, and unit product market. It also amends the definitions of emissions trading scheme, post-1989 forest land, pre-1990 forest land, and removal activity.
Clause 9 inserts new section 4AAB, which defines unit product market as a facility that facilitates the exchange of unit products between buyers and sellers on secondary markets. The term does not include transactions that occur bilaterally and off-screen, or transactions in which prices and volumes are not discoverable by multiple participants or are not shared with multiple participants simultaneously.
Subpart 2—Amendments to Part 1A
Clause 10 amends section 5D(1)(c) to reduce the maximum number of members of the Climate Change Commission (the Commission) (other than the Chairperson and Deputy Chairperson) from 7 to 5.
Clause 11 repeals section 5J(e), which removes the Commission’s function of providing advice to the Minister to enable the preparation of an emissions reduction plan.
Clause 12 amends section 5O(2) to enable the Minister to direct the Commission to have regard to Government policy when recommending limits and price control settings.
Clause 13 amends section 5P to allow the Commission to disclose information if the information is statistical information and no person is identifiable from its disclosure.
Subpart 3—Amendments to Part 1B
Clause 14 amends section 5S(1) to require the Commission to review the 2050 target in the first calendar year of each emission budget period specified in section 5X (the 2050 target review years). Section 5S(2) is amended to require the Commission to advise the Minister in writing of the outcome of any review by 31 December of the 2050 target review years, rather than at the same time as giving advice to the Minister on setting an emissions budget.
Clause 15 amends section 5U to remove the requirement that the Minister advise the Commission in writing of the Minister’s response to a recommendation from the Commission to amend the 2050 target. The amendment retains the requirement to make the Government’s response publicly available and to present it to the House of Representatives.
Clause 16 amends section 5W to remove from the purpose of setting emissions budgets the purpose of contributing to the global effort under the Paris Agreement to limit the global average temperature increase to 1.5° Celsius above pre-industrial levels. The purpose of meeting the 2050 target is retained.
Clause 17 amends section 5X to change the dates on which emissions budgets must be set by 1 year.
Clause 18 repeals section 5ZA(3) to remove the requirement for the Commission to publicly consult on the advice it proposes to provide to the Minister on an emissions budget.
Clause 19 amends section 5ZB as a consequence of the amendment made by clause 18.
Clause 20 amends section 5ZC as a consequence of the amendments made by clauses 5 and 18.
Clause 21 amends section 5ZE to allow the Minister to revise an emissions budget if there have been methodological improvements, as defined by the amendment made by clause 8.
Clause 22 replaces section 5ZG(3) to replace the requirement for an emissions reduction plan to include specified policies and strategies (other than a strategy to mitigate the impacts that reducing emissions and increasing removals will have on iwi and Māori, which is retained) with a requirement to include any policies and strategies that the Minister considers necessary for the purposes of the Act.
Clause 23 repeals section 5ZH, which requires the Commission to advise the Minister on emissions reduction plans.
Clause 24 replaces section 5ZI(1) as a consequence of the repeal of section 5ZH. It also removes the requirement for an emissions reduction plan to be published and presented to the House of Representatives 12 months before the commencement of the budget period. As amended, the emissions reduction plan may be published and presented to the House of Representatives at any time before the commencement of the budget period. Section 5ZI(3) is replaced to clarify the process for amending an emissions reduction plan and to expand the Minister’s ability to amend a plan without repeating the process for preparing it, subject to the safeguards specified in new subsection (3)(b).
Clause 25 replaces section 5ZK. The new section 5ZK sets out updated requirements for the Commission to prepare an annual report on monitoring progress towards meeting emissions budgets. The new section includes provision for requirements to be prescribed by regulations, a change to the date by which the annual report must be provided to the Minister (30 April of each year), a change to the date by which the report must be presented to the House of Representatives and made publicly available (31 December of each year), and greater specificity regarding the amendments that the Minister must note when presenting the report and making it publicly available.
Clause 26 amends section 5ZL to provide for regulations to prescribe any requirements that the Commission must take into account in preparing a report on the progress made in an emissions budget period towards meeting the emissions budget for that period. Section 5ZL is also amended to extend the time frame for the Minister to present a response to the Commission’s report from 3 months to 6 months.
Clause 27 inserts new section 5ZLA, which provides for the chief executive responsible for the administration of the Act (the chief executive) to provide guidelines for producing projections of greenhouse gas emissions.
Clause 28 amends section 5ZOA to specify the time by which the Commission must make recommendations to the Minister about limits and price control settings relating to regulations made under section 30GB. The recommendations must be made by 30 April of each year in which the Minister is required to recommend the making of the regulations.
Subpart 4—Amendments to Part 1C
Clause 29 amends section 5ZT to provide that the Minister may amend a national adaptation plan in addition to making minor or technical changes.
Clause 30 amends section 5ZU to require the Commission to provide the Minister with a progress report on the implementation of each adaptation plan and its effectiveness 2 years after the adaptation plan is made publicly available. Section 5ZU(3) is repealed.
Clause 31 amends section 5ZV to require the Minister to make a written response to a progress report under section 5ZU publicly available rather than for the Minister to respond in writing to the progress report.
Clause 32 inserts new sections 5ZY to 5ZZI into Part 1C, which set out requirements for territorial authorities for the preparation, adoption, amendment, and review of adaptation plans. The new sections also provide for the approval of certain existing plans as adaptation plans and for the making of regulations that prescribe matters relating to adaptation plans.
Subpart 5—Amendments to Part 2
Clause 33 amends section 9A by inserting a new function for the chief executive. The chief executive is the New Zealand unit market monitor for the purposes of new subpart 2A of Part 4.
Clause 34 inserts new section 20(1A), which requires all transactions not covered by subsection (1) to be registered on the unit register if regulations require registration.
Clause 35 amends section 30G to provide for regulations that prescribe requirements relating to information about unit product transactions that are registered on the unit register. Section 30G is also amended to provide for the registration of the transactions described in new section 20(1A). A new section 30G(4A) is inserted setting out the jurisdictional application of regulations made under section 30G(1).
Clause 36 inserts new section 30GB(2A), which provides that the Minister may recommend the making of regulations prescribing specified limits and price control settings for New Zealand units only every second year. Section 30GB(4) and (5) is amended as a consequence of new section 30GB(2A).
Clause 37 makes a technical amendment to section 30GC.
Clause 38 amends section 30H so that the commencement provisions in subsection (3) do not apply to regulations made under section 30GB.
Clause 39 amends section 30M to enable regulations to prescribe infringement offences for non-compliance by unit market participants with their obligations under regulations made under new section 30G(1)(aa).
Clause 40 amends section 30P to enable the chief executive to appoint enforcement officers for the purpose of enforcing infringement offences under regulations provided for in clause 39.
Clause 41 inserts new section 30VA, which enables the chief executive to publish details of non-compliance with register reporting requirements by unit market participants.
Clause 42 inserts new subpart 5 of Part 2, which contains new section 30X. The new section enables the making of regulations that set the Commission’s approach to methodological improvements in relation to emissions budgets.
Subpart 6—Amendments to Part 3
Clause 43 replaces section 35, which requires the inventory agency to publish New Zealand’s annual inventory report, national inventory report, and national communication (or periodic report), with a section that specifies the international instruments that give rise to the relevant obligations.
Subpart 7—Amendments to Part 4
Clause 44 amends section 57 to require the Environmental Protection Authority (the EPA) to decide an application to be registered as a participant in respect of the activities listed in new Part 5 of Schedule 4 (inserted by clause 112) within 20 working days.
Clause 45 amends section 63(5) to remove a redundant paragraph relating to PFSI activity.
Clause 46 amends section 65(1) to provide for a participant in respect of the activities listed in new Part 5 of Schedule 4 to submit an annual emissions return to the EPA.
Clause 47 amends section 66 to provide for a participant in respect of the activities listed in new Part 5 of Schedule 4 to submit quarterly returns for removal activities.
Clause 48 amends section 84B to enable regulations to set an increased phase-out rate to be used for any emissions budget period if, with some exceptions, it has been 5 years or more since regulations were last made.
Clause 49 amends section 84C to require that, before recommending the making of regulations setting phase-out rates, the Minister consider any reductions in emissions or emissions intensity achieved in respect of the eligible industrial activity by investments made by an eligible person carrying out the activity, including any capital and operating expenditure related to those investments.
Clause 50 amends section 86B to prevent a decision being made on an application for an allocation of New Zealand units to industry if—
the Minister has issued a notice under section 161D(1)(e) to the applicant in the previous year; and
regulations under section 161A(1)(c)(ii) amending an allocative baseline for the applicant following the notice have not commenced.
Clause 51 inserts into Part 4 new subparts 2A to 2C, comprising new sections 86G to 86ZF.
New subpart 2A contains provisions relating to unit product markets and unit market participants.
New section 86G defines FMA (the Financial Markets Authority) and monitoring.
New section 86H states the purpose of the reporting requirements in new sections 86I and 86J.
New section 86I requires a unit product market to report daily on the unit product trading transactions conducted by them.
New section 86J requires unit product markets to maintain a history of their trading information over a period of 7 years.
New section 86K requires non-ETS participants that are unit market participants to have a holding account if they are not required by section 61 to have a holding account and have transactions that regulations made under section 30G require to be reported.
New Subpart 2B (new sections 86L to 86V) contains provisions about FMA enforcement, penalties, and orders.
New section 86L provides that the terms and expressions that are used in this subpart and not defined in the Act, but are defined in the Financial Markets Authority Act 2011 or the Financial Markets Conduct Act 2013, have the same meaning as in that other Act, unless the context otherwise requires.
New section 86M applies Part 2 of the Financial Markets Conduct Act 2013 (which provides for fair dealing in relation to financial products and financial services, and prohibits misleading or deceptive conduct, false or misleading representations, and unsubstantiated representations) to unit market participants.
New section 86N prohibits unit market participants from making statements or disseminating information that is false or misleading.
New section 86O creates an offence of contravening new section 86N, which largely mirrors section 264 of the Financial Markets Conduct Act 2013.
New section 86P prohibits unit market participants from engaging in conduct that has the effect of creating a false or misleading appearance of trading, which largely mirrors section 265 of the Financial Markets Conduct Act 2013.
New section 86Q specifies which persons must be treated as contravening new section 86P.
New section 86R creates an offence of contravening new section 86P, which largely mirrors section 269 of the Financial Markets Conduct Act 2013.
New section 86S provides a defence that applies to offences against new section 86P, which largely mirrors section 268 of the Financial Markets Conduct Act 2013.
New section 86T applies the civil liability provisions in Part 5 of the Financial Markets Conduct Act 2013 to contraventions of new sections 86N and 86P.
New section 86U prevents both a fine and a civil penalty from being imposed for the same conduct, which largely mirrors section 507 of the Financial Markets Conduct Act 2013.
New section 86V provides that the conduct to which Part 5 of the Financial Markets Conduct Act 2013 applies has extraterritorial effect.
New subpart 2C (new sections 86W to 86ZF) contains provisions about administrative penalties and related provisions.
New section 86W enables the chief executive to impose administrative penalties on unit product markets and unit market participants for the contravention of specified provisions in new subpart 2B.
New section 86X contains provisions relating to penalty notices.
New section 86Y provides for the content of penalty notices.
New section 86Z relates to other notices given by the chief executive.
New section 86ZA enables unit market participants to seek a review of a penalty decision.
New section 86ZB provides a right of appeal to the District Court against a decision of the chief executive under new section 86ZA.
New section 86ZC provides a further right of appeal to the High Court on questions of law only.
New section 86ZD provides that the obligation to pay and the right to receive and recover any penalty imposed under new section 86W is not suspended by any review or appeal.
New section 86ZE relates to the handling of penalty money.
New section 86ZF requires the chief executive to publish certain information about unit market participants who fail to comply with their obligations.
Clause 52 inserts new section 89B to enable the EPA to direct the Registrar to publish aggregate and anonymised trading information.
Clause 53 inserts new section 94A to enable the chief executive to require unit market participants and unit product markets to provide specified kinds of information that,—
for unit market participants, are necessary for the purpose of monitoring, administration, or enforcement of unit market participants:
for unit product markets, are necessary for other reasonable government purposes related to the emissions trading scheme.
Clause 54 amends section 99 to allow the Treasury to disclose information for the purposes of, or in connection with, economic and fiscal updates and reporting requirements of the Public Finance Act 1989 or to enable the provision of information to the Treasury to enable it to give effect to its functions.
Clause 55 amends section 120 to enable the EPA to amend or issue a penalty notice if the EPA is satisfied that the information contained in an emissions return is incorrect.
Clause 56 replaces section 120A(3) to improve the operation of the provisions relating to the amendment of an original emissions return.
Clause 57 amends section 123 to exclude the transfer of units to a participant as a result of an amendment to a participant’s emissions return or an assessment that results in an entitlement for the participant to receive New Zealand units, if the units are required to be transferred elsewhere.
Clause 58 inserts new sections 128B and 128C.
New section 128B enables the EPA to extend deadlines for returns and other matters in situations where a disruption event occurs. The following deadline extensions are provided for—
up to 20 working days for filing an emissions return for a transmission of interest if the participant is unable to file the return by the due date:
up to 60 working days for filing any emissions return, giving any notice, applying for an allocation of the number of units in the closing allocation adjustment, notifying the person’s closing allocation adjustment and repaying the number of units in the closing allocation adjustment, or applying for an allocation of New Zealand units for an eligible industrial activity:
up to 20 working days for approval to use a unique emissions factor:
up to 60 working days for surrendering or repaying units that are due in relation to the emissions return.
New section 128C defines the term significant disruption as—
a national or local state of emergency declared under section 66 or 68 of the Civil Defence Emergency Management Act 2002; or
a significant disruption declared by the Minister under this section.
Clause 59 amends section 134 to exclude liability for a penalty if a person fails to surrender or repay units by the due date through no fault of their own.
Clauses 60 and 61 amend sections 134C and 134D to improve the workability of the penalty provisions for submitting an incorrect emissions return.
Clause 62 amends the interest for late payment provisions in section 137 to correct an error in section 137(1), which requires both paragraphs (b) and (c) of that provision to be met. The provision should provide that interest is payable if—
the person has not paid the penalty by the date on which the penalty was due (as stated in the relevant notice); or
in the case of a penalty imposed under section 134 or 134AA, the person has not surrendered or repaid the units to which the penalty relates.
