Climate Change Response (Emissions Trading Reform) Amendment Act 2020

Coat of Arms of New Zealand

Climate Change Response (Emissions Trading Reform) Amendment Act 2020

Public Act
 
2020 No 22
Date of assent
 
22 June 2020
Commencement
 
see section 2

Contents

1Title
2Commencement
3Principal Act
4Section 2A amended (Application of Schedules 3 and 4)
5Sections 2B and 2C replaced
2BOrders in Council in relation to subparts 2 and 4 of Part 5 of Schedule 3 (Agriculture)
2CEffect of overlapping application of subparts of Part 5 of Schedule 3 (Agriculture)
6Section 3 amended (Purpose)
7Section 3A amended (Treaty of Waitangi (Te Tiriti o Waitangi))
8New section 3B inserted (Consultation about certain regulations, orders, and notices)
3BConsultation about certain regulations, orders, and notices
9Section 4 amended (Interpretation)
10New section 4AA inserted (Greenhouse gas definition may be amended to add gases)
4AAGreenhouse gas definition may be amended to add gases
11Section 5D amended (Membership of Commission)
12Section 5J amended (Commission’s functions)
13Section 5N amended (Consultation)
14Section 5ZA amended (Commission to advise Minister)
15Section 5ZG amended (Requirement for emissions reduction plan)
16Section 5ZH amended (Commission to advise on emissions reduction plans)
17Section 5ZI amended (Minister to prepare and make emissions reduction plan publicly available)
18Section 5ZL amended (Commission to report at end of emissions budget period)
19New subpart 6 of Part 1B inserted
5ZOARecommendations about limits and price control settings for units
5ZOBRecommendations about decreased or increased phase-out rates
20Section 6 amended (Minister of Finance may direct Registrar regarding establishment of Crown holding accounts and carry out trading activities with respect to units)
21Section 6A amended (Minister’s power to sell by auction)
22Section 7 amended (Minister of Finance may give directions to Registrar regarding accounts and units)
23Section 9 amended (Minister of Finance may obtain information from inventory agency and Registrar)
24Section 10 replaced (Purpose of Registry)
10Purpose of Registry
25Section 13 amended (Registrar may refuse access to, or suspend operation of, Registry)
26Section 14 replaced (Registrar must give effect to directions)
14Registrar must give effect to directions
27Section 15 amended (Registrar to allocate unique numbers)
28Sections 16 and 17 repealed
29Section 18 amended (Form and content of unit register)
30Section 18B amended (Closing holding accounts)
31Section 18C amended (Transfer of units)
32Section 18CA replaced (Effect of surrender, retirement, cancellation, and conversion)
18CAEffect of surrender and cancellation
33Sections 18CB, 18CC, and 18CD repealed
34Section 18D amended (Succession)
35Section 19 repealed (Retirement of Kyoto units by the Crown)
36Section 20 amended (Transactions must be registered)
37Section 21 repealed (Registration procedure for Kyoto units)
38Section 21AA amended (Registration procedure for New Zealand units and approved overseas units)
39Section 21A amended (Electronic registration)
40Section 21B amended (Defective applications)
41Section 23 repealed (Receiving Kyoto units from overseas registries)
42Section 23A amended (Receiving New Zealand units and approved overseas units from overseas registries)
43Section 24 amended (Priority of registration)
44Section 25 amended (Correction of unit register)
45Section 27 amended (Information accessible by search)
46Section 30A amended (The Crown or Registrar not liable in relation to searches in certain cases)
47Sections 30B to 30D and cross-heading repealed
48Section 30E repealed (Conversion of New Zealand units into designated assigned amount units for sale overseas or cancellation)
49Section 30G amended (Regulations relating to Part 2)
50Sections 30GA to 30H replaced
30GARegulations for auctions to sell New Zealand units
30GBRegulations about limits and price control settings for units
30GCRequirements for regulations about limits and price control settings for units
30GDRegulations for auction monitor
30GESharing information with auction monitor
30GFObligation of confidentiality on auction monitor
30GGOffence for breach of auction monitor’s obligation of confidentiality
30HConsultation and commencement for certain regulations about units and auctions
51Section 30I amended (Incorporation by reference in regulations made under section 30G)
52New section 30IA inserted (Minister must obtain greenhouse gas reductions to match certain excess units)
30IAMinister must obtain greenhouse gas reductions to match certain excess units
53Section 30J amended (Signing false declaration with respect to regulations made under section 30G)
54New subpart 3 of Part 2 inserted
30LMeaning of infringement offence and infringement fee
30MRegulations about infringement offences
30NConsultation and commencement for regulations about infringement offences
30OProceedings for infringement offences
30PAppointment of enforcement officers
30QWhen infringement notice may be issued
30RInfringement notice may be revoked
30SWhat infringement notice must contain
30THow infringement notice may be served
30UPayment of infringement fees
30VReminder notices
55Section 31 amended (Meaning of greenhouse gas)
56Section 32 amended (Primary functions of inventory agency)
57Section 35 amended (Publication)
58Section 36 amended (Authorisation of inspectors)
59Section 48 amended (Signing false declaration in respect of regulations made under section 50)
60Section 49 amended (Reporting)
61Section 50 amended (Regulations)
62Section 51 amended (Incorporation by reference in regulations made under section 50)
63Section 52 amended (Inventory agency must report to Minister on certain matters before certain regulations are made)
64Section 53 repealed (Consequential amendments)
65Section 54 amended (Participants)
66Section 55 amended (Associated persons)
67Section 56 amended (Registration as participant in respect of activities listed in Schedule 3)
68Section 57 amended (Applicant to be registered as participant in respect of activities listed in Schedule 4)
69Section 58 amended (Removal from register of participants in respect of activities listed in Schedule 4)
70Section 59 amended (Removal from register of participants in respect of activities listed in Schedules 3 and 4)
71New section 59A inserted (Removal from register if participant never carried out activity)
59ARemoval from register if participant never carried out activity
72Section 60 amended (Exemptions in respect of activities listed in Schedule 3)
73New sections 60A and 60B inserted
60AExemption for participants in activity listed in Part 1 of Schedule 4
60BIncorporation by reference in order made under section 60 or 60A
74Section 61 amended (Requirement to have holding account)
75Section 63 amended (Liability to surrender units to cover emissions)
76Section 64 amended (Entitlement to receive New Zealand units for removal activities)
77New section 64A inserted (Transfer of units allocated, or entitled to be received or reimbursed, less any units that must be surrendered or repaid)
64ATransfer of units allocated, or entitled to be received or reimbursed, less any units that must be surrendered or repaid
78Section 65 amended (Annual emissions returns)
79Section 68 amended (Issuing New Zealand units)
80Section 69 repealed (Notification of intention regarding New Zealand units)
81Cross-heading above section 70 amended
82Sections 70 to 79 replaced
70Allocation plan issued
83Section 81 amended (Entitlement to provisional allocation for eligible industrial activities)
84Section 83 amended (Annual allocation adjustment)
85New sections 84A to 84C inserted
84ARegulations setting decreased phase-out rates
84BRegulations setting increased phase-out rates
84CProcedure for regulations setting phase-out rates
86Section 85 amended (Allocation of New Zealand units in relation to agriculture)
87Section 85A amended (Temporary suspension of phase-out rates for assistance under sections 81, 83(2), and 85(2))
88Section 86 amended (Applications for allocation of New Zealand units for industry and agriculture)
89Section 86A amended (Provisional allocation to industry in and after 2013)
90Section 86B amended (Decisions on applications for allocations of New Zealand units to industry and agriculture)
91New sections 86BA to 86BC inserted
86BADecisions on applications for allocations of New Zealand units to agriculture
86BBTransfer of allocated units to industry, less any units that must be surrendered or repaid
86BCTransfer of allocated units to agriculture, less any units that must be surrendered or repaid
92Section 86C amended (Reconsideration of allocation decisions)
93Section 86E amended (Minister or EPA or chief executive may require further information for purpose of carrying out functions under subpart)
94Section 87 amended (Functions of EPA)
95Section 88 amended (Directions to EPA)
96Section 89 amended (EPA to publish certain information)
97New section 89A inserted (EPA to publish participant data on emissions and removals)
89AEPA to publish participant data on emissions and removals
98Section 90 amended (EPA may prescribe form of certain documents)
99New section 91A inserted (Correction of unique emissions factors)
91ACorrection of unique emissions factors
100Section 93 amended (Appointment of enforcement officers)
101Section 94 amended (Power to require information)
102Section 95 amended (Power to inquire)
103Section 96 amended (Inquiry before District Court Judge)
104Section 99 amended (Obligation to maintain confidentiality)
105Section 100 amended (Power of entry for investigation)
106Section 104 amended (Information obtained under section 100 or 101 only admissible in proceedings for alleged breach of obligations imposed under this Part and Part 5)
107Section 107 amended (Applications for emissions rulings)
108New section 107A inserted (Insufficient information provided for ruling on entire application)
107AInsufficient information provided for ruling on entire application
109Section 108 amended (Matters in relation to which EPA may decline to make emissions rulings)
110Section 109 amended (Making of emissions rulings)
111Section 116 amended (Effect of emissions rulings)
112Section 117 amended (EPA may publish certain aspects of emissions rulings)
113Section 124 amended (Reimbursement of units by EPA)
114Section 125 replaced (Repayment of units by persons in case of error)
125Repayment of units by persons in case of error
115Section 127 amended (Time bar for amendment of emissions returns)
116Section 129 amended (Offences in relation to failure to comply with various provisions)
117Section 132 amended (Other offences)
118Section 133 amended (Evasion or similar offences)
119Section 143 amended (Evidence in proceedings)
120Section 144 amended (Request for review of decisions)
121Section 148 amended (Giving of notices to EPA)
122Section 150 amended (Formation of consolidated group)
123Section 151 amended (Changes to consolidated groups)
124Section 151A amended (Addition of activities to consolidated groups)
