Proposed regulations for synthetic greenhouse gases in the NZETS 9 October 2012, Auckland

1. Proposed regulations for synthetic greenhouse gases in the NZETS 9 October 2012, Auckland

2. Meeting objective For you to understand: • The proposed regulations. • The difference between the regulations and the Bill • How the changes will effect you. • What the process going forward will be.

3. Workshop agenda

4. Background • The Government has announced a number of changes to the New Zealand Emissions Trading Scheme (NZ ETS), which will be implemented through the Bill. The Bill has been tabled in the House and referred to the Finance and Expenditure Select Committee. • Most of the changes flow out of the Bill

5. Assessment Criteria • Balance the need for reducing emissions with administration and compliance costs

6. Proposed Regulations

7. Part 1: The Goods Levy Formula Average refrigerant charge x GWP x carbon price = Levy

8. Air-conditioning

9. Refrigeration

10. Other categories • Furniture incorporating freezer/refrigerator display cabinets • Heat pump • Water coolers • Dehumidifiers • Ice cream makers • Vending machines • Truck containers • Truck trailers • Fishing vessels The approach under the ETS was to include everything unless it was exempt. Under the levy it is the opposite, unless the product is mentioned then there is no cost. The current exemptions i.e. asthma inhalers and those importing products for household use will still apply. Other goods not covered are aerosols (Customs has advised that it is not practical) and fire extinguishers (as this is safety equipment).

11. Impact of levy • Reduce administration costs, as each importer will not need to identify exact amounts of HFC/PFC in their products. • Diminishes the costs for the collection (Customs) and enforcement (Environmental Protection Authority) agencies, as collection and verification of exact refrigerant charges would be highly administratively intensive. • Raises approximation issues • Assumed relationship between refrigerant charges and cooling capacity (for the air-conditioning importers) or internal volume (for household refrigerators and freezers importers). It is assumed that the larger the cooling capacity or internal volume, the more SGG contained in the equipment. This may not always be the case.

12. The HFC/PFC levy – Consultation questions • Do you agree with the proposed motor vehicle and goods classes? • If not, what alternative classes would you propose instead? • Do you agree with the Government’s estimated impacts of its proposed classes? • What other impacts and costs have not been identified/considered? • How would these impacts and costs differ under an alternative approach? • Do you agree with the proposed average refrigerant charges? • If not, what alternative average refrigerant charges would you propose instead? • What do you think the impacts and costs of the proposed average refrigerant charges would be? • Do you agree with replicating the existing exemptions in the NZ ETS with the levy? • Do you agree with the proposed reporting requirements? For all your answers please explain why and provide evidence of the impacts and costs.

13. Part 2: Exporting HFC/PFC • Export criteria: • all the components of the bulk HFC/PFC exported (or if the HFC/PFC was imported in goods, the goods themselves) were imported after 31 December 2012; or • if the person exporting bulk HFC/PFC or HFC/PFC contained in goods is a manager of a product stewardship scheme accredited under the Waste Minimisation Act 2008,

14. Options for enforcement • Self-assessment model • Verification of information

15. Exporting HFC/PFC • Add the levy categories as default charges for exporting goods

16. Exporting HFC and PFC – Consultation questions • Do you agree with the proposed criteria? • If not, what alternative criteria would you propose instead? • What option for enforcement do you prefer? (Self-assessment model or verification of information) • Do you agree with the Government’s estimated impacts? • What other impacts and costs have not been identified/considered? For all your answers please explain why and provide evidence of the impacts and costs.

17. New Zealand is moving to the IPCC’s Fourth Assessment Report. Global warming potentials will increase for most refrigerants: HFC-134a: 1300  1430 R404A: 3260  3920 R410A: 1730  2090 Part 4: Global Warming Potentials

18. New refrigerant gases • HFC-152 • HFC-161 • HFC-245fa • HFC-236ea • HFC-236cb • PFC-9-1-18 • HFC-365mfc. Removing exemption for HFC-365mfc and HFC-245fa

19. Updating global warming potentials – Consultation questions • Do you agree with the proposal to include these new HFC/PFCs? • Do you agree with the Government’s estimated impacts? • What other impacts and costs have not been identified/considered? For all your answers please explain why and provide evidence of the impacts and costs.

20. What does this mean for you?

21. So what does this all look like? ANY WILFUL RELEASE IS ILLEGAL

22. What’s next?

23. Introducing the levy will happen through an Act change

24. Making a submission The Ministry for the Environment welcomes written submissions on the proposed regulations for synthetic greenhouse gases to be implemented as a result of the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill. Submissions are due by 5.00pm on 15 October 2012. Please send your submission by email to: climatechange@mfe.govt.nz with the subject field ‘SSG submission’. ETS Operational Policy Team Ministry for the Environment PO Box 10362 Wellington 6143

25. Submissions will be analysed by the Ministry for the Environment and reported to the Minister for Climate Change Issues for final decisions. Changes to the regulations are expected to be made before 31 December 2012 and come into force from 1 January 2013. Updates about the process will be provided on the climate change website: www.climatechange.govt.nz. Next steps

26. Questions?0800 CLIMATEclimatechange@mfe.govt.nz