Clause 63 amends the formula in section 138(4) to provide that item Z in the table is the rate of interest prescribed by the Governor-General by Order in Council made under new section 138AA (as inserted by clause 64). This enables a separate interest rate for interest on any refunded penalty and interest from the interest rate set for late payments by ETS participants.
Clause 64 inserts new sections 138AA and 138AB.
New section 138AA provides for the setting of an interest rate for the purpose of the calculation described in section 138(4).
New section 138AB provides for cases where a penalty and any interest is imposed on a person under sections 134 to 134D. The EPA may hold the penalty and any related interest paid until the expiry of the period specified in section 144(1A) or the completion of the review and any appeal relating to the review decision.
Clause 65 inserts new section 149A to provide for the sharing of unit market information to facilitate the exchange of information for the purposes of monitoring, administration, enforcement, or other reasonable government purposes relating to the unit market between certain persons and agencies.
Clause 66 corrects an error in section 157.
Clause 67 amends section 161A to change the basis on which the Minister may recommend the making of regulations that have the effect of removing an activity from the regulations. Under the amendments, a recommendation may be made—
to correct an administrative or mathematical error:
if the status of the activity changes:
if no person is undertaking the activity and it has been at least 2 years since a person has been allocated New Zealand units in respect of that activity.
Clause 68 amends section 161D to require a participant to provide the Minister with copies of any proposed electricity-related contracts that would affect the electricity cost increase that the persons carrying out the activity would face owing to the obligation imposed by the Act.
Clause 69 amends section 161F to provide that a notice issued under this section by the Minister may require information other than the information described in section 161D(1)(e) in respect of the first financial year of operation.
Clause 70 inserts new section 162AAA, which enables the making of an Order in Council amending Schedule 3 (activities with respect to which persons must be participants) by adding a further activity to that schedule, other than an activity that results in the inclusion of biogenic methane, nitrous oxide, or carbon dioxide greenhouse gases from the agriculture sector, as reported in the New Zealand Greenhouse Gas Inventory.
Clause 71 amends section 162 to include references to new Part 5 of Schedule 4.
Clause 72 inserts new section 166A to enable the EPA to charge interest for late payment of fees or charges under the Act at the rate prescribed by Order in Council.
Clause 73 amends section 167 to provide that regulations may enable the recovery of the costs of debt collection agencies used to assist in the collection of fees and charges payable under the regulations.
Clause 74 amends section 168 to include references to new Part 5 of Schedule 4.
Clause 75 amends section 178 to enable the EPA to recover the costs of collecting, or assisting in the collection of, any fees or charges that are payable.
Subpart 8—Amendments to Part 5
Clause 76 amends section 179 to provide for the EPA’s power in new section 179B to extend forest re-establishment time frames.
Clause 77 amends section 179A to provide that forest land that is cleared may not be treated as deforested for the purposes of the Act during the period of an extension granted for the land under new section 179B.
Clause 78 inserts new sections 179B and 179C.
New section 179B enables the EPA to extend the forest re-establishment time frames specified in sections 179(1) and 193J(2), and the offset dates specified in sections 181G(5)(a) and 192C(2)(g), by up to 3 years if satisfied that the forest land is located in an area significantly affected by a disruption, delay, or limit, and the situation is prescribed or provided for by regulations made under new section 179C.
New section 179C enables regulations to provide for extensions due to disruptions under new section 179B.
Clause 79 amends the provisions relating to P90 offset applications in section 181B to—
require the EPA to notify the applicant of the outcome of an application:
add to the area 2 criteria forest land established by direct planting activities, including direct seeding, but excluding natural forest regeneration:
remove from the participant criteria for area 2 the exemption from the need to comply with the restriction under section 182AB (the restriction on registration as participant in relation to restricted forest land).
Clauses 80 to 84 and 86 amend provisions in sections 181C, 181D, 181J, 181N, 181O, and 181S to include references to the liability to repay units.
Clause 85 amends section 181R to require the owner of affected P90 offsetting land to notify the EPA of the date on which the clearing of the land occurred within 20 working days after that date.
Clause 87 amends the definition of owner in section 181V to clarify that the previous owner of the land concerned is the person who owned the land immediately before the offset application date.
Clause 88 amends section 182A, which relates to conditions on registration as a participant in post-1989 forest land that apply to certain activities of standard or permanent forestry. The amendment provides that a person may not be registered as a participant in relation to exempt land unless that land has been deforested and has remained deforested for at least 9 years and separately provides for the requirements about the emissions return.
Clause 89 amends section 184D to require a person submitting the final forestry return for a carbon accounting area 1 to report separately the sum of units to be reimbursed or repaid.
Clause 90 amends section 187 to require that a person who transfers an interest in post-1989 forest land must have a holding account before submitting the notice of transmission.
Clause 91 amends section 187B to change the deadline for giving or correcting the required notice from 90 working days after the EPA gives its notice to 20 working days.
Clause 92 makes technical changes to section 189.
Clauses 93 to 96 repeal redundant provisions relating to PFSI activities.
Clause 97 amends section 190A to allow a person to cease to be registered for permanent forestry if they are not carrying out, and have never carried out, the activity of standard or permanent forestry in a carbon accounting area, or part of an accounting area, for which they are registered.
Clauses 98 replaces section 190KZ to enable the EPA to extend the duration of a LUC class 6 land permit (normally 3 years) provided that the applicant notifies the EPA before its expiry date.
Clause 99 amends section 191B to replace a reference to a previous carbon accounting area with a reference to a carbon accounting area immediately before the constitution date.
Clause 100 amends section 191D to provide that the nominal average carbon stock (NACS) for land that has a subsequent rotation forest is based on the prior clearing age or the current age of the forest species on the land.
Clause 101 makes a technical change to section 191E.
Clause 102 amends section 191I to align it with changes made in clause 100.
Clause 103 amends section 192A to specify how to calculate a new unit balance report that covers 1 or more carbon accounting areas.
Clause 104 amends section 192B to require the EPA to notify applicants of the outcome of P89 offset applications.
Clause 105 amends section 192Q to provide a formula for calculating the opening unit balance for the remaining CAA6s and substitute CAA6s.
Clause 106 replaces section 193M to remove the references to a hectare of temporary adverse event land, for the purposes of establishing when the land achieves carbon recovery.
Clauses 107 and 108 amend sections 194 and 194B to remove provisions relating to input returns.
Clause 109 amends section 195 to extend the requirement to notify the status of pre-1990 forest land and P90 offsetting land, so that it applies whether or not a person is registered as a participant for the land.
Subpart 9—Amendments to schedules
Clause 110 inserts the transitional provisions relating to this Bill set out in Schedule 1 as new Part 8 of Schedule 1AA. The transitional provisions provide that—
the requirement in new section 30GB(3) to ensure that regulations prescribe limits and price control settings for each of the next 5 calendar years does not apply in the year following the commencement of this Bill (new clause 56 of Schedule 1AA):
a unit product market’s failure to report daily trading information under new section 86I(1) will not attract an administrative penalty during the month following the commencement date:
new clause 58 enables the Minister to recommend the making of regulations under section 161A that remove an eligible industrial activity from those regulations based on information provided on an actual basis under section 161F(5):
the Minister may approve a proposed adaptation plan (as defined in new clause 55 of Schedule 1AA) in specified circumstances and a plan approved by the Minister is treated as if it were an adaptation plan prepared and adopted under this Bill (new clause 59 of Schedule 1AA).
Clause 111 inserts new subpart 3 into Part 3 of Schedule 3 (activities with respect to which persons must be participants). The additional activity is importing carbon dioxide where any prescribed threshold is met.
Clause 112 inserts a new Part 5 into Schedule 4. New Part 5 applies on and after a date fixed by Order in Council and includes persons undertaking activities that provide enduring storage of carbon dioxide from the atmosphere as participants in the emissions trading scheme for the purposes of Parts 4 to 5D of the Act (see section 54 of the Act).
Part 2Consequential amendments
Clause 113 makes the consequential amendments set out in Schedule 2.
Hon Simon Watts
Climate Change Response Amendment Bill
Government Bill
334—1
Contents
The Parliament of New Zealand enacts as follows:
1 Title
This Act is the Climate Change Response Amendment Act 2026.
2 Commencement
This Act comes into force on the day after Royal assent.
3 Principal Act
This Act amends the Climate Change Response Act 2002.
Part 1 Amendments to principal Act
Subpart 1—Amendments to Part 1
4 Section 2A amended (Application of Schedules 3 and 4)
After section 2A(14), insert:
(14AA)
Subpart 3 of Part 3 of Schedule 3 applies on and after a date to be appointed by the Governor-General by Order in Council.
(14AAB)
Part 5 of Schedule 4 applies on and after a date to be appointed by the Governor-General by Order in Council.
5 Section 3 amended (Purpose)
In section 3(1)(aa), replace “clear and stable”
with “clear, stable, efficient, and effective”
.
6 Section 3A amended (Treaty of Waitangi (Te Tiriti o Waitangi))
(1)
Before section 3A(b)(ii), insert:
(i)
section 2A(14AA) (power to commence subpart 3 of Part 3 of Schedule 3 by Order in Council):
(2)
After section 3A(b)(xa), insert:
(xi)
section 162AAA (adding further activity to Schedule 3):
(3)
Replace section 3A(b)(xii) with:
(xii)
section 162 (adding further activity to Parts 2 and 5 of Schedule 4):
7 Section 3B amended (Consultation about certain regulations, orders, and notices)
(1)
Before section 3B(1)(a), insert:
(aaa)
section 2A(14AA) (power to commence subpart 3 of Part 3 of Schedule 3 by Order in Council):
(2)
After section 3B(1)(ia), insert:
(j)
section 162AAA (adding further activity to Schedule 3):
(3)
Replace section 3B(1)(k) with:
(k)
section 162 (adding further activity to Parts 2 and 5 of Schedule 4):
8 Section 4 amended (Interpretation)
(1)
In section 4(1), insert in their appropriate alphabetical order:
methodological improvement means improvements to the methodologies used for estimates for the New Zealand Greenhouse Gas Inventory, including changes to the methodologies applied for estimating emissions, activity data updates, and the addition of new emissions sources or sinks
New Zealand unit market includes government auctions of units under section 6A and the secondary market
PFSI land means a person’s forest land that a forest sink covenant was registered against immediately before 1 January 2024
unit derivative product—
(a)
means a derivative where the underlying product is a unit, and includes (but is not limited to) forward trades, futures trades, and options contracts:
(b)
for the purposes of applying the FMA’s powers to the relevant sections of this Act, derivative has the same meaning as in section 8(4) of the Financial Markets Conduct Act 2013
unit market participant—
(a)
means a person who makes or accepts offers to acquire or dispose of units or unit derivative products, provides advice about unit product trading transactions (including advice about the best time or price at which to buy or sell, and the best traded product), or brokers or facilitates unit product trading transactions (including a unit product market); but
(b)
does not include a person who provides advice about people meeting their ETS obligations or their participation or information on the ETS more generally, even if this has an impact on buying and selling units
unit product means a product in a unit product trading transaction
unit product market has the meaning given in section 4AB
unit product trading transaction means a transaction involving units or unit derivative products
(2)
In section 4(1), definition of emissions trading scheme, before “means”
, insert “or ETS”
.
(3)
In section 4(1), definition of post-1989 forest land, replace paragraph (a)(vii) with:
(vii)
land that was exempt land that—
(A)
has been deforested; and
(B)
has remained deforested for at least 9 years; and
(4)
In section 4(1), definition of pre-1990 forest land, paragraph (b)(ii), replace “section 182A(2)(b)”
with “section 182A(2)(b)(ii)”
.
(5)
In section 4(1), definition of removal activity, after paragraph (b), insert:
(c)
an activity that is listed in Part 5 of Schedule 4 (carbon removal activities)
9 New section 4AAB inserted (Meaning of unit product market)
After section 4AA, insert:
4AAB Meaning of unit product market
(1)
Unit product market means a facility that facilitates the exchange of unit products between buyers and sellers on secondary markets by means of which—
(a)
offers to acquire or dispose of unit products are made or accepted; or
(b)
offers or invitations are made to acquire or dispose of unit products that are intended to result or may reasonably be expected to result, directly or indirectly, in—
(i)
the making of offers to acquire or dispose of unit products; or
(ii)
the acceptance of offers of that kind.
(2)
Facilities that only provide the following services are not regarded as unit product markets:
(a)
transactions that occur bilaterally and off-screen:
(b)
transactions in which prices and volumes are not discoverable by multiple participants or are not shared with multiple participants simultaneously.
(3)
Relevant matters for the purposes of this section include (but are not limited to)—
(a)
whether the existence of the facility is visible to the general public and access for potential users requires only low or minimal up-front funds to invest:
(b)
whether the facility provides for customer direct execution via on-screen functions (for example, on-screen buttons for buying or selling), even if it also supports other methods:
(c)
whether the facility provides visibility of transaction history.
(4)
The person who operates a unit product market is responsible for complying with the obligations of the unit product market under this Act.
Subpart 2—Amendments to Part 1A
10 Section 5D amended (Membership of Commission)
In section 5D(1)(c), replace “7”
with “5”
.
11 Section 5J amended (Commission’s functions)
Repeal section 5J(e).
12 Section 5O amended (Commission must act independently)
Replace section 5O(2)(a) with:
(a)
recommending limits and price control settings under section 5ZOA(2); and
13 Section 5P amended (Obligation to maintain confidentiality)
After section 5P(2)(b), insert:
(ba)
to the extent that the information is statistical information and no person is identifiable from its disclosure; or
Subpart 3—Amendments to Part 1B
14 Section 5S amended (Other 2050 target reviews)
(1)
Replace section 5S(1)(a) with:
(a)
in the first calendar year of each emissions budget period specified in section 5X(3)(c), (d), and (f) and in 2040 for the emissions budget period specified in section 5X(3)(e) (the 2050 target review years); and
(2)
Replace section 5S(2)(a) with:
(a)
by 31 December of the 2050 target review years; or
15 Section 5U amended (Government response to target review recommendations)
(1)
Replace section 5U(1) with:
(1)
Within 12 months after receiving a recommendation from the Commission to amend the 2050 target under section 5R or 5T, the Minister must—
(a)
make the Government’s response publicly available; and
(b)
present a copy of that response to the House of Representatives.