125Section 152 amended (Nominated entities)
126Section 153 amended (Effect of being member of consolidated group)
127Section 154 repealed (Emissions returns by consolidated group in respect of activities in Part 1 of Schedule 4)
128Section 155 amended (Ceasing to be member of consolidated group)
129Section 156 replaced (Effect of ceasing to be member of consolidated group)
156Effect of ceasing to be member of consolidated group
130Section 156A amended (Removal of activities from consolidated groups)
131Section 157 amended (Unincorporated bodies)
132Section 159 amended (Recovery of costs)
133Section 160 amended (Review of operation of emissions trading scheme)
134Section 161 amended (Appointment and conduct of review panel)
135Section 161A amended (Regulations in relation to eligible industrial activities)
136Section 161B repealed (Australian eligible industrial activities)
137Section 161C amended (Other eligible industrial activities)
138Section 161D amended (Power to require information for purposes of allocation to industry)
139Section 161E amended (Requirements in respect of notice given under section 161D)
140Section 161F repealed (Consultation on activities that may be prescribed as eligible industrial activities)
141Section 161G amended (Regulations in relation to eligible agricultural activities)
142Section 162 amended (Regulations adding further activity to Part 2 of Schedule 4)
143Section 163 amended (Regulations relating to methodologies and verifiers)
144Section 166 replaced (Procedure for regulations relating to methodologies, verification, unique emissions factors, and offsetting)
166Consultation and commencement for regulations about methodologies, verifiers, and unique emissions factors
145Section 167 amended (Regulations relating to fees and charges)
146Section 168 amended (Other regulations)
147Section 169 amended (Incorporation by reference in regulations made under section 163, 164, 167, or 168)
148Section 170 replaced (Effect of amendments to, or replacement of, material incorporated by reference in regulations)
170Effect of amendments to, or replacement of, material incorporated by reference in regulations
149Section 172 replaced (Effect of expiry of material incorporated by reference)
172Effect of expiry of material incorporated by reference
150Section 173 amended (Requirement to consult)
151Section 174 amended (Public access to material incorporated by reference)
152Section 175 amended (Application of Legislation Act 2012 to material incorporated by reference)
153Section 178A amended (Option to pay money instead of surrendering units to cover emissions)
154Section 178B amended (Issuing New Zealand units to meet surrender obligations)
155Section 178C replaced (Prohibition on ability to export New Zealand units)
178CFixed price (for option to pay money instead of surrendering, repaying, or reimbursing units)
156Part 5 divided into Parts 5 to 5D and new Part 5 divided into subparts
157Section 179A amended (Forest land may not be treated as deforested in certain cases)
158Section 183 amended (Applications for exemption for land holdings of less than 50 hectares of pre-1990 forest land)
159Section 183A amended (Certain applications not otherwise permitted by section 183)
160New section 183B inserted (Applications for exemption for some Maori land or land with 10 or more owners)
183BApplications for exemption for some Maori land or land with 10 or more owners
161Section 184 amended (Exemptions for deforestation of land with tree weeds)
162Section 186F amended (Regulations relating to offsetting)
163Section 186H amended (Treatment of allocations in respect of pre-1990 forest land that is offset)
164Section 187 amended (Conditions on registration as participant in respect of certain activities relating to post-1989 forest land)
165Section 188 amended (Registration as participant in respect of post-1989 forest land)
166New sections 188B and 188C inserted
188BNotice to forestry participant if their registration added or removed
188CNotice to interested party if forestry participant’s registration added or removed
167Section 189 amended (Emissions returns for post-1989 forest land activities)
168Section 191 amended (Ceasing to be registered as participant in respect of post-1989 forest land)
169New section 191A inserted (If participant has never carried out activity in carbon accounting area)
191AIf participant has never carried out activity in carbon accounting area
170Section 192 amended (Effect of transmission of interest in post-1989 forest land)
171Section 193 amended (Emissions returns in relation to transmitted interests)
172New cross-heading above section 194 inserted
173New sections 194A to 194C and cross-headings inserted
194AInput returns may be submitted for certain emissions returns for forestry activities
194BEPA may do calculations based on input return
194CRegulations for input returns
174Sections 196 and 197 and cross-heading replaced
196Meaning of forestry classification
196AEPA may give forestry classifications to areas of land
196BEffect of forestry classifications
196CChange of forestry classification to correct error
196DChange of forestry classification to update for changes
196EForestry classification with effect before date classification given
196FRegulations for forestry classifications
197Entitlement to units for removals from grant-funded forests
197ARegulations for grant-funded forests
175Section 198 amended (Registration as participant by purchasers of obligation fuel)
176Section 202 amended (Activities added to Part 2 of Schedule 3)
177Section 209 amended (Registration as participant by purchasers of coal or natural gas)
178Section 213 amended (Participant in respect of subpart 4 of Part 5 of Schedule 3)
179New sections 215 and 216 inserted
215Ministers to report on alternative pricing system for farm-level agriculture emissions
216Regulations for voluntary reporting or surrender for animals–farmer or fertiliser–farmer activity
180Section 217 amended (Transitional provision for penalties)
181Section 218 repealed (Transitional provision for voluntary reporting)
182Sections 219 to 222 replaced
219Transitional provision for surrender obligations of certain participants
220Commission to report on progress towards meeting farm-level obligations
183Section 222H amended (Transitional provision for unincorporated bodies)
184Section 233 amended (Rate of synthetic greenhouse gas levy)
185Section 234 repealed (Transitional provision for synthetic greenhouse gas levy)
186Section 236 replaced (Maximum price of carbon for purpose of levy calculation)
236Maximum price of carbon for purpose of levy calculation
187Section 243 amended (Circumstances where levy may be refunded)
188Section 244 amended (Exemptions from payment of synthetic greenhouse gas levy)
189Section 245 amended (Regulations specifying levy rates)
190Section 246 amended (Regulations relating to synthetic greenhouse gas levy)
191Section 247 repealed (Process for making orders and regulations)
192Section 249 amended (Application of section 88 (Directions to EPA))
193Section 252 amended (Enforcement officers)
194Section 257 amended (Power of entry for investigation, warrants, etc)
195Section 258 amended (Regulations relating to verifiers)
196Section 269 amended (Review of operation and effectiveness of levy)
197Section 270 amended (Appointment and conduct of independent panel)
198Schedule 1AA amended
199New Schedule 2A inserted
200Schedule 3 amended
201Schedule 4 amended
202New Schedule 5 inserted
203Section 30G amended (Regulations relating to Part 2)
204Section 183A amended (Certain applications not otherwise permitted by section 183)
205Section 186H amended (Treatment of allocations in respect of pre-1990 forest land that is offset)
206Section 189 amended (Emissions returns for post-1989 forest land activities)
207Section 191 amended (Ceasing to be registered as participant in respect of post-1989 forest land)
208Schedule 1AA amended
209Section 3A amended (Treaty of Waitangi (Te Tiriti o Waitangi))
210Section 3B amended (Consultation about certain regulations, orders, and notices)
211Section 4 amended (Interpretation)
212New subpart 4 of Part 2 inserted
30WRegulations setting price of carbon
213Section 89 amended (EPA to publish certain information)
214Section 120 amended (Amendment to emissions returns by EPA)
215New section 120A inserted (Liabilities, penalties, and interest when emissions returns amended)
120ALiabilities, penalties, and interest when emissions returns amended
216Section 123 amended (Effect of amendment or assessment)
217Section 127 amended (Time bar for amendment of emissions returns)
218Section 129 amended (Offences in relation to failure to comply with various provisions)
219Section 132 amended (Other offences)
220Sections 134 to 136 replaced
134Penalty for failing to surrender or repay units by due date
134APenalty for failing to submit emissions return by due date
134BPenalty for failing to submit annual or closing allocation adjustment by due date
134CPenalty for submitting incorrect emissions return
134DPenalty for providing incorrect information in allocation application or adjustment
135Date for payment of penalty
135ADeferred payment arrangements for payments of penalties
136Penalties are debt due to Crown
221Section 137 amended (Interest for late payment)
222Section 138 amended (Obligation to pay penalty not suspended by appeal)
223Section 138A replaced (Penalties to be paid into Crown account)
138APenalties to be paid into Crown account
224Section 159 amended (Recovery of costs)
225Section 179 amended (Forest land to be treated as deforested in certain cases)
226Section 181 amended (When deforestation to be treated as occurring in respect of pre-1990 forest land)
227Section 189 amended (Emissions returns for post-1989 forest land activities)
228Section 192 amended (Effect of transmission of interest in post-1989 forest land)
229Section 217 amended (Transitional provision for penalties)
230Section 233 amended (Rate of synthetic greenhouse gas levy)
231Section 236 amended (Maximum price of carbon for purpose of levy calculation)
232Schedule 1AA amended
233Section 3A amended (Treaty of Waitangi (Te Tiriti o Waitangi))
234Section 3B amended (Consultation about certain regulations, orders, and notices)
235Section 4 amended (Interpretation)
236Section 54 amended (Participants)
237Section 56 amended (Registration as participant in respect of activities listed in Schedule 3)
238Section 57 amended (Applicant to be registered as participant in respect of activities listed in Schedule 4)
239Section 58 amended (Removal from register of participants in respect of activities listed in Schedule 4)
240New section 59AA inserted (Removal from register for persistent non-compliance (standard forestry participants only))
59AARemoval from register for persistent non-compliance (standard forestry participants only)
241Section 60A amended (Exemption for participants in activity listed in Part 1 of Schedule 4)
242Section 62 amended (Monitoring of emissions and removals)