(2)
Repeal section 5U(3).
16 Section 5W amended (Purpose of this subpart)
In section 5W(a), delete “and contributing to the global effort under the Paris Agreement to limit the global average temperature increase to 1.5° Celsius above pre-industrial levels”
.
17 Section 5X amended (Duty of Minister to set emissions budgets and ensure they are met)
(1)
In section 5X(3)(e), replace “2030”
with “2029”
.
(2)
In section 5X(3)(f), replace “2035”
with “2034”
.
(3)
In section 5X(3)(g), replace “10”
with “11”
.
18 Section 5ZA amended (Commission to advise Minister)
Repeal section 5ZA(3).
19 Section 5ZB amended (Minister’s response to Commission)
(1)
Repeal section 5ZB(1) and (2).
(2)
Replace section 5ZB(4) with:
(4)
If the proposed emissions budget departs from the advice of the Commission, the Minister must explain the reasons for any departures from the Commission’s advice in the response provided under subsection (3).
20 Section 5ZC amended (Matters relevant to advising on, and setting, emissions budgets)
(1)
In section 5ZC(2)(b)(iv), after “achievable”
, insert “through efficient and effective policies”
.
(2)
Replace section 5ZC(2)(b)(v) with:
(v)
the results of any consultation undertaken on an emissions budget under section 5N:
21 Section 5ZE amended (When emissions budgets may be revised)
In section 5ZE(6)(a), after “exceptional”
, insert “or there have been methodological improvements”
.
22 Section 5ZG amended (Requirement for emissions reduction plan)
Replace section 5ZG(3) with:
(3)
The plan must include a strategy to mitigate the impacts that reducing emissions and increasing removals will have on iwi and Māori.
(4)
The plan may include any other policies or strategies that the Minister considers necessary for the purposes of this Act.
23 Section 5ZH repealed (Commission to advise on emissions reduction plans)
Repeal section 5ZH.
24 Section 5ZI amended (Minister to prepare and make emissions reduction plan publicly available)
(1)
Replace section 5ZI(1) with:
(1)
In preparing a plan and supporting policies and strategies for an emissions budget period, the Minister must—
(a)
ensure that consultation has been adequate, including with sector representatives, affected communities, and iwi and Māori; and
(b)
undertake any further consultation that the Minister considers necessary.
(2)
In section 5ZI(2)(b), delete “at least 12 months”
.
(3)
Replace section 5ZI(3) with:
(3)
The Minister may do either or both of the following at any time and without repeating the processes required by subsections (1) to (2A):
(a)
make a minor or technical change to the plan and supporting policies and strategies:
(b)
otherwise amend the plan and supporting policies and strategies in relation to the current emissions budget (while remaining consistent with the requirements in section 5ZG(3)), if the Minister has considered the impact of the changes—
(i)
on emissions for the emissions budget period; and
(ii)
on iwi and Māori.
(3A)
The Minister may make an amendment to the emissions reduction plan under subsection (3)(a) publicly available at any time after an amendment is made (see also the requirement in section 5ZK(3)(c)).
(3B)
The Minister must make an amendment to the emissions reduction plan under subsection (3)(b) publicly available and include with the amendment a summary of the impacts of the changes that the Minister considered in accordance with that paragraph (see also the requirement in section 5ZK(3)(c)).
25 Section 5ZK replaced (Commission to report annually on results of monitoring)
Replace section 5ZK with:
5ZK Commission to report annually on results of monitoring
(1)
The Commission must prepare an annual report that includes, taking into account any requirements prescribed by regulations made under section 30X,—
(a)
the latest projections for current and future emissions and removals; and
(b)
measured emissions and measured removals from the New Zealand Greenhouse Gas Inventory; and
(c)
an assessment of the adequacy of the emissions reduction plan and progress in its implementation, including any new opportunities to reduce emissions.
(2)
The Commission must provide its annual report to the Minister by 30 April of each year.
(3)
Not later than 31 December each year, the Minister must present to the House of Representatives and make publicly available a report that—
(a)
sets out the Minister’s response to the Commission’s annual report and recommendations; and
(b)
describes the progress made in implementing the current emissions reduction plan; and
(c)
notes any amendments to that plan made under section 5ZI(3) since the Minister’s last report.
26 Section 5ZL amended (Commission to report at end of emissions budget period)
(1)
In section 5ZL(1), replace “evaluating”
with “, taking into account any requirements prescribed by regulations made under section 30X, that evaluates”
.
(2)
In section 5ZL(2)(a), replace “3”
with “6”
.
27 New section 5ZLA inserted (Emissions projection guidelines)
After section 5ZL, insert:
5ZLA Emissions projection guidelines
(1)
The chief executive may issue guidelines that specify—
(a)
methods for producing projections of New Zealand’s current and future greenhouse gas emissions and removals; and
(b)
timing of the publication of emission projections.
(2)
Before issuing guidelines under subsection (1), the chief executive must consult—
(a)
the Commission; and
(b)
chief executives of agencies who prepare or contribute to the preparation of emission projections.
(3)
The chief executive must, as soon as practicable after issuing the guidelines, make them publicly available.
28 Section 5ZOA amended (Recommendations about limits and price control settings for units)
In section 5ZOA(3)(c), replace “a reasonable time before”
with “by 30 April of each year in which”
.
Subpart 4—Amendments to Part 1C
29 Section 5ZT amended (National adaptation plan must be presented to Parliament and made publicly available)
Replace section 5ZT(2) with:
(2)
The Minister may do either or both of the following at any time and without repeating the processes required by section 5ZS(4) and (6):
(a)
make a minor or technical change to a national adaptation plan:
(b)
otherwise amend the plan (while remaining consistent with the requirement in section 5ZS(2)), if the Minister has considered—
(i)
the implications of the changes for addressing the most significant risks identified in the national climate change risk assessment; and
(ii)
the impact of the changes on iwi and Māori.
(3)
The Minister must make publicly available—
(a)
an amendment made under subsection (2) as soon as practicable after the amendment is made; and
(b)
for an amendment made under subsection (2)(b), a summary of the implications and the impacts of the changes that the Minister considered in accordance with that paragraph.
30 Section 5ZU amended (Progress reports on national adaptation plan)
(1)
Replace section 5ZU(1) with:
(1)
For each national adaptation plan, the Commission must provide the Minister with a progress report that evaluates the implementation of the adaptation plan and its effectiveness 2 years after the adaptation plan is made publicly available.
(2)
Repeal section 5ZU(3).
31 Section 5ZV amended (Minister must respond to progress report)
(1)
In the heading to section 5ZV, replace “respond”
with “provide written response”
.
(2)
Replace section 5ZV(a) and (b) with:
(a)
make a written response to the progress report publicly available; and
(b)
present the response to the House of Representatives.
32 New sections 5ZY to 5ZZI and cross-heading inserted
After section 5ZX, insert:
Adaptation plans
5ZY Interpretation
In this subpart, unless the context otherwise requires,—
adoption requirement means a requirement under this subpart that applies in respect of the preparation or adoption of an adaptation plan
climate-related natural hazard means any natural hazard that is materially influenced by weather or climate conditions
climate-related natural hazard risk—
(a)
means a risk from natural hazards that is materially influenced by weather or climate conditions; and
(b)
includes any increase or decrease in the likelihood, frequency, intensity, duration, timing, or spatial extent of that occurence resulting from climate change
commencement date means the commencement date of the Climate Change Response Amendment Act 2026
existing plan means a plan that—
(a)
relates to adaptation responses to the risks from coastal or flood hazards (fluvial or pluvial) to residential activity or supporting infrastructure; and
(b)
has been approved or adopted by the territorial authority under section 76 of the Local Government Act 2002 before the date on which the regulations under section 5ZZI commence
natural hazard—
(a)
means any atmospheric-, earth-, or water-related occurrence (including earthquake, tsunami, erosion, volcanic and geothermal activity, landslip, subsidence, sedimentation, wind, drought, fire, or flooding), the action of which adversely affects or may adversely affect human life, property, or other aspects of the environment; and
(b)
includes the effects of climate change on any of those occurrences
priority location means an area identified as a priority location for an adaptation plan by a regional spatial plan
regional spatial plan means a regional spatial plan that has been adopted under the Planning Act 2025
special consultative procedure means the procedure set out in section 83 of the Local Government Act 2002
substantially completed plan means a plan being prepared by a territorial authority that—
(a)
relates to adaptation responses to the risks from coastal or flood hazards (fluvial or pluvial) to residential activity or supporting infrastructure; and
(b)
relates to a location in respect of which adaptation planning has been substantially advanced and for which public consultation has been completed or is substantially advanced
territorial authority has the meaning given in section 5(1) of the Local Government Act 2002.
5ZZ Purpose of adaptation plan
The purpose of an adaptation plan is to—
(a)
provide strategic planning and co-ordination of the actions and investment needed to manage climate-related natural hazard risks in a cost-effective way that accounts for the longer term; and
(b)
communicate how those risks are intended to be managed by local authorities.
5ZZA Territorial authorities to prepare adaptation plan
(1)
A territorial authority must adopt an adaptation plan in relation to any priority location within its district using the special consultative procedure.
(2)
If a regional spatial plan or any adjacent regional spatial plans identify a priority location that spans 2 or more districts, the territorial authorities for those districts must—
(a)
each prepare the adaptation plan for their portion of the priority location; or
(b)
jointly prepare the adaptation plan.
(3)
A territorial authority may, in relation to any location within its district that is not identified as a priority location, adopt an adaptation plan using the special consultative procedure.
(4)
Section 83A(1) of the Local Government Act 2002 applies in relation to the use of the special consultative procedure under this section as if “any other special consultative procedure that it”
were replaced with “any other consultation that it or another organisation”
.
(5)
When preparing an adaptation plan, a territorial authority must receive any relevant information provided by the Local Leadership Body established under the Ngai Tāmanuhiri Claims Settlement Act 2012 to assist with the preparation of that plan.
(6)
When preparing an adaptation plan, a territorial authority must have particular regard to any relevant content in the natural resources document made under Te Rohe o Rongokako Joint Redress Act 2022.
5ZZB Adoption of adaptation plan
(1)
A territorial authority must begin the development of an adaptation plan required by section 5ZZA(1) before,—
(a)
if the regional spatial plan identifies the relevant priority location as a priority group 1 location, the first anniversary of the notification of the adoption of the regional spatial plan; or
(b)
if the regional spatial plan identifies the relevant priority location as a priority group 2 location, the sixth anniversary of the notification of the adoption of the regional spatial plan.
(2)
A territorial authority must adopt an adaptation plan required by section 5ZZA(1) before,—
(a)
if the regional spatial plan identifies the relevant priority location as a priority group 1 location, the fifth anniversary of the notification of the adoption of the regional spatial plan; or
(b)
if the regional spatial plan identifies the relevant priority location as a priority group 2 location, the tenth anniversary of the notification of the adoption of the regional spatial plan.
(3)
A territorial authority must—
(a)
notify the Minister in writing when an adaptation plan has been adopted or amended; and
(b)
make the adaptation plan publicly available as soon as practicable after it has been adopted or amended.
5ZZC Amendment or withdrawal of adaptation plan
(1)
A territorial authority may make minor or technical amendments to an adaptation plan.
(2)
A territorial authority may make other amendments to an adaptation plan—
(a)
if the proposed amendments meet criteria prescribed in the regulations; and
(b)
in accordance with any applicable process requirements prescribed in the regulations.
(3)
A territorial authority may withdraw an adaptation plan if the location that is the subject of the plan is not currently identified as a priority location by the regional spatial plan.
(4)
A territorial authority must notify the Minister of the withdrawal of its adaptation plan.
5ZZD Content of adaptation plan
An adaptation plan must—
(a)
cover a minimum period of 30 years from the date of adoption; and
(b)
include the territorial authority’s objectives and intentions for managing climate-related natural hazard risk; and
(c)
include the options chosen to respond to climate-related natural hazard risks and a summary of reasons for the choices; and
(d)
provide triggers or thresholds for response options, including responses following a natural hazard; and
(e)
include the indicative high-level cost estimates of response options, and how the costs are intended to be met; and
(f)
include an implementation plan; and
(g)
set out how the plan will be monitored, reviewed, and reported on to the territorial authority; and
(h)
include any other matters prescribed by the regulations.
5ZZE Matters relevant to preparation or review of adaptation plan
A territorial authority must have regard to the following when preparing or reviewing an adaptation plan:
(a)
the national adaptation plan:
(b)
any relevant spatial plan prepared under the Planning Act 2025:
(c)
any relevant civil defence emergency management group plan prepared under the Civil Defence Emergency Management Act 2002:
(d)
any relevant planning document recognised by an iwi authority and lodged with the territorial authority to the extent that it relates to adaptation:
(e)
any relevant land use plan prepared under the Planning Act 2025 and any relevant natural environment plan prepared under the Natural Environment Act 2025:
(f)
any relevant plan prepared under the Local Government Act 2002:
(g)
any relevant water services strategy and stormwater network risk management plan adopted under the Local Government (Water Services) Act 2025.
5ZZF Review of adaptation plans
(1)
A territorial authority must—
(a)
begin a review of its adaptation plan—
(i)
before the tenth anniversary of its adoption; and
(ii)
within each 10 year period following the first review; and
(b)
within 2 years of commencing the review,—
(i)
complete its review; and
(ii)
adopt any amendment to, or replacement of, the adaptation plan.
(2)
A territorial authority must review its adaptation plan using the special consultative procedure.
5ZZG Minister may extend deadlines
(1)
The Minister may, on request from a territorial authority, extend by public notice a deadline imposed by or under this subpart, if the Minister is satisfied that it is reasonable to do so.
(2)
A notice under this section is secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements).
5ZZH Approval of existing plans and substantially completed plans to be treated as adaptation plans
(1)
A territorial authority may, within 2 years after the commencement date, approve an existing plan to be treated as an adaptation plan for the purposes of this Act if—
(a)
landowners and residents affected by the plan and the Minister are notified of the proposal to approve the plan before it is approved; and
(b)
regulations made under section 5ZZI have commenced.
(2)
An existing plan approved under this section has effect as if it were an adaptation plan prepared and adopted under this Act.
(3)
To avoid doubt,—
(a)
subsection (2) applies whether or not the approved existing plan complies with the adoption requirements; and
(b)
the requirements in sections 5ZZA(1) and 5ZZB(1) do not apply if an existing plan is approved under this section in relation to a priority location (whether the approval occurs before or after the identification of the priority location by a regional spatial plan); and
(c)
an existing plan approved under this section may be withdrawn as if it were an adaptation plan adopted under section 5ZZB(2).
(4)
Section 5ZZF and the requirements in regulations described in subsection (1)(b) apply to an existing plan approved under this section.
(5)
If the first review under section 5ZZF finds that an existing plan approved under this section was not prepared in accordance with, or does not meet, the adoption requirements,—
(a)
the review must recommend and the territorial authority must implement measures to ensure that the plan is prepared in accordance with and meets the adoption requirements; and
(b)
the period for the completion of the review under section 5ZZF(1)(b) (including any amendment of the plan) is 5 years from the commencement of the review.
(6)
The Minister may, within 2 years after the commencement date, approve a substantially completed plan to be treated as an adaptation plan for the purposes of this Act if—
(a)
requested to do so by a territorial authority; and
(b)
regulations made under section 5ZZI are in force when the Minister makes their decision; and
(c)
the plan met the definition of a substantially completed plan on or before the date that regulations under section 5ZZI commenced.
(7)
Subsections (2) to (5) apply for the purposes of subsection (6) as if the Minister were a territorial authority and with any other necessary modifications.
5ZZI Regulations relating to adaptation plans
(1)
The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations prescribing 1 or more of the following:
(a)
matters that must or must not be included in an adaptation plan:
(b)
requirements for preparing, communicating, and adopting adaptation plans.
(2)
Before recommending the making of regulations under subsection (1), the Minister must—
(a)
consult any persons and organisations the Minister considers appropriate; and
(b)
be satisfied that the proposed regulations require territorial authorities to consider the needs of rural, urban, and Māori communities in relation to an adaptation plan.
(3)
The Minister must recommend the making of regulations under subsection (1) before the first anniversary of the commencement date.
(4)
Regulations under this section are secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements).
Subpart 5—Amendments to Part 2
33 Section 9A amended (Functions of chief executive)
After section 9A(b), insert:
(ba)
be the New Zealand unit market monitor for the purposes of subpart 2A of Part 4; and
34 Section 20 amended (Transactions must be registered)
After section 20(1), insert:
(1A)
All other unit product trading transactions must be registered on the unit register if so required by regulations made under section 30G.
35 Section 30G amended (Regulations relating to Part 2)
(1)
After section 30G(1)(a), insert:
(aa)
prescribing information relating to unit product trading transactions that must be entered on the unit register, by whom the information must be entered, the circumstances in which the information must be entered, and how and when the information must be entered, including (but not limited to) the following information:
(i)
the trade date:
(ii)
the settlement date:
(iii)
the trade type (for example, whether it is a spot trade, a forward trade, a futures trade, or an option):
(iv)
the trade price:
(2)
After section 30G(1), insert:
(1A)
Regulations made under subsection (1) may be made in respect of any unit product trading transaction.
(3)
After section 30G(4), insert:
(4A)
Regulations made under subsection (1) apply to—
(a)
conduct in New Zealand; and
(b)
conduct in relation to unit products regardless of whether the conduct is in New Zealand or outside New Zealand.
36 Section 30GB amended (Regulations about limits and price control settings for units)
(1)
After section 30GB(2), insert:
(2A)
The Minister may only recommend the making of regulations under this section in every second year.
(2)
Replace section 30GB(3) with:
(3)
The Minister must recommend the making of regulations under this section so that the regulations are amended to ensure that, at all times, they prescribe limits and price control settings for at least the next 5 calendar years.
(3)
Replace section 30GB(4) with:
(4)
Each time the Minister is to recommend that the regulations be amended under subsection (3), the Minister—
(a)
may consider whether to recommend prescribing new limits and new price control settings for the calendar year after the year in which the amendment is made (the next year); and
(b)
must consider whether to recommend prescribing new limits and new price control settings for each of the calendar years following the next year.
(4)
In section 30GB(5), replace “(4)(b)”
with “(4)(a)”
.
(5)
In section 30GB(5)(a), replace “in the year in which the amendment is made”
with “since the last amendment was made under subsection (3)”
.
37 Section 30GC amended (Requirements for regulations about limits and price control settings for units)
In section 30GC(2)(a)(i), replace “; or”
with “; and”
.
38 Section 30H amended (Consultation and commencement for certain regulations about units and auctions)
In section 30H(3), replace “The regulations”
with “Regulations made under subsection (1)(a), (b), and (d)”
.
39 Section 30M amended (Regulations about infringement offences)
(1)
After section 30M(1)(a), insert:
(aa)
prescribing infringement offences for non-compliance by unit market participants with their obligations under regulations made under section 30G(1)(aa) to enter or enter correctly specified information on the unit register relating to unit product trading transactions:
(2)
In section 30M(2), after “(1)(a)”
, insert “or (aa)”
.
40 Section 30P amended (Appointment of enforcement officers)
(1)
After section 30P(1), insert:
(1A)
For the purpose of enforcement of infringement offences under section 30M(1)(aa), the chief executive may appoint 1 or more persons who are employees of the department as enforcement officers to exercise 1 or more of the powers and perform the functions conferred on enforcement officers under this subpart.
(2)
After section 30P(2), insert:
(3)
The following provisions of this Act apply in relation to an appointment under subsection (1A) with any necessary modifications:
(a)
sections 30Q to 30V:
(b)
section 93(2) to (5).
41 New section 30VA inserted (Chief executive may publish details of non-compliance with register reporting)
After section 30V, insert:
30VA Chief executive may publish details of non-compliance with register reporting
(1)
The chief executive may publish the following information about unit market participants who committed an infringement offence of failing to enter specified information relating to unit product trading transactions on the unit register:
(a)
the name of the participant:
(b)
the regulation prescribing the offence:
(c)
the amount of the infringement fee imposed:
(d)
the date on which the last payment for the infringement fee was due and, if the infringement fee has been paid in full, the date on which it was paid in full.
(2)
The chief executive may publish the information in whole or in part, at any time, and in whatever manner and format that the chief executive considers appropriate.
42 New subpart 5 of Part 2 inserted
After section 30W, insert:
Subpart 5—Regulations setting approach to methodological improvements in relation to emissions budgets
30X Regulations setting approach to methodological improvements in relation to emissions budgets
(1)
The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations prescribing how the Commission must take methodological improvements into account when—
(a)
revising emissions budgets under section 5ZE; or
(b)
monitoring progress towards an emissions budget under section 5ZK; or
(c)
evaluating progress made towards meeting the emissions budget under section 5ZL.
(2)
Before the Minister recommends the making of regulations under subsection (1), the Minister must consult the Commission on the proposed regulations.
(3)
Regulations under this section are secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements).
Subpart 6—Amendment to Part 3
43 Section 35 replaced (Publication)
Replace section 35 with:
35 Publication
The inventory agency must make the following publicly available:
(a)
New Zealand’s annual inventory report under Articles 4 and 12 of the Convention and Article 7.1 of the Protocol:
(b)
any report of information by New Zealand under Article 13 of the Paris Agreement:
(c)
New Zealand’s national communication (or periodic report) under Article 7.2 of the Protocol and Article 12 of the Convention.
Subpart 7—Amendments to Part 4
44 Section 57 amended (Applicant to be registered as participant in respect of activities listed in Schedule 4)
In section 57(7), replace “or 4”
with “4, or 5”
.
45 Section 63 amended (Liability to surrender units to cover emissions)
Replace section 63(5) with:
(5)
See also sections 189F and 189G in relation to liability to surrender units when transferring between permanent forestry and standard forestry in a carbon accounting area (averaging).
46 Section 65 amended (Annual emissions returns)
In section 65(1), replace “or 4”
with “4, or 5”
.
47 Section 66 amended (Quarterly returns for other removal activities)
(1)
In the heading to section 66, after “for”
, insert “carbon and”
.
(2)
In section 66(1) and (2), after “2”
, insert “or 5”
.
48 Section 84B amended (Regulations setting increased phase-out rates)
(1)
In section 84B(1)(b), delete “for an emissions budget period beginning”
.
(2)
Repeal section 84B(2), (4), and (5).
(3)
After section 84B(3)(b), insert:
(c)
it has been 5 years or more since regulations have been made under subsection (1).
(4)
After section 84B(3), insert:
(4)
Subsection (3)(c) does not apply if, since regulations were last made under subsection (1), there has been—
(a)
a revision to an emissions budget; or
(b)
a significant change that affects the matters listed in section 84C(3).
49 Section 84C amended (Procedure for regulations setting phase-out rates)
After section 84C(3)(j), insert:
(ja)
any reductions in emissions or emissions intensity achieved in respect of the eligible industrial activity by investments made by an eligible person carrying out the activity, including capital and operating expenditure related to those investments; and
50 Section 86B amended (Decisions on applications for allocations of New Zealand units to industry)
After section 86B(1), insert:
(1A)
Despite subsection (1), the EPA must not make a decision and must return an application under section 86 that is for an allocation for an eligible industrial activity if, at the time the application is received,—
(a)
the Minister has issued a notice under section 161D(1)(e) in the previous year in respect of the applicant; and
(b)
regulations under section 161A(1)(c)(ii) amending an allocative baseline for the applicant following the notice have not commenced.
51 New subparts 2A to 2C of Part 4 inserted
In Part 4, after subpart 2, insert:
Subpart 2A—Provisions relating to unit product markets and unit market participants
86G Interpretation
In this subpart,—
FMA means the Financial Markets Authority established by Part 2 of the Financial Markets Authority Act 2011
monitoring means understanding the New Zealand unit market and oversight of the operation of the unit market, including assessing risks, compliance, and investigating and assessing conduct relevant to this Part.
Compare: 2013 No 69 s 6(1)
86H Purpose of reporting requirements
Sections 86I and 86J apply for the purpose of monitoring, administration, enforcement, or other reasonable government purposes related to the emissions trading scheme.
86I Unit product markets to report information daily
(1)
A unit product market must report to the chief executive, at or reasonably shortly after the close of each working day, the following information on unit product trading transactions conducted on its platform:
(a)
the closing bid and closing offer price:
(b)
the price and volume of the final trade of the day:
(c)
the high and low traded price of the day:
(d)
the total volume of unit products transacted on the day.
(2)
The report must be in a format specified by the chief executive.
(3)
If a unit product market is unable to determine the closing bid or closing offer price, it must provide a fallback price by using its own commercial best efforts.
86J Unit product markets to maintain 7-year history of trading information
(1)
A unit product market must maintain in accordance with subsection (2) the following information on trades conducted on its platform:
(a)
its executed trade history (an activity log) in each year, including for each trade—
(i)
the trade date; and
(ii)
the settlement date; and
(iii)
the trade type; and
(iv)
the volume of unit products exchanged in trade; and
(v)
the counterparties to the trade:
(b)
the number of unit products exchanged in each year.
(2)
A unit product market must—
(a)
begin maintaining the information required by subsection (1) from the time when this section begins to apply to the unit product market and continue maintaining the information for the next 7 years; and
(b)
thereafter maintain the information for each succeeding 7-year period while it remains subject to this section.
(3)
A unit product market must,—
(a)
on request by the chief executive, provide any information specified in subsection (1)(a)(i) to (iv) and (b); but
(b)
if the chief executive requests any information specified in subsection (1)(v), the unit product market must provide it in an anonymised form.
(4)
The chief executive may refer to the FMA any information provided to the chief executive under this section that they consider supports the purpose of monitoring the unit product market.
(5)
See Part 3 of the Financial Markets Authority Act 2011, which relates to the FMA’s general information-gathering and enforcement powers.
86K Holding accounts for non-ETS participants
A unit market participant must have a holding account for the purpose of carrying out unit product trading transactions if—
(a)
either—
(i)
they are not a participant required by section 61 to have a holding account; or
(ii)
they are required by section 187(3A) to have a holding account; and
(b)
the transaction is required by regulations made under Part 2 (see section 30G) to be reported.
Subpart 2B—Enforcement, penalties, and orders
Interpretation and application
86L Interpretation in this subpart
Terms and expressions used in this subpart and not defined in this Act, but defined in the Financial Markets Authority Act 2011 or the Financial Markets Conduct Act 2013, have the same meaning as in that Act, unless the context otherwise requires.
86M Application of Part 2 of Financial Markets Conduct Act 2013
Part 2 of the Financial Markets Conduct Act 2013 applies to unit market participants and provides for fair dealing in relation to financial products and financial services, including prohibiting misleading or deceptive conduct, false or misleading representations, and unsubstantiated representations (see section 18 of that Act, which defines financial product as including a unit).
86N False or misleading statement or information
A unit market participant must not make a statement or disseminate information if—
(a)
a material aspect of the statement or information is false or the statement or information is materially misleading; and
(b)
the unit market participant knows or ought reasonably to know that a material aspect of the statement or information is false or that the statement or information is materially misleading; and
(c)
the statement or information is likely to—
(i)
induce a person to trade in unit products; or
(ii)
have the effect of increasing, reducing, maintaining, or stabilising the price for trading in unit products.
Compare: 2013 No 69 s 262
86O Criminal liability for false or misleading statement or information
(1)
A unit market participant that contravenes section 86N commits an offence if the unit market participant knows that the statement or information is false in a material aspect or is materially misleading.
(2)
A unit market participant that commits an offence under subsection (1) is liable on conviction,—
(a)
in the case of an individual, to imprisonment for a term not exceeding 5 years, a fine not exceeding $500,000, or both; and
(b)
in any other case, to a fine not exceeding $2.5 million.
Compare: 2013 No 69 s 264
86P False or misleading appearance of trading
A unit market participant must not do, or omit to do, anything if—
(a)
the act or omission will have, or is likely to have, the effect of creating, or causing the creation of, a false or misleading appearance—
(i)
with respect to the extent of active trading in unit products; or
(ii)
with respect to the supply of, demand for, price for trading in, or value of those unit products; and
(b)
the unit market participant knows or ought reasonably to know that their act or omission will, or is likely to have, that effect.