243Section 63 amended (Liability to surrender units to cover emissions)
244Section 64 amended (Entitlement to receive New Zealand units for removal activities)
245Section 65 amended (Annual emissions returns)
246Section 67 amended (Retention of emissions records)
247Section 89 amended (EPA to publish certain information)
248Section 91 amended (Approval of unique emissions factors)
249Section 92 amended (Recognition of verifiers)
250Section 107 amended (Applications for emissions rulings)
251Section 109 amended (Making of emissions rulings)
252Section 118 amended (Submission of final emissions returns)
253Section 127 amended (Time bar for amendment of emissions returns)
254New section 128A and cross-heading inserted
128AEPA may act if participant fails to give notice
255Section 129 amended (Offences in relation to failure to comply with various provisions)
256Section 134A amended (Penalty for failing to submit emissions return by due date)
257Section 134C amended (Penalty for submitting incorrect emissions return)
258Section 135A amended (Deferred payment arrangements for payments of penalties)
259Section 136 amended (Penalties are debt due to Crown)
260Section 137 amended (Interest for late payment)
261Section 138 amended (Obligation to pay penalty not suspended by appeal)
262Section 138A amended (Penalties to be paid into Crown account)
263Section 153 amended (Effect of being member of consolidated group)
264Section 157A amended (Changes to unincorporated bodies that are participants)
265Section 159 amended (Recovery of costs)
266Section 163 amended (Regulations relating to methodologies and verifiers)
267Section 167 amended (Regulations relating to fees and charges)
268Section 168 amended (Other regulations)
269Section 169 amended (Incorporation by reference in certain regulations)
270Section 178A amended (Option to pay money instead of surrendering, repaying, or reimbursing units)
271Section 178C amended (Fixed price (for option to pay money instead of surrendering, repaying, or reimbursing units))
272Part 5 replaced
179Forest land to be treated as deforested in certain cases
179AForest land may not be treated as deforested in certain cases
180Participant in respect of pre-1990 forest land
180AWhen deforestation to be treated as occurring in respect of pre-1990 forest land
180BApplications for exemption for land holdings of less than 50 hectares of pre-1990 forest land
180CCertain applications not otherwise permitted by section 180B
180DApplications for exemption for some Maori land or land with 10 or more owners
180EExemptions for deforestation of land with tree weeds
180FEffect of exemption
180GRegulations about exemptions for deforestation of land with tree weeds
180HMethodology for pre-1990 forest land cleared in 8 years or less
181Interpretation
181AApplication to offset land for pre-1990 forest land
181BCriteria for P90 offset application
181CEffect of approval of P90 offset application
181DEffect of P90 offset application being declined
181EAllocations for pre-1990 forest land to be surrendered when application approved
181FP90 offset release criteria
181GP90 release criteria notice
181HApplication to add area 2 (approved) land
181ICriteria for adding area 2 (approved) land
181JEffect of approval of application to add area 2 (approved) land
181KEffect of application to add area 2 (approved) land being declined
181LLand that must be identified as area 1 (not offset) land
181MExtension of time to add area 2 (approved) land
181NEffect on P90 offset date
181OReimbursement of surrendered allocation
181PParticipant in respect of P90 offsetting land
181QClearing or deforestation before required equivalence date
181RClearing before required equivalence date
181SDeforestation before required equivalence date
181TP90 offsetting land becomes pre-1990 forest land
181UP90 offsetting land register
181VEPA to give information on request
181WRegulations for P90 offsetting
182Standard and permanent forestry on post-1989 forest land
182AConditions on registration as participant in certain activities of standard or permanent forestry in respect of post-1989 forest land
182BEPA to give public notice of criteria for assessing risk of tree weed spread
182CRegistration as participant in standard or permanent forestry
182DNotice to forestry participant if their registration added or removed
182ENotice to interested party if forestry participant’s registration added or removed
182FRemoving registration as participant in standard or permanent forestry
182GRemoving registration as participant in standard or permanent forestry in certain natural events or clearance for forest management
183Provisional forestry emissions return in any year
183AFinal forestry emissions return at end of mandatory emissions return period
183BPreparing provisional or final forestry emissions return
184Gross liability or entitlement for each CAA1 in emissions return
184ANet liability or entitlement for each CAA1 in final forestry emissions return
184BUnit balance calculation for each CAA1 in emissions return
184CTotal liability or entitlement for all CAA1s in emissions return
184DTotal liability or entitlement has effect, and unit balance updated, when emissions return submitted
185New unit balance report
185AMaximum liability is unit balance of carbon accounting area
186Ceasing participation for whole carbon accounting areas
186AEffect of ceasing participation for whole carbon accounting areas
186BCeasing participation for part carbon accounting areas
186CEffect of ceasing participation for part carbon accounting areas
186DIf participant has never carried out activity in carbon accounting area
187Transmission of interest in post-1989 forest land
187AEffect of transmission of interest in post-1989 forest land
187BEPA may act if person fails to give notice of transmitted interest
187CHow EPA may act
187DEPA may attribute liability and entitlement to final transferee after earlier non-compliant transmission
188Application to reconfigure carbon accounting areas for standard or permanent forestry
188ACriteria to reconfigure carbon accounting areas for standard or permanent forestry
188BApproval of application to reconfigure carbon accounting areas for standard or permanent forestry
188CRestriction start date of reconfigured carbon accounting area for permanent forestry
189Application to change activity on post-1989 forest land
189ACriteria to change activity on post-1989 forest land
189BApproval of application to change activity on post-1989 forest land
189CEmissions return for application to change from PFSI activity
189DNew unit balance reports for application to change from PFSI activity
189ELiability to surrender units on transfer from PFSI activity to standard forestry in carbon accounting area (averaging)
189FLiability to surrender units on transfer from permanent forestry to standard forestry in carbon accounting area (averaging)
189GLiability to surrender units on transfer from standard forestry in carbon accounting area (averaging) to permanent forestry
190Permanent forestry period for land
190ARestriction on ceasing to be registered for permanent forestry
190BMinister may approve removal of land from permanent forestry
190CException from prohibition on clear-felling and deforestation
190DPermanent forestry land must not be clear-felled
190EPecuniary penalty for clear-felling of permanent forestry land
190FRegulations for pecuniary penalty for clear-felling
190GPermanent forestry land must not be deforested
190HPecuniary penalty for deforestation of permanent forestry land
190IDue dates for payment of penalties and recovery of EPA’s costs
190JOption must be chosen at end of permanent forestry period
190KRemoval of carbon accounting area from permanent forestry
191Interpretation
191AOverview of averaging accounting methodology
191BAveraging accounting applies to carbon accounting areas (averaging)
191CFirst rotation forest and subsequent rotation forest
191DCarbon stock measures for land
191EEntitlement to receive units
191FLiability to surrender units
191GCalculating and reporting emissions and removals
191HRestriction on reconfiguration
191IRegulations for averaging
192Interpretation
192AApplication to offset land for land in carbon accounting area (averaging)
192BCriteria for P89 offset application
192CEffect of approval of P89 offset application
192DDuration of P89 offsetting (approved) land status
192EEffect of being P89 offsetting (approved) land
192FSubsequent rotation forest
192GReconfiguration restrictions
192HNo transfers to permanent forestry
192IP89 offset release criteria
192JP89 release criteria notice
192KLiability to surrender units if P89 offset release criteria not met
192LMaximum liability and apportionment
192MP89 offset date unit balance report
192NEffect on P89 offset date
192OEPA may take action if original criteria not met
192PEffect of declaration after P89 offset date
192QRemedial action: land substitution
192RCriteria for land substitution
192SEffect of approval of land substitution
192TEffect of application to substitute land being declined
192URegulations for P89 offsetting
193Interpretation for this subpart
193AApplication for temporary adverse event suspension
193BCriteria of temporary adverse event suspension
193CApproval of temporary adverse event suspension
193DDuration of temporary adverse event land status
193EEffect of being temporary adverse event land
193FNo liability or entitlement
193GFirst rotation forest
193HReconfiguration restrictions
193IDamage to land turns out to be permanent
193JRe-establishment criteria
193KNotice of achievement of re-establishment
193LEffect on re-establishment date
193MCarbon recovery criteria
193NNotice when land achieves carbon recovery
193OCancellation for breach of conditions
193POther circumstances causing land to cease to be temporary adverse event land
193QConsequences if land ceases to be temporary adverse event land
193RRegulations for temporary adverse events
194Input returns may be submitted for certain emissions returns for forestry activities
194AEPA may do calculations based on input return
194BRegulations for input returns
195Notification of status of forest land
195AInformation about status of forest land
196Meaning of forestry classification
196AEPA may give forestry classifications to areas of land
196BEffect of forestry classifications
196CChange of forestry classification to correct error
196DChange of forestry classification to update for changes
196EForestry classification with effect before date classification given
196FRegulations for forestry classifications
197Entitlement to units for removals from grant-funded forests
197ARegulations for grant-funded forests
273Part 6 heading repealed
274Schedule 1AA amended
275Schedule 3 amended
276Schedule 4 amended
277Schedule 4 amended
278Climate Change (Fishing Allocation Plan) Order 2010 revoked
279Consequential amendments
280Consequential amendments
281Consequential amendments
282Forests (Permanent Forest Sink) Regulations 2007 revoked
283Consequential amendments
Legislative history
Administrative information