Compare: 2013 No 69 s 265
86Q Persons treated as contravening false or misleading appearance of trading prohibition
(1)
A person (A) must be treated as contravening section 86P if A is directly or indirectly a party to trading in unit products from which no change in beneficial ownership results.
(2)
Subsection (1) does not apply if,—
(a)
in trading the unit products, A was acting on behalf of another person; and
(b)
A did not know, and ought not reasonably to have known, when trading the unit products that no change in beneficial ownership would result.
(3)
A person (A) must be treated as contravening section 86P if—
(a)
A has made an offer to trade the unit products; and
(b)
either A or, to A’s knowledge, an associated person of A has made or proposes to make an opposite offer (the opposite offer) to trade unit products; and
(c)
the opposite offer substantially matches A’s offer as to the number and price of the unit products.
(4)
This section is subject to section 86S.
Compare: 2013 No 69 s 267
86R Criminal liability for false or misleading appearance of trading
(1)
A unit market participant that contravenes section 86P commits an offence if the unit market participant knows that the act or omission will have, or is likely to have, the effect of creating, or causing the creation of, a false or misleading appearance—
(a)
with respect to the extent of active trading in unit products; or
(b)
with respect to the supply of, demand for, price for trading in, or value of those products.
(2)
A unit market participant that commits an offence under subsection (1) is liable on conviction,—
(a)
in the case of an individual, to imprisonment for a term not exceeding 5 years, a fine not exceeding $500,000, or both; and
(b)
in any other case, to a fine not exceeding $2.5 million.
Compare: 2013 No 69 s 269
86S Defence
In any proceeding against a person (A) for contravention of section 86P, it is a defence if the trading in unit products occurred, or the offer to trade was made, in conformity with accepted market practices and for a proper purpose.
86T Civil liability
(1)
See section 385(3)(g) of the Financial Markets Conduct Act 2013, which provides that sections 86N and 86P are Part 5 market provisions, the contravention of which may give rise to civil liability and provides for the application of Part 8 of that Act.
(2)
A civil proceeding in relation to a contravention of section 86N or 86P is a proceeding under Part 5 of the Financial Markets Conduct Act 2013.
86U No pecuniary penalty and fine for same conduct
A unit market participant cannot be ordered to pay a pecuniary penalty and be liable for a fine under this Act for the same conduct.
Compare: 2013 No 69 s 507
General provisions
86V Territorial scope of this subpart
This subpart applies to conduct to which Part 5 of the Financial Markets Conduct Act 2013 applies regardless of whether the conduct is in New Zealand or outside New Zealand.
Compare: 2013 No 69 s 239
Subpart 2C—Administrative penalty regime and related provisions
86W Administrative penalties
(1)
The chief executive may require any of the following to pay an administrative penalty:
(a)
a unit product market that fails to report daily trading information under section 86I(1):
(b)
a unit product market that fails to maintain trading history information in accordance with section 86J(1):
(c)
a unit product market that fails to provide trading history information in accordance with section 86J(3):
(d)
a unit market participant that fails to provide information in accordance with section 94A.
(2)
The administrative penalties are,—
(a)
for a first-time breach,—
(i)
if subsection (1)(a), (c), or (d) applies, $8,000:
(ii)
if subsection (1)(b) applies, $12,000:
(b)
for a second-time breach,—
(i)
if subsection (1)(a), (c), or (d) applies, $16,000:
(ii)
if subsection (1)(b) applies, $24,000:
(c)
for a subsequent breach,—
(i)
if subsection (1)(a), (c), or (d) applies, $24,000:
(ii)
if subsection (1)(b) applies, $32,000.
(3)
If, after any breach, 12 months elapses without any further breach occurring, the administrative penalty is reset (as for a first-time breach) so that the appropriate penalty specified in subsection (2)(a) applies to the next breach (if any).
(4)
The penalty is recoverable by the chief executive in any court of competent jurisdiction as a debt due to the Crown.
(5)
Any administrative costs incurred in the recovery of an administrative penalty under subsection (1) constitutes a debt to the Crown and is recoverable by the chief executive in a court of competent jurisdiction.
86X General provisions relating to notices of administrative penalties
(1)
A person is not liable to pay an administrative penalty under section 86W if the chief executive is satisfied that the failure to comply with the relevant requirement occurred through no fault of the person.
(2)
A penalty may be imposed in respect of a breach only within 4 years after the date on which the breach first became known, or ought reasonably to have become known, to the chief executive.
(3)
No person is liable to more than 1 administrative penalty for one incidence of offending conduct, but is liable for a penalty for the same type of conduct if it occurs again.
Compare: 2023 No 35 s 165
86Y Notice of administrative penalty
(1)
The chief executive may give notice of an administrative penalty under section 86W (a penalty notice) to a unit market participant.
(2)
For a failure to report daily trading information, a penalty notice must—
(a)
refer to the failure to report daily trading information; and
(b)
refer to the provision that requires the daily trading information to be reported; and
(c)
refer to the chief executive’s ability to issue a notice; and
(d)
specify the amount of the penalty that must be paid.
(3)
For a failure to maintain a history of trading information, a penalty notice must—
(a)
refer to the failure to maintain a history of trading information; and
(b)
specify the provision that requires the history of trading information to be maintained; and
(c)
refer to the chief executive’s ability to issue a notice; and
(d)
specify the amount of the penalty that must be paid.
(4)
For a failure to provide or maintain information to the chief executive, a penalty notice must—
(a)
refer to the failure to provide the information to the chief executive; and
(b)
specify the provision that requires the information to be provided; and
(c)
refer to the chief executive’s ability to issue a notice; and
(d)
specify the amount of the penalty that must be paid.
(5)
A unit market participant must pay an administrative penalty within 20 working days after notice is given of the penalty.
86Z Giving of notices by chief executive
(1)
This section applies if this Act requires the chief executive to give a notice to a unit market participant.
(2)
If this section applies, the chief executive—
(a)
must give the notice in writing to—
(i)
the unit market participant; or
(ii)
a representative authorised to act on their behalf; and
(b)
may give notice by—
(i)
personal delivery to a unit market participant that is not a body corporate:
(ii)
personal delivery to a unit market participant that is a body corporate, if the personal delivery is made to their office during working hours:
(iii)
an electronic means of communication to an electronic address used by the unit market participant:
(iv)
post to—
(A)
the street address of the unit market participant’s usual or last known place of residence; or
(B)
the street address of any of their usual or last known places of business; or
(C)
any other address, if they have notified the chief executive that they accept notices at the address.
(3)
A notice given by post under subsection (2)(b)(iv) is to be treated as having been given at the time the notice would have been delivered in the ordinary course of the post.
(4)
If a notice is sent to an electronic address used by a unit market participant,—
(a)
the unit market participant is treated as having consented to receive the notice at that address; and
(b)
the notice is treated as having been served at the time the electronic communication first entered an information system outside the control of the chief executive.
86ZA Request for review of decisions
(1)
A unit market participant affected by a decision of the chief executive to impose a penalty on them under section 86Y may request the chief executive to review the decision.
(2)
The request must be made by notice to the chief executive within 20 working days after the person receives the penalty notice.
(3)
The request must set out the grounds on which it is believed that the original decision should be reviewed.
(4)
For the purposes of a review, the chief executive may—
(a)
require the person requesting the review to supply information additional to that contained in the request; and
(b)
consider any information that the chief executive already holds and that is relevant to the review, as long as the chief executive—
(i)
gives a notice to the person requesting the review that describes the information and invites them to comment on or object to it; and
(ii)
considers any comments or objections.
(5)
Following a review, the chief executive may confirm, revoke, or vary the decision in the manner that the chief executive thinks fit.
(6)
The decision requested to be reviewed remains valid unless and until altered by the chief executive.
(7)
The chief executive must, as soon as practicable, give notice to the person who requested the review of the decision on the review, and of the reasons for it.
(8)
A decision by the chief executive under this section is final, unless determined otherwise by a court under an appeal under section 86ZB or 86ZC.
Compare: 2002 No 40 s 144
86ZB Right of appeal to District Court
(1)
A person has a right of appeal to the District Court if affected by a decision of the chief executive under section 86ZA.
(2)
The court may confirm, reverse, or modify the decision appealed against.
(3)
Every decision appealed against under this section continues in force pending the determination of the appeal, and no person is excused from complying with any of the provisions of this Act on the ground that any appeal is pending.
Compare: 2002 No 40 s 145
86ZC Appeals to High Court on questions of law only
If a party to any proceedings before the District Court under section 86ZB is dissatisfied with any determination of the court as being erroneous in point of law, the party may appeal to the High Court by way of case stated for the opinion of the court on a question of law only.
Compare: 2002 No 40 s 146
86ZD Obligation to pay penalty not suspended by review or appeal
(1)
The obligation to pay and the right to receive and recover any penalty imposed under section 86W are not suspended by any review or appeal.
(2)
If the applicant or appellant is successful in the review or appeal, the amount of any penalty paid by the applicant must be refunded to the applicant or appellant by the chief executive.
Compare: 2002 No 40 s 126
86ZE Penalty money
(1)
On the completion of a person’s review or appeal (as the case may be) under this subpart, the chief executive must transfer the penalty money to a Crown Bank Account if the review or appeal was unsuccessful or the period of 20 working days for reviewing the decision has expired.
(2)
The chief executive may hold penalty money until the review or appeal has been completed.
86ZF Chief executive to publish number of cases of non-compliance with reporting requirements
(1)
If unit market participants fail to comply with their obligations referred to in section 86I(1), 86J, or 94A, the chief executive must publish the number of unit market participants that fail to comply.
(2)
The chief executive may publish the following information about that non-compliance:
(a)
the name of the unit market participant:
(b)
the provision that was not complied with:
(c)
the amount of the administrative penalty imposed:
(d)
the date on which the last payment for the administrative penalty was due and, if the penalty has been paid in full, the date on which it was paid in full.
(3)
The chief executive may publish the information in whole or in part, at any time, and in whatever manner and format that the chief executive considers appropriate.
52 New section 89B inserted (EPA may publish aggregate and anonymised trading information)
After section 89A, insert:
89B EPA may publish aggregate and anonymised trading information
(1)
The EPA may direct the Registrar to publish aggregate and anonymised trading information collected from the unit register at any time and as often as the EPA considers appropriate.
(2)
Subsection (1) applies only to trading information collected under regulations made under section 30G(1)(aa).
53 New section 94A inserted (Further power to require information)
After section 94, insert:
94A Further power to require information
(1)
The chief executive may, by notice, require—
(a)
a unit market participant to provide any information that is necessary for the purpose of the monitoring, administration, or enforcement of provisions of this Act relating to unit market participants:
(b)
a unit product market to provide any information that is necessary for other reasonable government purposes related to the emissions trading scheme.
(2)
A unit market participant who is not a unit product market must maintain for 7 years their executed trade history (an activity log) in each year, including for each trade—
(a)
the trade date; and
(b)
the settlement date; and
(c)
the trade type; and
(d)
the volume of unit products exchanged in trade; and
(e)
the counterparties to the trade.
(3)
The information required to be provided under subsection (1) must,—
(a)
if required by the chief executive, be accompanied by a statutory declaration attesting to the truthfulness of the information provided; and
(b)
be provided—
(i)
in the form specified by the chief executive; and
(ii)
within any reasonable time specified in the notice requiring the information; and
(iii)
free of charge.
(4)
The chief executive may refer to the Financial Markets Authority any information provided to the chief executive under this section that they consider supports the purpose of monitoring the unit product market.
(5)
See Part 3 of the Financial Markets Authority Act 2011, which relates to the Financial Markets Authority’s general information-gathering and enforcement powers.
54 Section 99 amended (Obligation to maintain confidentiality)
Replace section 99(2)(b)(iiia) with:
(iiia)
for the purposes of, or in connection with, economic and fiscal updates and reporting requirements of the Public Finance Act 1989 or to enable the provision of information to the Treasury to enable the Treasury to give effect to its functions; or
55 Section 120 amended (Amendment to emissions returns by EPA)
Replace section 120(1) with:
(1)
Subject to section 127, if the EPA is satisfied that the information contained in an emissions return is incorrect, the EPA may, at any time,—
(a)
amend, as the EPA thinks fit, the emissions return and any assessment of the participant’s liability to surrender units or entitlement to receive New Zealand units in the emissions return; and
(b)
amend or issue a penalty notice.
56 Section 120A amended (Liabilities, penalties, and interest when emissions returns amended)
(1)
Replace section 120A(3) with:
(3)
The EPA, in assessing the matters required to amend the original emissions return, must calculate all of the following that apply:
(a)
the number of units that the person is liable to surrender or repay under the amended emissions return (the amended total units):
(b)
the units that the person was liable to surrender or repay under the original emissions return (the original total units) and—
(i)
the number of amended total units that do not exceed the original total units (the base units):
(ii)
the number of units by which the amended total units exceed the original total units (the additional units).
(3A)
The EPA must also calculate, in relation to the original emissions return, all of the following that apply:
(a)
if any of the base units were not surrendered or repaid by a due date before the initial notice date (the unpaid base units), the penalty under section 134 or 134AA for the unpaid base units (the amended penalty):
(b)
if the EPA had already given a penalty notice specifying a penalty (the original penalty) in relation to the original emissions return,—
(i)
the amount by which the original penalty exceeds the amended penalty (the unnecessary penalty); and
(ii)
if any interest has become payable on the original penalty before the initial notice date (the original interest),—
(A)
the interest that would have become payable before that date on the amended penalty instead of the original penalty (the amended interest):
(B)
the amount by which the original interest exceeds the amended interest (the unnecessary interest).
(2)
In section 120A(4), replace “include with the amendment notice a penalty notice”
with “give a penalty notice”
.
(3)
In section 120A(5), replace “include with the amendment notice a penalty notice”
with “give a penalty notice”
.
57 Section 123 amended (Effect of amendment or assessment)
(1)
In section 123(2), replace “must”
with “may”
.
(2)
After section 123(5), insert:
(5A)
However, subsection (5) does not apply to the extent that subsection (5B) requires units to be transferred elsewhere.