The Parliament of New Zealand enacts as follows:

1 Title

This Act is the Climate Change Response (Emissions Trading Reform) Amendment Act 2020.

2 Commencement

This Act comes into force as follows:

(a)

subpart 1 of Part 1 and subpart 1 of Part 2 come into force on the day after Royal assent:

(b)

subpart 2 of Part 1 and subpart 2 of Part 2 come into force on 30 November 2020:

(c)

subpart 3 of Part 1 comes into force on 1 January 2021:

(d)

subpart 4 of Part 1 and subpart 3 of Part 2 come into force on 1 January 2023:

(e)

subpart 5 of Part 1 and subpart 4 of Part 2 come into force on 1 January 2024.

3 Principal Act

This Act amends the Climate Change Response Act 2002 (the principal Act).

Part 1 Amendments to principal Act

Subpart 1—Amendments that commence on day after Royal assent

4 Section 2A amended (Application of Schedules 3 and 4)

(1)

In section 2A(1)(a)(ii), after “Schedule 3”, insert “(for fertiliser–farmer activities or animals–farmer activities)”.

(2)

In section 2A(1)(b), replace “221” with “219”.

(3)

In section 2A(3), delete “Subpart 1 of”.

(4)

In section 2A(4), before “Part 3”, insert “Subpart 1 of”.

(5)

Replace section 2A(5) and (6) with:

(5A)

Subpart 1 of Part 5 of Schedule 3 (for fertiliser–processor activities)—

(a)

applies on and after 1 January 2011; but

(b)

is affected by section 219, which provides that emissions released during the following excluded period do not require units to be surrendered: the period—

(i)

starting on 1 January 2011; and

(ii)

ending on a date determined by that section (which may be 31 December 2024 or another date as early as 1 July 2022).

(5B)

Subpart 2 of Part 5 of Schedule 3 (for fertiliser–farmer activities)—

(a)

applies on and after a date appointed by the Governor-General by Order in Council (see section 2B); but

(b)

is affected by section 219, which provides that emissions released during the following excluded period do not require units to be surrendered: the first year in which that subpart 2 applies to the persons, or class of persons, carrying out that activity.

(5C)

Subpart 3 of Part 5 of Schedule 3 (for animals–processor activities)—

(a)

applies on and after 1 January 2011; but

(b)

is affected by section 219, which provides that emissions released during the following excluded period do not require units to be surrendered: the period—

(i)

starting on 1 January 2011; and

(ii)

ending on a date determined by that section (which may be 31 December 2024 or another date as early as 1 July 2022).

(5D)

Subpart 4 of Part 5 of Schedule 3 (for animals–farmer activities)—

(a)

applies on and after 1 January 2024 or a later date appointed by the Governor-General by Order in Council (see section 2B); but

(b)

is affected by section 219, which provides that emissions released during the following excluded period do not require units to be surrendered: the first year in which that subpart 4 applies to the persons, or class of persons, carrying out that activity.

(6)

Replace section 2A(8) and (9) with:

(8)

Part 1A of Schedule 4 applies on and after 1 January 2023.

5 Sections 2B and 2C replaced

Replace sections 2B and 2C with:

2B Orders in Council in relation to subparts 2 and 4 of Part 5 of Schedule 3 (Agriculture)

(1)

This section relates to an Order in Council made under section 2A(5B) or (5D), which appoints a date on and after which subpart 2 or 4 of Part 5 of Schedule 3 (the subpart) applies (for fertiliser–farmer activities or animals–farmer activities).

(2)

The order must—

(a)

be made on the recommendation of the Minister; and

(b)

appoint a date that is 1 January in a year; and

(c)

be made at least 1 year before the date appointed by the order.

(3)

The order may provide that the subpart applies, on and after the date appointed by the order,—

(a)

specifically to 1 or more classes of person who carry out an activity listed in the subpart; or

(b)

generally, to all persons who carry out an activity listed in the subpart.

(4)

Before recommending the making of the order, the Minister must comply with subsections (5) and (6).

(5)

The Minister must have regard to—

(a)

the need for the EPA to be able to verify information contained in emissions returns of the persons who will become participants in an activity listed in the subpart by operation of the order; and

(b)

the likelihood that, as a result of becoming participants by operation of the order, persons carrying out an activity listed in the subpart will reduce their emissions; and

(c)

the desirability of minimising—

(i)

the compliance and administration costs of persons who will become participants in an activity listed in the subpart by operation of the order; and

(ii)

the administration costs of the Crown in administering the emissions trading scheme.

(6)

The Minister must consult, or be satisfied that the chief executive has consulted, the persons (or representatives of those persons) that appear to the consulter likely to have an interest in the order.

2C Effect of overlapping application of subparts of Part 5 of Schedule 3 (Agriculture)

(1)

This section applies—

(a)

to the fertiliser–processor and fertiliser–farmer subparts (of Part 5 of Schedule 3) at any time that those subparts apply at the same time (because of an Order in Council made under section 2A(5B)); and

(b)

to the animals–processor and animals–farmer subparts (of Part 5 of Schedule 3) on and after—

(i)

1 January 2024; or

(ii)

if an Order in Council is made under section 2A(5D), the date appointed in that order.

(2)

If this section applies, then regulations made under section 163(1) may require—

(a)

a person carrying out a fertiliser–processor activity and a person carrying out a fertiliser–farmer activity to—

(i)

collect data or other information relating to the same synthetic fertiliser; and

(ii)

calculate emissions relating to the same synthetic fertiliser; or

(b)

a person carrying out an animals–processor activity and a person carrying out an animals–farmer activity to—

(i)

collect data or other information relating to the same ruminant animals, pigs, horses, or poultry; and

(ii)

calculate emissions relating to the same ruminant animals, pigs, horses, or poultry.

(3)

However,—

(a)

on and after the first day in respect of which the person carrying out a fertiliser–farmer activity is required to surrender units for emissions relating to the fertiliser, this Act no longer applies to the person carrying out the fertiliser–processor activity in relation to that fertiliser; and

(b)

on and after the first day in respect of which the person carrying out an animals–farmer activity is required to surrender units for emissions relating to the ruminant animals, pigs, horses, or poultry, this Act no longer applies to the person carrying out the animals–processor activity in relation to those ruminant animals, pigs, horses, or poultry.

(4)

If an Order in Council is made under section 2A(5B) that has the effect of applying the fertiliser–farmer subpart to all persons who carry out a fertiliser–farmer activity, then section 2A(5A) and the fertiliser–processor subpart are repealed on the first day in respect of which emissions from all persons carrying out a fertiliser–farmer activity may result in liability to surrender units.

(5)

On the first day on which, under section 2A(5D), the animals–farmer subpart applies to all persons who carry out an animals–farmer activity, and emissions from all persons carrying out the activity may result in liability to surrender units, section 2A(5C) and the animals–processor subpart are repealed.

(6)

If, by operation of subsection (3), (4), or (5), this Act no longer applies to a person carrying out a fertiliser–processor activity or an animals–processor activity, then—

(a)

section 54(4) applies, with any necessary modifications, to any person who has ceased, by operation of that subsection, to be a participant in respect of that activity; and

(b)

the person is not required to comply with section 59, but the EPA may, for the purposes of section 59(2), determine that the person has ceased to carry out the activity.

(7)

In this section and sections 2A, 2B, 216, and 219,—

animals–farmer subpart means subpart 4 of Part 5 of Schedule 3, and animals–farmer activity means an activity listed in that subpart

animals–processor subpart means subpart 3 of Part 5 of Schedule 3, and animals–processor activity means an activity listed in that subpart

fertiliser–farmer subpart means subpart 2 of Part 5 of Schedule 3, and fertiliser–farmer activity means an activity listed in that subpart

fertiliser–processor subpart means subpart 1 of Part 5 of Schedule 3, and fertiliser–processor activity means an activity listed in that subpart.

6 Section 3 amended (Purpose)

(1)

In section 3(1)(a), replace “and the Protocol” with “, the Protocol, and the Paris Agreement”.

(2)

In section 3(1)(a)(i), after “period”, insert “starting on 1 January 2008 and ending on 31 December 2012”.

(3)

In section 3(1)(a)(ii), replace “Article 7 of the Protocol and Article 12 of the Convention” with “Article 12 of the Convention, Article 7 of the Protocol, and Article 13 of the Paris Agreement”.

(4)

In section 3(1)(b)(i), replace “and the Protocol” with “, the Protocol, and the Paris Agreement”.

(5)

Replace section 3(1)(b)(ii) with:

(ii)

assisting New Zealand to meet its 2050 target and emissions budgets:

(6)

In section 3(1)(c)(i), replace “and the Protocol” with “, the Protocol, and the Paris Agreement”.

(7)

Replace section 3(1)(c)(ii) with:

(ii)

assisting New Zealand to meet its 2050 target and emissions budgets.

(8)

Repeal section 3(3).