(5B)
The EPA must apply section 64A as follows:
(a)
the units the person is entitled to receive are the potential transfer units:
(b)
the person is the recipient:
(c)
the time when the requirement to transfer arose is the relevant time.
58 New sections 128B and 128C and cross-heading inserted
After section 128A, insert:
Extension of deadlines for disruption event
128B Power to extend deadlines for returns and other matters
(1)
The EPA may, on application by an affected person, extend any of the following deadlines by up to 60 working days:
(a)
the deadline in this Act for filing any emissions return:
(b)
the deadline in this Act for giving any notice:
(c)
the deadline in section 84(1) for—
(i)
applying for an allocation of the number of units in the closing allocation adjustment; or
(ii)
notifying the person’s closing allocation adjustment and repaying the number of units in the closing allocation adjustment by transferring the units to a Crown holding account designated by the EPA:
(d)
the deadline in section 86(1A) for applying for an allocation of New Zealand units for an eligible industrial activity.
(2)
The EPA may extend the deadline prescribed by regulations for approval to use a unique emissions factor to calculate emissions in relation to a year by up to 20 working days and, in that case, the deadline for filing the relevant emissions return to which the unique emissions factor application relates is also extended by up to 20 working days.
(3)
If the EPA approves an extension of the deadline for filing an annual emissions return under section 65, the deadline for surrendering or repaying any units that are due in relation to the emissions return is extended to 60 working days after the EPA gives the person a notice requiring the surrender or repayment.
(4)
Before extending a deadline under subsection (1), (2), or (3), the EPA must be satisfied that—
(a)
the affected person’s usual residence, business, or forest land is located in an area directly affected by a significant disruption; and
(b)
the application for an extension was made—
(i)
before the relevant deadline or a later deadline specified in a notice under section 128C; or
(ii)
in the case of a notice and emissions return for a transmission of interest in post-1989 forest land required by section 187, within 20 working days after the deadline for the notice of a transmission of interest or any later deadline specified by the Minister in the notice under section 128C(2)(c).
(5)
In this section, affected person means—
(a)
an individual whose usual residence is in a directly affected area; or
(b)
a body corporate or an unincorporated body whose address for service or for notices is in a directly affected area; or
(c)
any person whose relevant forest land is in a directly affected area.
128C Meaning of significant disruption
(1)
In section 128B, significant disruption means—
(a)
a national or local state of emergency declared under section 66 or 68 of the Civil Defence Emergency Management Act 2002; or
(b)
a significant disruption declared by the Minister under subsection (2).
(2)
The Minister may, by notice,—
(a)
declare that a specified situation is a significant disruption for the purposes of section 128B:
(b)
require specified agencies to publish the notice in a specified manner:
(c)
impose a new deadline for the purposes of section 128B(4)(b)(ii).
(3)
In subsection (2)(a), specified situation includes (without limitation) an emergency as defined in section 4 of the Civil Defence Emergency Management Act 2002.
(4)
Subsection (2)(b) does not apply to the publication of a notice under subsection (5).
(5)
A notice made under this section is secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements).
59 Section 134 amended (Penalty for failing to surrender or repay units by due date (general rule))
Replace section 134(3) and (4) with:
Initial notice
(3)
The EPA must give a notice to the person that—
(a)
refers to the person’s failure to surrender or repay units by the due date and the provision under which the person is liable to surrender or repay the units; and
(b)
advises that the person may submit to the EPA a document containing information for the purpose of satisfying the EPA that the failure occurred through no fault of the person; and
(c)
advises that, no earlier than 20 working days after issuing the notice, the EPA will make a decision under subsection (5) on the person’s liability to pay a penalty under this section and will then give a further notice advising whether the penalty applies.
No-fault defence
(4)
However, a person is not liable to pay a penalty under this section if the EPA is satisfied that the failure to surrender or repay units occurred through no fault of the person.
Liability for penalty
(5)
The EPA must decide, no earlier than 20 working days after issuing the notice under subsection (3), if it is satisfied that the person’s failure to surrender or repay units occurred through no fault of the person.
Notice of penalty
(6)
The EPA must, as soon as practicable after making the decision under subsection (5), give a further notice to the person that—
(a)
refers to the initial notice that the EPA has given to the person under subsection (3); and
(b)
specifies the number of units that the person must surrender or repay; and
(c)
sets out the following in relation to the EPA’s decision under subsection (5):
(i)
the particulars of the decision:
(ii)
any grounds and information on which the decision was based:
(iii)
the advice that the person may seek a review of the decision under section 144; and
(d)
if a penalty is payable,—
(i)
specifies the amount of the penalty that the person must pay under this section; and
(ii)
advises that the person may request to enter into a deferred payment arrangement under section 135A; and
(iii)
advises that, unless the units are surrendered or repaid and the penalty is paid in full within 20 working days after the notice is given, interest on the amount of the penalty will accrue in accordance with section 137.
(7)
In this section, due date means the final date by which the person was required to surrender or repay the units.
60 Section 134C amended (Penalty for submitting incorrect emissions return)
(1)
In section 134C(2)(a), replace “(5)”
with “(5A)”
.
(2)
In section 134C(2)(b), replace “(8)”
with “(8A)”
.
(3)
In section 134C(3)(a), replace “net liability”
with “total liability”
.
(4)
In section 134C(3)(b), replace “net entitlement”
with “total entitlement”
.
(5)
In section 134C(5), item a of the formula, paragraph (b)(iii), replace “emissions and removals”
with “emissions or removals”
.
(6)
After section 134C(5), insert:
(5A)
However, if the result of the calculation under subsection (5) is 0, the calculation that applies is—
a × b × c
where—
- a
is the difference between 0 and the outcome of the emissions return as submitted, multiplied by 0.2
- b
is the price, in dollars, of carbon per tonne on the due date, as set by or in accordance with regulations made under section 30W
- c
is the culpability factor determined under subsection (9).
(7)
After section 134C(8), insert:
(8A)
However, if the result of the calculation under subsection (8) is 0, the calculation that applies is—
a × b × c
where—
- a
is the difference between 0 and the outcome of the emissions return as submitted, multiplied by 0.2
- b
is the price, in dollars, of carbon per tonne on the due date, as set by or in accordance with regulations made under section 30W
- c
is the culpability factor determined under subsection (9).
61 Section 134D amended (Penalty for providing incorrect information in allocation application or adjustment)
After section 134D(3), insert:
(3A)
However, if the result of the calculation under subsection (3) is 0, the calculation that applies is—
a × b × c
where—
- a
is the difference between 0 and the outcome of the emissions return as submitted, multiplied by 0.2
- b
is the price, in dollars, of carbon per tonne on the due date, as set by or in accordance with regulations made under section 30W
- c
is the culpability factor determined under subsection (4).
62 Section 137 amended (Interest for late payment)
Replace section 137(1)(b) and (c) with:
(b)
either—
(i)
the person has not paid the penalty by the date on which the penalty was due (as stated in the notice issued under the relevant section); or
(ii)
in the case of a penalty imposed under section 134 or 134AA, the person has not surrendered or repaid the units to which the penalty relates.
63 Section 138 amended (Obligation to pay penalty not suspended by appeal)
(1)
In section 138(4), replace item Z of the formula with:
- Z
is the rate of interest prescribed by the Governor-General by Order in Council made under section 138AA.
(2)
After section 138(4), insert:
(5)
If more than one rate of interest applied during the period in which the money was held, the formula in subsection (4) must be applied separately to each period for which a different interest rate applied, using the relevant rate and number of days for each period.
64 New sections 138AA and 138AB inserted
After section 138A, insert:
138AA Setting of interest rate on refunded penalty and interest
The Governor-General may, by Order in Council made on the recommendation of the Minister, prescribe an interest rate for the purposes of the calculation described in section 138(4).
138AB Interest on refunds where right of review is available
(1)
This section applies if a penalty and any interest are imposed on a person under sections 134 to 134D.
(2)
The EPA may hold the penalty and any related interest paid until whichever of the following dates is applicable:
(a)
the expiry of the period specified in section 144(1A), including any further period that the EPA allows:
(b)
the completion of the review and any appeal relating to the review decision.
(3)
Once the relevant period in subsection (2) expires, the penalty and interest must be—
(a)
refunded in accordance with the review or appeal decision; or
(b)
applied in accordance with section 138A.
65 New section 149A inserted (Sharing of New Zealand unit market information)
After section 149, insert:
149A Sharing of New Zealand unit market information
(1)
The purpose of this section is to facilitate the exchange of information for the purposes of the monitoring, administration, or enforcement of the provisions of this Act relating to the New Zealand unit market, or other reasonable government purposes relating to the New Zealand unit market, between the following persons and agencies (the persons):
(a)
the chief executive:
(b)
the EPA:
(c)
the Registrar:
(d)
the Financial Markets Authority:
(e)
the Ministry for Primary Industries:
(f)
the Ministry of Business, Innovation, and Employment.
(2)
A person referred to in subsection (1) (person A) must provide information to another person referred to in that subsection (person B) if the information—
(a)
is requested by person B; and
(b)
is required by person B to assist person B to carry out a relevant function under this Act and, in the case of the Financial Markets Authority, under the Financial Markets Conduct Act 2013 or the Financial Markets Authority Act 2011.
(3)
For the purpose of this section, the EPA may direct the Registrar to proactively share with the chief executive or the Financial Markets Authority any information entered on the unit register in accordance with regulations made under section 30G(1)(aa).
66 Section 157 amended (Unincorporated bodies)
In section 157(1)(b), delete “or 204”
.
67 Section 161A amended (Regulations in relation to eligible industrial activities)
(1)
Replace section 161A(3) with:
(3)
The Minister may recommend the making of regulations under subsection (1) that have the effect of removing an activity from the regulations only—
(a)
to correct an administrative or a mathematical error; or
(b)
if the activity was prescribed as an eligible activity on the basis of projected data under section 161F(2), and the change in status of the activity is based on information obtained on an actual basis under section 161F(5); or
(c)
if—
(i)
the Minister is satisfied that no person is undertaking the activity, having—
(A)
issued a notice under section 161D(1)(e) in respect of the activity; and
(B)
received no information in response to the notice; and
(ii)
it has been at least 2 years since a person has been allocated New Zealand units in respect of the activity.
(2)
Replace section 161A(3A) and (3B) with:
(3A)
Regulations made under subsection (1) must not amend an allocative baseline for a prescribed product of an eligible industrial activity that has been prescribed under subsection (1)(c), except for an amendment—
(a)
due to a change, or administrative or mathematical error in relation to a change, to any 1 or more of the following:
(i)
an emissions factor:
(ii)
an adjustment made under section 161C(4)(a) or (b)(ii):
(iii)
an exemption set out in an order made under section 60:
(b)
on the basis of information received in response to a notice issued in accordance with section 161F(5) (after the first year of an activity being prescribed as an eligible industrial activity or after the first year of a new product or new allocative baseline being prescribed as part of an eligible industrial activity).
(3)
Repeal section 161A(4C).
(4)
Replace section 161A(5) with:
(5)
Regulations made under subsection (1),—
(a)
for a purpose described in subsection (3)(a) or (b), come into force—
(i)
on the day that is 2 years after the date of its publication under the Legislation Act 2019; or
(ii)
any later date that may be set by the regulations:
(b)
for the purpose of subsection (3)(c), may come into force immediately.
68 Section 161D amended (Power to require information for purposes of allocation to industry)
(1)
After section 161D(1)(e)(ii), insert:
(iia)
copies of any proposed electricity-related contracts that would affect the electricity cost increase that the persons carrying out the activity would face owing to the obligation imposed by this Act on participants to surrender units, or any information in relation to the proposed contracts:
(2)
After section 161D(2), insert:
(2A)
The Minister must make guidelines publicly available relating to the exercise of the power under subsection (1)(e)(ii).
(2B)
If a person carrying out an activity specified in a notice given under subsection (1) provides the Minister with a proposed electricity-related contract referred to in subsection (1)(e)(iia), the Minister may advise the person—
(a)
whether the contract would be required to be provided under subsection (1)(e)(ii) if the contract were in force; and
(b)
any adjustment that would be made under section 161C(4)(a) if the contract were in force.
(2C)
The Minister may only exercise the powers under subsection (1)(e)(ii) and section 161C(4)—
(a)
after taking into account the guidelines required by subsection (2A); and
(b)
if the Minister provides advice under subsection (2B) and in a manner consistent with that advice, unless the terms of the electricity-related contract differ materially from the proposed contract presented under subsection (2B).
(3)
Replace section 161D(3)(e) with:
(e)
whether to recommend the making of regulations under section 84B in accordance with section 84C.
(4)
Repeal section 161D(3A).
(5)
In section 161D(6), delete “if it is prescribed as an eligible industrial activity”
.
(6)
In section 161D(7), delete “if an activity specified in a notice made under subsection (1)(a) is subsequently prescribed as an eligible industrial activity,”
.
69 Section 161F amended (When projected data may be provided)
Replace section 161F(6) with:
(6)
The notice must require, but is not limited to, the information described in section 161D(1)(e) in respect of the first financial year of operation.
70 New section 162AAA inserted (Order in Council adding further activity to Schedule 3)
Before section 162, insert:
162AAA Order in Council adding further activity to Schedule 3
(1)
The Governor-General may, by Order in Council, in accordance with a recommendation of the Minister, amend Schedule 3 by adding a further activity to that schedule, other than an activity described in subsection (4).
(2)
See sections 3A and 3B for consultation requirements that apply to the making of an Order in Council under subsection (1).
(3)
Before recommending the making of an Order in Council, the Minister—
(a)
must be satisfied that—
(i)
adding the further activity is consistent with the purpose of this Act, and in particular the purpose of the emissions trading scheme; and
(ii)
the further activity can be described with sufficient clarity that persons can readily determine whether they are participants; and
(b)
must consider the expected costs and benefits of adding the further activity.
(4)
An order under this section must not add to Schedule 3 any activity that results in the inclusion of biogenic methane, nitrous oxide, or carbon dioxide greenhouse gases from the agriculture sector, as reported in the New Zealand Greenhouse Gas Inventory.