7 Section 3A amended (Treaty of Waitangi (Te Tiriti o Waitangi))

(1)

(2)

Replace section 3A(b) and (c) with:

(b)

with respect to the following provisions (which relate to powers to make regulations or Orders in Council or to give notice in the Gazette), before recommending the making of regulations or an order, or giving notice in the Gazette, under those provisions, the Minister must consult, or be satisfied that the chief executive has consulted, representatives of iwi and Māori that appear to the Minister or chief executive likely to have an interest in the regulations, order, or notice:

(i)

section 2A(5B) or (5D) (Part 5 of Schedule 3):

(ii)

section 30G(1)(b)(i), (c), (j), or (k) (dealings with units under Part 2):

(iii)

section 30GA (auctions to sell New Zealand units):

(iv)

section 30GB (limits and price controls for units):

(v)

section 30GD (auction monitor):

(vi)

section 30M (infringement offences):

(vii)

section 60 (exemptions in respect of activities listed in Schedule 3):

(viii)

section 60A (exemptions for participants in activity listed in Part 1 of Schedule 4):

(ix)

section 84A or 84B (phase-out rates for eligible industrial activities):

(x)

section 161D(1)(a) (notice specifying description of activity in relation to industrial allocations), unless the only purpose of the notice is to require persons to provide electricity-related contracts or any information related to those contracts:

(xi)

section 161G (eligible agricultural activities):

(xii)

section 162 (adding further activity to Part 2 of Schedule 4):

(xiii)

section 163 (methodologies and verifiers):

(xiv)

section 164 (unique emissions factors):

(xv)

section 168(1)(nb) (New Zealand’s best practice forest management):

(xvi)

section 186F (pre-1990 offsetting forest land):

(xvii)

section 194C (input returns):

(xviii)

section 196F (forestry classifications):

(xix)

section 244 (exemptions from payment of synthetic greenhouse gas levy):

(xx)

section 246(1)(a) to (e) (synthetic greenhouse gas levy):

(xxi)

section 258 (verifiers):

8 New section 3B inserted (Consultation about certain regulations, orders, and notices)

After section 3A, insert:

3B Consultation about certain regulations, orders, and notices

(1)

The Minister must comply with this section before recommending the making of regulations or an Order in Council, or giving notice in the Gazette, under any of the following:

(a)

section 30G(1)(b)(i), (c), (j), or (k) (dealings with units under Part 2):

(b)

section 30GA (auctions to sell New Zealand units):

(c)

section 30GB (limits and price controls for units):

(d)

section 30GD (auction monitor):

(e)

section 30M (infringement offences):

(f)

section 60 (exemptions in respect of activities listed in Schedule 3), unless the Crown has signed a negotiated greenhouse agreement with the person exempted:

(g)

section 60A (exemptions for participants in activity listed in Part 1 of Schedule 4):

(h)

section 84A or 84B (phase-out rates for eligible industrial activities):

(i)

section 161D(1)(a) (notice specifying description of activity in relation to industrial allocations), unless the only purpose of the notice is—

(i)

to require persons to provide electricity-related contracts or any information related to those contracts; or

(ii)

to provide the Minister with the information necessary to determine whether any matter should be considered by a review under section 160:

(j)

section 161G(1)(a)(ii) (allocative baseline of eligible agricultural activity):

(k)

section 162 (adding further activity to Part 2 of Schedule 4):

(l)

section 163 (methodologies and verifiers):

(m)

section 164 (unique emissions factors):

(n)

section 168(1)(nb) (New Zealand’s best practice forest management):

(o)

section 186F (pre-1990 offsetting forest land):

(p)

section 194C (input returns):

(q)

section 196F (forestry classifications):

(r)

section 216 (voluntary reporting or surrender for animals–farmer or fertiliser–farmer activity):

(s)

section 233(4)(a) (methodology for specifying price of carbon):

(t)

section 244 (exemptions from payment of synthetic greenhouse gas levy):

(u)

section 246(1)(a) to (e) (synthetic greenhouse gas levy):

(v)

section 258 (verifiers).

(2)

The Minister must also comply with this section before recommending the revocation of an Order in Council under section 60, 60A, or 244 (exemptions for various matters).

(3)

The Minister must be satisfied that 1 of the following has consulted the persons (or representatives of those persons) that appear to the consulter likely to be substantially affected by any regulations made in accordance with the recommendation, by any order made or revoked in accordance with the recommendation, or by the notice:

(a)

the Minister or the chief executive; or

(b)

for regulations made under section 30GB, 84A, or 84B, the Minister, the chief executive, or the Climate Change Commission.

(4)

The process for consultation must, to the extent practicable in the circumstances, include—

(a)

adequate and appropriate notice of the proposed terms of the recommendation or notice, and of the reasons for it; and

(b)

a reasonable opportunity for consulted persons to consider the recommendation or notice and make submissions; and

(c)

adequate and appropriate consideration of submissions.

(5)

This section does not apply to regulations made under the following if the Minister considers it is in the national interest that the regulations be made urgently:

(a)

section 30G(1)(b)(i), (c), (j), or (k) (dealings with units under Part 2):

(b)

section 30GA (auctions to sell New Zealand units):

(c)

section 30GB (limits and price controls for units):

(d)

section 30GD (auction monitor).

(6)

A failure to comply with this section does not affect the validity of any regulations, order, or notice to which it applies.

9 Section 4 amended (Interpretation)

(1)

In section 4(1), repeal the definitions of allocation plan, approved overseas unit, assigned amount unit, Australian eligible industrial activity, carbon dioxide equivalent, carry-over, CDM registry, certified emission reduction unit, clean development mechanism project, commitment period reserve, conversion account, convert, designated operational entity, elect, eligible land, emission reduction unit, emissions budget period, emissions return, executive board, expire or expiry, first commitment period, fishing allocation plan, greenhouse gas, initial assigned amount, international transaction log, joint implementation project, Kyoto units, long-term certified emission reduction replacement account, long-term certified emission reduction unit, New Zealand Greenhouse Gas Inventory, non-compliance cancellation account, overseas registry, Paris Agreement, Party, post-1989 forest land, pre-1990 forest land allocation plan, previous commitment period, relevant commitment period, removal unit, retire, retirement account, sink cancellation account, subsequent commitment period, supervisory committee, temporary certified emission reduction replacement account, temporary certified emission reduction unit, and unit.

(2)

In section 4(1), insert in their appropriate alphabetical order:

approved overseas unit means a unit, other than a New Zealand unit, that is—

(a)

issued (as defined by this section); and

(b)

prescribed as a unit that may be transferred to accounts in the Registry

auction means an auction to sell New Zealand units under section 6A

carbon dioxide equivalent, in relation to a greenhouse gas, means the amount of carbon dioxide (in tonnes) that would produce the same global warming as the amount of that gas, calculated in accordance with international climate change obligations

emissions budget period means a 5-year period, except for the first 4-year period in the years 2022 to 2025, as specified in section 5X(3)

emissions return

(a)

means—

(i)

an annual emissions return submitted under section 65; or

(ii)

a quarterly emissions return submitted under section 66; or

(iii)

a final emissions return submitted under section 118; or

(iv)

an emissions return submitted under a provision of Part 5 or Schedule 1AA; and

(b)

includes the following as if they had been submitted in that form:

(i)

an emissions return as amended by the EPA under section 120; and

(ii)

the EPA’s assessment under section 121 of the matters that should have been in an emissions return; and

(c)

includes an emissions return that shows nil liability

emissions trading scheme means (except in section 3) the greenhouse gas emissions trading scheme established under this Act

ETS participant provisions means Parts 4 to 5D of this Act

forestry activity means—

(a)

an activity listed in Part 1 or 1A of Schedule 3 (deforesting certain pre-1990 forest land or pre-1990 offsetting forest land); or

(b)

an activity listed in Part 1 of Schedule 4 (forestry on post-1989 forest land)

forestry classification has the meaning given in section 196

greenhouse gas means—

(a)

carbon dioxide (CO2):

(b)

methane (CH4):

(c)

nitrous oxide (N2O):

(d)

any hydrofluorocarbon:

(e)

any perfluorocarbon:

(f)

sulphur hexafluoride (SF6)

international climate change obligations means New Zealand’s international obligations under the Convention, the Protocol, or the Paris Agreement

international transaction body means a prescribed body that confirms the validity of transactions relating to accounting of greenhouse gas emissions

issued, in relation to an approved overseas unit, means—

(a)

issued by an overseas registry; or

(b)

issued in another way and approved by an international transaction body

mandatory emissions return period means any of the following periods:

(a)

the first commitment period starting on 1 January 2008 and ending on 31 December 2012:

(b)

the 5-year period starting on 1 January 2013 and ending on 31 December 2017:

(c)

the 5-year period starting on 1 January 2018 and ending on 31 December 2022:

(d)

the 3-year period starting on 1 January 2023 and ending on 31 December 2025:

(e)

the 5-year period starting on 1 January 2026 and ending on 31 December 2030:

(f)

each consecutive 5-year period after that

New Zealand Greenhouse Gas Inventory means the reports that are required under Articles 4 and 12 of the Convention, Article 7.1 of the Protocol, and Article 13.7 of the Paris Agreement and that are prepared in accordance with section 32(1)

overseas registry means a prescribed overseas registry from which or to which units may be transferred to or from accounts in the Registry

Paris Agreement

(a)

means the Paris Agreement done at Paris on 12 December 2015, a copy of the English text of which is set out in Schedule 2A; and

(b)

includes any amendments made to the Paris Agreement that are, or will become, binding on New Zealand from time to time

post-1989 forest land means forest land that—

(a)

is one of the following:

(i)

land that was not forest land on 31 December 1989:

(ii)

land that was forest land on 31 December 1989 but was deforested in the period beginning on 1 January 1990 and ending on 31 December 2007:

(iii)

land that was pre-1990 forest land, other than exempt land,—

(A)

that was deforested on or after 1 January 2008; and

(B)

in respect of which any liability to surrender units arising in relation to an activity listed in Part 1 of Schedule 3 has been satisfied:

(iv)

land that was pre-1990 forest land, other than exempt land, that was deforested on or after 1 January 2013 and offset by pre-1990 offsetting forest land:

(v)

land that was pre-1990 offsetting forest land that was deforested after 1 January 2013 and in respect of which any liability to surrender units arising in relation to an activity listed in Part 1A of Schedule 3 has been satisfied:

(vi)

land that was exempt land—

(A)

that has been deforested; and

(B)

in respect of which the number of units that would have been required to be surrendered in relation to an activity listed in Part 1 of Schedule 3, had the land not been exempt land, have been surrendered under section 187(2):

(vii)

land that was exempt land that has been deforested more than 8 years ago; and

(b)

is not offsetting forest land or pre-1990 offsetting forest land

pre-1990 forest land allocation plan means the allocation plan issued under section 70 in respect of pre-1990 forest land

unit means a New Zealand unit or an approved overseas unit

(3)

In section 4(1), definition of account number, replace “section 15(1)(a)” with “section 15(1)”.

(4)

In section 4(1), definition of eligible person, replace paragraph (d) with:

(d)

the pre-1990 forest land allocation plan

(5)

In section 4(1), definition of exempt land, replace paragraph (a)(i) with:

(i)

under section 183 or 183B; or

(6)

In section 4(1), definition of general cancellation account, delete “other than sink activities being a source of emissions or a determination that New Zealand is not in compliance with Article 3.1 of the Protocol”.

(7)

In section 4(1), definition of holding account, delete “that have not been retired, surrendered, converted, or cancelled”.

(8)

In section 4(1), definition of surrender, replace “section 18CA(3) or (4)” with “section 18CA(2)”.

(9)

In section 4(2), replace “or Protocol” with “, the Protocol, or the Paris Agreement” in each place.

(10)

In section 4(6), replace “sections 62, 65, 66, 67, 118, 187, 189, 191, 192, and 193, activity or activities, in relation to a participant who submits an emissions return that shows nil liability,” with “a provision of this Act that relates to a participant who submits an emissions return that shows nil liability, activity or activities.

10 New section 4AA inserted (Greenhouse gas definition may be amended to add gases)

After section 4, insert:

4AA Greenhouse gas definition may be amended to add gases

(1)

The Governor-General may, by Order in Council made on the recommendation of the Minister,—

(a)

amend the definition of greenhouse gas in section 4 to add 1 or more other gases; and

(b)

if necessary, amend Schedule 1AA to set out transitional provisions for the addition.

(2)

The Minister must not recommend the making of an order unless the Minister is satisfied that New Zealand has international climate change obligations in relation to the additional gas or gases.

11 Section 5D amended (Membership of Commission)

Replace section 5D(1)(c) with:

(c)

no fewer than 3, and no more than 7, other members.

12 Section 5J amended (Commission’s functions)

(1)

After section 5J(f), insert:

(fa)

to make recommendations to the Minister about limits and price control settings for units (see section 5ZOA):

(fb)

to make recommendations to the Minister about decreased or increased phase-out rates (see section 5ZOB):

(2)

After section 5J(h), insert:

(ha)

to provide advice to the Minister (as required by section 220) on the progress that has been made towards—

(i)

meeting the primary sector climate change commitments set out in Schedule 5; and

(ii)

participants in the activities listed in subpart 4 of Part 5 of Schedule 3 (for animals–farmer participants) being ready to start complying with reporting and surrender obligations under this Act:

13 Section 5N amended (Consultation)

Replace section 5N(2)(a) with:

(a)

make publicly available, and invite submissions on, discussion papers and draft reports; and

14 Section 5ZA amended (Commission to advise Minister)

Replace section 5ZA(4)(a) with:

(a)

in the case of the first 3 emissions budgets, no later than—

(i)

1 February 2021; or

(ii)

after a request by the Commission to extend the deadline, any date on or before 1 August 2021 that is specified by the Minister (whether once or more) by notice in the Gazette:

15 Section 5ZG amended (Requirement for emissions reduction plan)

Replace section 5ZG(2) with:

(2)

The plan must be prepared and made publicly available by the deadlines specified in section 5ZI.

16 Section 5ZH amended (Commission to advise on emissions reduction plans)

Replace section 5ZH(2) with:

(2)

Despite subsection (1), the first advice must be given no later than—

(a)

1 February 2021; or

(b)

after a request by the Commission to extend the deadline, any date on or before 1 August 2021 that is specified by the Minister (whether once or more) by notice in the Gazette.

17 Section 5ZI amended (Minister to prepare and make emissions reduction plan publicly available)

(1)

Replace section 5ZI(2) with:

(2)

The Minister must—

(a)

prepare the plan after the relevant emissions budget has been notified under section 5ZD; but

(b)

do the following at least 12 months before the commencement of the budget period:

(i)

publish the plan in the Gazette; and

(ii)

make the plan publicly available; and

(iii)

present a copy of the plan to the House of Representatives.