(5)
An order under this section commences on 1 January of any year following the making of the order. However, the commencement date must be at least 1 year after the date that the making of the order is notified in the Gazette.
(6)
An order under this section—
(a)
is secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements); and
(b)
must be confirmed by an Act (see subpart 3 of Part 5 of the Legislation Act 2019).
71 Section 162 amended (Order in Council adding further activity to Part 2 of Schedule 4)
(1)
In the heading to section 162, replace “Part 2”
with “Parts 2 and 5”
.
(2)
In section 162(1), after “2”
, insert “or 5”
.
72 New section 166A inserted (Interest for late payment of fees or charges)
After section 166, insert:
166A Interest for late payment of fees or charges
(1)
This section applies if—
(a)
a person is liable to pay any prescribed fees or charges; and
(b)
the person has not paid the fees or charges by the date on which the fees or charges were due.
(2)
If this section applies, the person is liable to pay interest on the full amount of the fees or charges—
(a)
at the rate prescribed by the Governor-General by Order in Council; and
(b)
for the period from the date by which the fees or charges were due to be paid until the fees or charges and any interest due have been paid in full.
(3)
Despite anything in this section, the EPA may remit any amount of interest that has accrued under this section if the EPA is satisfied that—
(a)
the failure of the person to comply with the requirement to pay the fees or charges arises as a result of an event or a circumstance beyond the control of that person; and
(b)
as a consequence of that event or circumstance, the person has a reasonable justification or excuse for the non-compliance; and
(c)
the person corrected the failure to comply as soon as practicable.
(4)
For the purposes of subsection (3), section 137(5) to (7) applies with any necessary modifications.
(5)
An order under subsection (2)(a) is secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements).
73 Section 167 amended (Regulations relating to fees and charges)
In section 167(3)(c), after “third parties”
, insert “, including the costs of debt collection agencies used to assist in the collection of fees and charges payable under regulations made under this section”
.
74 Section 168 amended (Other regulations)
(1)
In section 168(1)(m), after “2”
, insert “or 5”
.
(2)
After section 168(1)(n)(iii), insert:
(iv)
Part 5 of Schedule 4; and
75 Section 178 amended (Recovery of fees or charges)
After section 178(2), insert:
(3)
The costs of collecting, or assisting in the collection of, any fees or charges that are payable may be recovered in accordance with regulations from the person liable to pay the fee or charge.
Subpart 8—Amendments to Part 5
76 Section 179 amended (Forest land to be treated as deforested in certain cases)
(1)
After section 179(2), insert:
(2A)
A participant in post-1989 forestry activities, a landowner of pre-1990 forest land, or a person that would otherwise be treated as the participant in a pre-1990 forestry activity under section 180(2) (the forester) may apply to the EPA for a resetting of the relevant time frame in subsection (1) and the EPA must approve the application and reset the time frame if satisfied that—
(a)
the land—
(i)
is already subject to a relevant time frame under subsection (1); and
(ii)
has been cleared due to an event outside of the forester’s control (the subsequent clearing event); and
(b)
the application was made before the next relevant time frame applied; and
(c)
the application was submitted in the prescribed form and was accompanied by the prescribed information and any prescribed fee.
(2B)
If a reset application is approved, the deforestation time frames (4 years, 10 years, or 20 years after clearing) begin from when the subsequent clearing event occurred.
(2)
Replace section 179(3) with:
(3)
If forest land is to be treated as deforested under subsection (1),—
(a)
the deforestation is to be treated as having been carried out 4 years, 10 years, or 20 years after the clearing of the forest species, as the case may be, unless paragraph (b) applies:
(b)
in the case of a time frame reset under subsection (2A), the deforestation is to be treated as having been carried out 4 years, 10 years, or 20 years after the subsequent clearing event:
(c)
the liability in respect of the deforestation must be calculated,—
(i)
for paragraph (a), by reference to the age and forest species of the trees cleared 4 years, 10 years, or 20 years earlier, as the case may be:
(ii)
for paragraph (b), by reference to the trees that were cleared from the land at the first clearance (rather than the subsequent clearance outside the person’s control):
(d)
however, if an extension is granted under section 179B,—
(i)
the periods specified in paragraphs (a) and (b) must be adjusted by the period of the extension (for example, to 7 years, 13 years, or 23 years after the clearing of the forest species, as the case may be for an extension of 3 years):
(ii)
the periods specified in paragraph (c)(i) must be adjusted by the period of the extension (for example, to 7 years, 13 years, or 23 years earlier, as the case may be for an extension of 3 years).
(3)
After section 179(4), insert:
(5)
The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations for either or both of the following purposes:
(a)
prescribing what constitutes a subsequent clearance event for the purposes of subsection (2A):
(b)
prescribing requirements necessary to implement the resetting of deforestation time frames.
(6)
Regulations under subsection (5) are secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements).
(7)
See section 179B for the EPA’s power to extend the time frames specified in subsection (1).
77 Section 179A amended (Forest land may not be treated as deforested in certain cases)
After section 179A(5), insert:
(6)
Forest land that is cleared may not be treated as deforested for the purposes of this Act during the period of an extension granted for the land under section 179B.
78 New sections 179B and 179C inserted
After section 179A, insert:
179B Power to extend forest re-establishment time frames
(1)
The EPA may, on application by a person, extend the forest re-establishment time frames specified in sections 179(1) and 193J(2), and the offset dates specified in sections 181G(5)(a) and 192C(2)(g), by up to 3 years if satisfied that the relevant person’s forest land, P89 offsetting (approved) land, or P90 area 2 (approved) land is located in an area significantly affected by a disruption event.
(2)
The application must be—
(a)
in the form and manner prescribed by the EPA under section 90; and
(b)
signed by the applicant; and
(c)
be accompanied by the prescribed information; and
(d)
be accompanied by the prescribed fee; and
(e)
be submitted before the next time frame in section 179 that would have applied to the land if the extension had not been approved.
(3)
In this section,—
relevant person means—
(a)
the owner of the land; or
(b)
a person who, if an activity listed in Part 1 of Schedule 3 were carried out on the land, would be treated as the person carrying out the activity under section 180(2); or
(c)
in relation to P90 offsetting land, the landowner or the person who would be treated as the person carrying out the activity under section 180(2); or
(d)
a post-1989 forestry participant
significantly affected, in relation to forest land, means 1 or more of the following:
(a)
the land has been materially physically disrupted (for example, by slips or silt deposits):
(b)
the infrastructure needed to support the establishment of forest species on the land (for example, fences) has been materially damaged:
(c)
access to the land has been materially disrupted (for example, by the need to carry out health and safety assessments before allowing access for workers, or due to damage to roads providing access to the land):
(d)
the planting or establishment of forest species on the land has been materially disrupted, delayed, or limited, in particular by 1 or more of the following:
(i)
damage to young trees (either planted or located on the land, or located elsewhere and damaged by a disruption event, and purchased for the purpose of planting on the land):
(ii)
damage to, or shortages in, the stock of young trees available for purchase for planting on the land:
(iii)
delays (other than minor delays) in the delivery of young trees for planting on the land, or the planting of young trees once delivered:
(iv)
delays in the removal of wind-thrown or mortally damaged trees before land can be prepared for planting:
(v)
any combination of the matters in subparagraphs (i) to (iv):
(e)
the relevant person has been affected in a way prescribed in regulations made under section 179C.
179C Regulations for extension due to disruptions
(1)
The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations for 1 or more of the following purposes in section 179B:
(a)
prescribing, or providing for what constitutes, a disruption event for the purpose of that section:
(b)
authorising the EPA to determine that a disruption event that is similar in kind to any prescribed or provided for by the regulations is a disruption event for the purpose of that section:
(c)
prescribing requirements relating to matters referred to in section 179B(2)(b) to (e).
(2)
Regulations made under this section are secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements).
79 Section 181B amended (Criteria for P90 offset application)
(1)
After section 181B(1), insert:
(1A)
The EPA must notify the applicant of the outcome of a P90 offset application.
(2)
After section 181B(2)(b)(i)(B), insert:
(C)
would be forest land that was established by direct planting activities, including direct seeding, but excluding natural forest regeneration:
(3)
After section 181B(2)(b)(ii)(B), insert:
(C)
was established by direct planting activities, including direct seeding, but excluding natural forest regeneration:
(4)
Replace section 181B(2)(f) with:
(f)
the person who has submitted a P90 offset application in respect of land in area 2 would be eligible to be a participant under section 57 if the person were carrying out an activity listed in Part 1 of Schedule 4 on that land; and
80 Section 181C amended (Effect of approval of P90 offset application)
(1)
In section 181C(2)(b)(i), after “surrender”
, insert “or repay”
.
(2)
In section 181C(4)(a) and (b), after “surrendered”
, insert “or repaid”
.
(3)
In section 181C(4)(b), replace “participant”
with “applicant”
.
81 Section 181D amended (Effect of P90 offset application being declined)
In section 181D(2)(a), after “surrender”
, insert “or repay”
in each place.
82 Section 181J amended (Effect of approval of application to add area 2 (approved) land)
(1)
After section 181J(1), insert:
(1A)
The EPA must notify the applicant of the approval.
(2)
In section 181J(2)(a)(i), after “surrender”
, insert “or repay”
.
(3)
In section 181J(4)(a) and (b), after “surrendered”
, insert “or repaid”
.
83 Section 181N amended (Effect on P90 offset date)
In section 181N(3)(a), after “surrender”
, insert “or repay”
.
84 Section 181O amended (Reimbursement of surrendered allocation)
(1)
In section 181O(1)(a), after “surrendered”
, insert “or repaid”
.
(2)
In section 181O(2), after “surrendered”
, insert “or repaid”
.
85 Section 181R amended (Clearing before required equivalence date)
(1)
In section 181R(1)(b)(i), after “surrender”
, insert “or repay”
.
(2)
After section 181R(1)(b)(iii), insert:
(iv)
must notify the EPA of the date on which the clearing occurred within 20 working days after that date.
(3)
In section 181R(2), after “surrender”
, insert “or repay”
in each place.
(4)
In section 181R(3), after “surrendered”
, insert “or repaid”
.
(5)
In section 181R(3), item a of the formula, replace “area 1 (approved) land”
with “area 2 (approved) land”
.
(6)
In section 181R(5), after “surrender”
, insert “or repay”
.
(7)
After section 181R(5), insert:
(5A)
A notice under subsection (1)(b)(iv) must—
(a)
be in the prescribed form; and
(b)
contain—
(i)
the name of the owner of the affected land; and
(ii)
the details of the clearance of the land; and
(iii)
if the person already has 1 or more holding accounts, the account number of the holding account that the person wishes to use for the purpose of the emissions return under subsection (1)(b)(ii).
86 Section 181S amended (Deforestation before required equivalence date)
(1)
In section 181S(1)(b)(ii), after “surrender”
, insert “or repay”
in each place.
(2)
In section 181S(2), after “surrendered”
, insert “or repaid”
.
(3)
In section 181S(2), item a of the formula, replace “area 1 (approved) land”
with “area 2 (approved) land”
.
(4)
In section 181S(4), after “surrender”
, insert “or repay”
.
87 Section 181V amended (EPA to give information on request)
In section 181V(3), definition of owner, replace “or has previously owned it”
with “or owned the land immediately before the offset application date”
.
88 Section 182A amended (Conditions on registration as participant in certain activities of standard or permanent forestry in respect of post-1989 forest land)
Replace section 182A(2) with:
(2)
A person may not be registered as a participant under section 57 in respect of an activity of standard forestry or permanent forestry in relation to exempt land unless—
(a)
the land has been deforested and has remained deforested for at least 9 years; or
(b)
the person—
(i)
has submitted an emissions return to the EPA that meets the requirements of subsection (2A); and
(ii)
has surrendered, within 60 working days after the EPA gave the person a notice requiring the surrender, the number of units listed in the assessment under subsection (2A)(b); and
(iii)
complies with subsection (1), if applicable.
(2A)
The emissions return must—
(a)
record the emissions from the deforestation of the land—
(i)
that would have been required to have been recorded in an annual emissions return under section 65 if the land had not been declared to be exempt land; and
(ii)
calculated in accordance with the methodology or methodologies prescribed for the deforestation activity listed in Part 1 of Schedule 3 that were applicable when the land was deforested; and
(b)
contain an assessment of the liability to surrender units that would have arisen in relation to the deforestation if the land had not been declared to be exempt land; and
(c)
be accompanied by the prescribed fee (if any) and any other prescribed information; and
(d)
be signed by the person submitting the application for registration.
89 Section 184D amended (Total liability or entitlement has effect, and unit balance updated, when emissions return submitted)
Replace section 184D(3) with:
(3)
The person submitting the final forestry emissions return—
(a)
is entitled to be reimbursed (instead of to receive) units, for a CAA1 covered by the return, to the extent that they have surrendered more units under provisional forestry emissions returns than required to meet their net liability for that CAA1; or
(b)
is liable to repay (instead of to surrender) units, for a CAA1 covered by the return, to the extent that they have received more units under provisional forestry emissions returns than their net entitlement for that CAA1.
(3A)
The person submitting the final forestry return is required to report separately the sum of units to be reimbursed or repaid for the following:
(a)
CAA1s to which subsection (3) applies (as 2 separate values):
(b)
CAA1s to which subsection (3) does not apply.
90 Section 187 amended (Transmission of interest in post-1989 forest land)
(1)
After section 187(3), insert:
(3A)
A transferee who does not have a holding account must—
(a)
open a holding account under section 18A before the notice of transmission is submitted; and
(b)
supply the account number of the holding account to the EPA with the notice required by subsection (4).
(2)
In section 187(4)(a), replace “20”
with “30”
.
(3)
Replace section 187(7) with:
(7)
However, if the transmitted interest is part of a deceased participant’s estate,—
(a)
the executor or administrator of the estate acts as the representative of the deceased participant; and
(b)
subsections (4) to (6) and section 187A do not apply (so that no notice, final forestry emissions return, or new unit balance report is required); and
(c)
the EPA must amend the register kept under section 57 and the records of carbon accounting areas kept under section 182C to record that the executor or administrator is acting as the participant’s representative; and
(d)
in every case, the executor or administrator of more than 1 deceased participant’s estate is treated under this Act as if they represented a separate participant for each of those estates; and
(e)
the effective date of transmission is the date on which the interest is transferred to the successor, and on and from that date subsections (4) to (6) apply to the successor.
91 Section 187B amended (EPA may act if person fails to give notice of transmitted interest)
In section 187B(3)(b), replace “90th”
with “20th”
.
92 Section 189 amended (Application to change activity on post-1989 forest land)
(1)
Repeal section 189(1)(b) and (4) and the cross-heading above section 189(4).
(2)
In section 189(2), delete “(or the net number of units transferred for PFSI land)”
.
93 Section 189A amended (Criteria to change activity on post-1989 forest land)
Repeal section 189A(2)(c) and (3)(b).
94 Section 189B amended (Approval of application to change activity on post-1989 forest land)
Repeal section 189B(3)(b) and (c).
95 Sections 189C to 189E repealed
Repeal sections 189C to 189E.
96 Section 189G amended (Liability to surrender units on transfer from standard forestry in carbon accounting area (averaging) to permanent forestry)
Repeal section 189G(1)(c)(i).
97 Section 190A amended (Restriction on ceasing to be registered for permanent forestry)
After section 190A(1)(f), insert:
(g)
if the EPA is satisfied under section 186D that a person is not carrying out, and has never carried out, the activity of standard or permanent forestry in a carbon accounting area, or part of an accounting area, for which they are registered:
98 Section 190KZ replaced (Extension of permit duration)
Replace section 190KZ with:
190KZ Extension of permit duration
The EPA may accept an ETS application using a LUC class 6 land permit until the close of 31 December of the year that is 6 full years after the year in which the permit is issued if the EPA is satisfied that—
(a)
a temporary adverse weather event or similar circumstances materially disrupted the applicant’s ability to register forest land before the expiry date; and
(b)
the applicant notified the EPA before the expiry date in order to rely on the permit after the expiry date and until that 31 December date.
99 Section 191B amended (Averaging accounting applies to carbon accounting areas (averaging))
In section 191B(2)(b)(i), replace “previous carbon accounting area”
with “carbon accounting area immediately before the constitution date”
.
100 Section 191D amended (Carbon stock measures for land)
Replace section 191D(3)(b) with:
(b)
if the land has a subsequent rotation forest,—
(i)
the prior clearing age, unless subparagraph (ii) applies:
(ii)
if provided for in regulations made under section 191I, the current age of the forest species on the land if it is different to the prior clearing age,—
101 Section 191E amended (Entitlement to receive units)
In section 191E(2)(b), replace “second”
with “subsequent”
.
102 Section 191I amended (Regulations for averaging)
After section 191I(1)(d), insert:
(da)
for the purpose of determining the NACS for a subsequent rotation forest, applying the current age of the forest species on the land if it is greater than the prior clearing age (see section 191D(3)(b)(ii)):
103 Section 192A amended (Application to offset land for land in carbon accounting area (averaging))
Replace section 192A(2)(d) with:
(d)
include in that return a new unit balance report that covers 1 or more carbon accounting areas (each a CAA2) for each CAA1 and that consists of the land specified under paragraph (b), calculated as follows:
(i)
if a single CAA2 is proposed to be used to offset the CAA1s, the opening unit balance of the CAA2 (v) is calculated in accordance with the following formula:
v = u
where—
- u
is the sum of the unit balance of all the CAA1s in the emissions return required by paragraph (c):
(ii)
if more than 1 CAA2 is proposed to be used to offset the CAA1s, the opening unit balance of each CAA2 (v) is calculated in accordance with the following formula:
vn = u × (an ÷ b)
where—
- vn
is the opening unit balance of a specific CAA2
- u
is the sum of the unit balance of all the CAA1s in the emissions return required by paragraph (c)
- an
is the area in a specific CAA2
- b
is the sum of the area (in hectares) of all CAA1s in the emissions return required by paragraph (c); and
104 Section 192B amended (Criteria for P89 offset application)
(1)
After section 192B(1), insert:
(1A)
The EPA must notify the applicant of the outcome of a P89 offset application.
(2)
After section 192B(2)(c)(i)(B), insert:
(C)
would be forest land that was established by direct planting activities, including direct seeding, but excluding natural forest regeneration:
(3)
After section 192B(2)(c)(ii)(B), insert:
(C)
was established by direct planting activities, including direct seeding, but excluding natural forest regeneration:
105 Section 192Q amended (Remedial action: land substitution)
Replace section 192Q(3)(e)(iii) and (iv) with:
(iii)
calculates the opening unit balance for the remaining CAA6s and substitute CAA6s (v) in accordance with the following formula, which applies even if a CAA6 is formed from land in 1 or more CAA5s and from other land:
vn = u × (an ÷ b)
where—
- vn
is the opening unit balance of a specific CAA6
- u
is the sum of the unit balance of all CAA5s in the emissions return required by paragraph (d)
- an
is the area in a specific CAA6
- b
is the sum of the area (in hectares) of all CAA5s in the emissions return required by paragraph (d); and
106 Section 193M replaced (Carbon recovery criteria)
Replace section 193M with:
193M Carbon recovery criteria
Temporary adverse event land achieves carbon recovery when the carbon stock of all the temporary adverse event land (determined in accordance with regulations made under section 193R) is equal to the pre-event carbon stock rate.
107 Section 194 amended (Input returns may be submitted for certain emissions returns for forestry activities)
Repeal section 194(3).
108 Section 194B amended (Regulations for input returns)
(1)
Repeal section 194B(1)(c) and (d).
(2)
In section 194B(1)(e), replace “paragraphs (b) to (d)”
with “paragraph (b)”
.
109 Section 195 amended (Notification of status of forest land)
Replace section 195(2)(a) with:
(a)
the following types of land:
(i)
pre-1990 forest land:
(ii)
P90 offsetting land:
(iii)
post-1989 forest land in respect of which a person is registered as a participant:
Subpart 9—Amendments to schedules
110 Schedule 1AA amended
(1)
In Schedule 1AA, Part 2, repeal clause 31.
(2)
In Schedule 1AA,—
(a)
insert the Part set out in Schedule 1 of this Act as the last Part; and
(b)
make all necessary consequential amendments.
111 Schedule 3 amended
In Schedule 3, Part 3, after subpart 2, insert:
Subpart 3
(applies on and after date fixed by Order in Council)
Importing carbon dioxide (CO2) where any prescribed threshold is met.
112 Schedule 4 amended
In Schedule 4, after Part 4, insert:
Part 5 Carbon removal activities
(applies on and after date fixed by Order in Council)
Using technologies, practices, and approaches that provide enduring storage of carbon dioxide from the atmosphere.
Part 2 Consequential amendments
113 Consequential amendments
Amend the legislation specified in Schedule 2 as set out in that schedule.
Schedule 1 New Part 8 inserted into Schedule 1AA
s 110(2)
Part 8 Provisions relating to Climate Change Response Amendment Act 2026
55 Interpretation
In this Part,—
amendment Act means the Climate Change Response Amendment Act 2026
commencement date means the date on which the amendment Act commences
commencement year means the year in which the amendment Act commences
proposed adaptation plan means a plan that is consistent with the purpose set out in section 5ZZ, and that a territorial authority, at the commencement date,—
(a)
has in preparation; but
(b)
has not made or adopted.
56 Transitional exemption from prescribing limits and price control settings
The requirement in section 30GB(3) to ensure that regulations prescribe limits and price control settings for each of the next 5 calendar years does not apply in the year following the commencement year.
57 Temporary exemption from requirement to comply with section 86I(1)
A unit product market that fails to report daily trading information in accordance with section 86I(1) during the month following the commencement date is not liable to an administrative penalty for that contravention.
58 Limited continuation of Minister’s power under section 161A(3)
(1)
Despite section 161A(3) (as replaced by section 67(1) of the amendment Act), the Minister may recommend the making of regulations under section 161A(1) that have the effect of removing an activity from the regulations if,—
(a)
before the commencement date, the Minister issues a notice under section 161D requiring a person undertaking the activity to provide projected information in accordance with section 161F(2); and
(b)
the person then provides information on an actual basis under section 161F(5) in relation to the activity; and
(c)
on the basis of the information provided under paragraph (b), the Minister is no longer satisfied of either or both of the matters described in section 161A(2)(b).
(2)
To avoid doubt, section 161A(5) (as replaced by section 67(4) of the amendment Act) applies to regulations made on a recommendation under subclause (1).
59 Minister may approve proposed adaptation plan as adaptation plan
(1)
The Minister may approve a proposed adaptation plan if—
(a)
a territorial authority has, by a decision under section 76 of the Local Government Act 2002,—
(i)
adopted the proposed adaptation plan; and
(ii)
requested the approval within 2 years after the commencement date; and
(b)
a territorial authority has, at the commencement date,—
(i)
substantively advanced adaptation planning in the location that is the subject of the plan; and
(ii)
substantively advanced or completed consultation on the proposed adaptation plan; and
(c)
the proposed adaptation plan otherwise meets the requirements of section 5ZZH.
(2)
A proposed adaptation plan approved under this clause has effect as if it were an adaptation plan prepared and adopted under this Act.
(3)
Section 5ZZH(3) to (5) applies to a proposed adaptation plan approved under this clause as if it were an existing plan.
Schedule 2 Consequential amendments
s 113
Part 1Consequential amendments to Acts
Civil Defence Emergency Management Act 2002 (2002 No 33)
Replace section 53(2) with:
(2)
A civil defence emergency management group must ensure that its civil defence emergency management group plan—
(a)
has regard to—
(i)
the guidelines, codes, or technical standards issued by the Director under this Act; and
(ii)
any current adaptation plan adopted under the Climate Change Response Act 2002 that is within the Group’s area; and
(b)
for aspects of the plan that relate to strategic planning for recovery, gives effect to any current adaptation plan adopted under the Climate Change Response Act 2002 that is within the Group’s area.
Fair Trading Act 1986 (1986 No 121)
In section 48P(6), definition of financial product, after paragraph (b)(ii), insert:
(iii)
includes a unit, as defined in section 4(1) of the Climate Change Response Act 2002, in a unit market participant’s transaction
Financial Markets Authority Act 2011 (2011 No 5)
In section 4(1), definition of financial markets participant, after paragraph (b)(vi), insert:
(vii)
a unit market participant (within the meaning of section 4(1) of the Climate Change Response Act 2002); and
In Schedule 1, Part 1, insert in its appropriate alphabetical order:
Subpart 2B of Part 4 of the Climate Change Response Act 2002
Financial Markets Conduct Act 2013 (2013 No 69)
In section 18, definition of financial product, after paragraph (b), insert:
(c)
includes, for the purposes of this Part and section 464, a unit, as defined in section 4(1) of the Climate Change Response Act 2002, in a unit market participant’s transaction
After section 385(3)(f), insert:
(g)
sections 86N and 86P of the Climate Change Response Act 2002.
Land Transport Management Act 2003 (2003 No 118)
After section 14(c), insert:
(d)
have had regard to any current adaptation plan adopted under the Climate Change Response Act 2002.
Legislation Act 2019 (2019 No 58)
In Schedule 4, Part 1, insert in its appropriate alphabetical order:
| Climate Change Response Act 2002 | 162AAA(1) |
Local Government Act 2002 (2002 No 84)
After section 93(7), insert:
(7A)
A local authority must have regard to current adaptation plans adopted under the Climate Change Response Act 2002 when preparing a long-term plan.
After section 97(3)(e), insert:
(f)
to alter significantly the intended level of service provision for any significant activity undertaken by or on behalf of the local authority, if—
(i)
that alteration was identified in an adaptation plan adopted under the Climate Change Response Act 2002 as being needed if a specific event or trigger point occurs; and
(ii)
that event occurs within 3 years of the adaptation plan being adopted.
After section 101A(3)(a)(ii), insert:
(iia)
the expected expenditure on the implementation of any current adaptation plan adopted under the Climate Change Response Act 2002; and
After section 101B(3)(d), insert:
(da)
implement any current adaptation plan adopted under the Climate Change Response Act 2002; and
Local Government Official Information and Meetings Act 1987 (1987 No 174)
After section 44B(2)(a), insert:
(aa)
whether any part of the land is in a priority location where an adaptation plan is required to be adopted under the Climate Change Response Act 2002; and
(ab)
whether any part of the land is subject to a current adaptation plan adopted under the Climate Change Response Act 2002; and
Local Government (Water Services) Act 2025 (2025 No 42)
In section 52(1)(q), replace “resource management planning and land use planning”
with “resource management planning, land use planning, and climate change adaptation planning (where relevant)”
.
In section 227(1)(b), replace “resource management planning and land use planning”
with “resource management planning, land use planning, and climate change adaptation planning”
.
After section 235(1), insert:
(1A)
The territorial authority must, when preparing a draft water services strategy, have regard to any relevant adaptation plan adopted under the Climate Change Response Act 2002.
After section 236(1), insert:
(1A)
The water organisation must, when preparing a draft water services strategy, have regard to any relevant adaptation plan adopted under the Climate Change Response Act 2002.
In section 236(6)(a), replace “resource management planning and land use planning”
with “resource management planning, land use planning, and climate change adaptation planning (where relevant)”
.
In Schedule 2, replace clause 5(2)(b) with:
(b)
land use planning, resource management planning (including consent processes), and climate change adaptation planning (where relevant); and
In Schedule 3, in clause 2(1)(g), replace “resource management planning and land use planning”
with “resource management planning, land use planning, and climate change adaptation planning (where relevant)”
.
Part 2Consequential amendments to secondary legislation
Climate Change (Forestry) Regulations 2022 (SL 2022/266)
In regulation 11(1), replace “189E, 189F,”
with “189F”
.
In regulation 11(3), replace “189E(2), 189F(2),”
with “189F(2)”
.
In the heading to regulation 90, replace “189E, 189F,”
with “189F”
.
In regulation 90(1), delete “189E or”
.
In regulation 90(1), replace “189E(3), 189F(3),”
with “189F(3)”
.
In the heading to regulation 91, replace “189E, 189F,”
with “189F”
.
In regulation 91(1)(a), delete “189E or”
.
In the heading to regulation 92, replace “189E, 189F,”
with “189F”
.
In regulation 92(1)(a), delete “189E or”
.
Revoke regulation 114.
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