(2A)

However, for the plan for the first emissions budget period, the Minister—

(a)

may prepare the plan before the relevant emissions budget has been notified under section 5ZD; and

(b)

must do the following before the commencement of the budget period:

(i)

publish the plan in the Gazette; and

(ii)

make the plan publicly available; and

(iii)

present a copy of the plan to the House of Representatives.

(2)

18 Section 5ZL amended (Commission to report at end of emissions budget period)

(1)

In section 5ZL(1), replace “in the next emissions budget” with “for that”.

(2)

Replace section 5ZL(1)(c) with:

(c)

an assessment of the amount of offshore mitigation required to meet the emissions budget for that period, taking into account the limit proposed by the Commission under section 5ZA(1)(e).

19 New subpart 6 of Part 1B inserted

After section 5ZO, insert:

Subpart 6—Recommendations about making regulations

5ZOA Recommendations about limits and price control settings for units

(1)

This section applies after the Minister has set the first emissions budget.

(2)

The Commission must recommend to the Minister limits and price control settings, including any desirable emissions price path, each time the Minister is required to recommend the making of regulations under section 30GB.

(3)

The Commission’s recommendations must—

(a)

cover the limits and price control settings for each year that the Minister’s recommendation must cover; and

(b)

be made in accordance with—

(i)

the same requirements under sections 30GB and 30GC (except section 30GC(5)(e)) that apply to the making of the Minister’s recommendations; and

(ii)

its other duties (see sections 5M to 5O, for example); and

(c)

be given to the Minister a reasonable time before the Minister is required to recommend the making of the regulations.

5ZOB Recommendations about decreased or increased phase-out rates

(1)

The Commission must, on the Minister’s request, consider and recommend whether—

(a)

a decreased phase-out rate should be set for 1 or more eligible industrial activities for a year or years (by the making or amendment of regulations under section 84A):

(b)

an increased phase-out rate should be set for 1 or more eligible industrial activities for an emissions budget period (by the making or amendment of regulations under section 84B).

(2)

The Commission must recommend that a decreased phase-out rate should be set for 1 or more eligible industrial activities if the Commission is satisfied that there is an ongoing and substantial risk that activities will be relocated outside of New Zealand to reduce emissions-related costs.

(3)

The Commission may recommend that an increased phase-out rate should be set for 1 or more eligible industrial activities if the Commission is satisfied that it is appropriate to do so, having regard to the matters listed in section 84C(3).

20 Section 6 amended (Minister of Finance may direct Registrar regarding establishment of Crown holding accounts and carry out trading activities with respect to units)

(1)

In section 6(b), after “overseas registry”, insert “or international transaction body”.

(2)

In section 6(d), delete “, with any person (including any other Party)”.

21 Section 6A amended (Minister’s power to sell by auction)

(1)

In section 6A, replace “section 30G(1)(p)” with “section 30GA”.

(2)

In section 6A(a), after “prescribed”, insert “individual limit and”.

(3)

After section 6A(b), insert:

(c)

direct the Registrar to transfer units to any holding account in the Registry for the purposes of selling New Zealand units by auction.

22 Section 7 amended (Minister of Finance may give directions to Registrar regarding accounts and units)

(2)

Replace section 7(1)(b) to (e) with:

(b)

transfer units between holding accounts, subject to any prescribed restriction or prohibition.

(3)

Replace section 7(2)(b)(i) with:

(i)

the transfer is required to comply with international climate change obligations; or

(4)

Repeal section 7(3).

23 Section 9 amended (Minister of Finance may obtain information from inventory agency and Registrar)

In section 9(b)(ii), replace “retired, replaced, cancelled, and carried-over” with “replaced, and cancelled”.

24 Section 10 replaced (Purpose of Registry)

Replace section 10 with:

10 Purpose of Registry

The purpose of the Registry is—

(a)

to ensure the accurate, transparent, and efficient accounting of—

(i)

the issue, holding, transfer, surrender, and cancellation of New Zealand units and approved overseas units; and

(ii)

the conversion of New Zealand units in accordance with regulations made under this Act; and

(b)

to ensure the accurate, transparent, and efficient exchange of information between the Registry, overseas registries, and international transaction bodies; and

(c)

to facilitate the exchange of information between the persons with functions, duties, and powers under this Act to enable all of them to perform their functions and duties and exercise their powers.

25 Section 13 amended (Registrar may refuse access to, or suspend operation of, Registry)

In section 13(d), replace “New Zealand’s international obligations” with “international climate change obligations”.

26 Section 14 replaced (Registrar must give effect to directions)

Replace section 14 with:

14 Registrar must give effect to directions

The Registrar must give effect to any direction (including for the transfer of units) that is given by a Minister or the EPA in accordance with this Act.

27 Section 15 amended (Registrar to allocate unique numbers)

(1)

Replace section 15(1) with:

(1)

The Registrar must, in accordance with regulations made under this Act, allocate a unique account number to each account when the account is created.

(2)

28 Sections 16 and 17 repealed

Repeal sections 16 and 17.

29 Section 18 amended (Form and content of unit register)

(1)

Replace section 18(2)(b) with:

(b)

the particulars of transactions, including, but not limited to, the issue, transfer, replacement, surrender, conversion, and cancellation of units; and

(2)

In section 18(3)(a), replace “retirement, replacement, surrender, carry-over,” with “replacement, surrender,”.

(3)

In section 18(3)(b)(ii), after “registries”, insert “or international transaction bodies”.

30 Section 18B amended (Closing holding accounts)
31 Section 18C amended (Transfer of units)

(1)

In section 18C(1)(b), after “registry”, insert “or international transaction body”.

(2)

32 Section 18CA replaced (Effect of surrender, retirement, cancellation, and conversion)

Replace section 18CA with:

18CA Effect of surrender and cancellation

(1)

A unit that is transferred to a cancellation account may not be further transferred, surrendered, or cancelled.

(2)

A unit that is transferred to a surrender account may only be further transferred in accordance with a direction of the Minister of Finance given under section 6 or 7 or a direction of the EPA given under section 124.

33 Sections 18CB, 18CC, and 18CD repealed

Repeal sections 18CB, 18CC, and 18CD.

34 Section 18D amended (Succession)

(1)

Replace section 18D(2)(b) with:

(b)

the Registrar has registered the successor as the account holder.

(2)

Replace section 18D(3) with:

(3)

The Registrar may register a successor as the account holder—

(a)

on application made in the form, and payment of the fee (if any), prescribed in regulations made under this Act; and

(b)

in accordance with those regulations.

(4)

However, if the account holder is a company and any units in its holding account are vested in the Crown under section 324(1) of the Companies Act 1993,—

(a)

subsections (2) and (3) do not apply; and

(b)

the EPA must, as soon as practicable after becoming aware of the public notice about the vesting of the units that is given under section 324(3) of that Act, direct the Registrar to transfer the units to a Crown holding account and close the account holder’s holding account.

35 Section 19 repealed (Retirement of Kyoto units by the Crown)

Repeal section 19.

36 Section 20 amended (Transactions must be registered)

(1)

In section 20(1), delete “retire,”.

(2)

In section 20(2)(a), replace “the international transaction log” with “an international transaction body”.

37 Section 21 repealed (Registration procedure for Kyoto units)

Repeal section 21.

38 Section 21AA amended (Registration procedure for New Zealand units and approved overseas units)

(1)

In section 21AA(1), replace “a Minister authorised to give the direction under a provision of this Act or the EPA” with “the EPA or a Minister authorised to give the direction under this Act”.

(2)

Replace section 21AA(1)(b) with:

(b)

if the proposed transaction concerns an overseas registry or international transaction body, send a record of the proposed transaction to the overseas registry or international transaction body if required by it; and

(3)

In section 21AA(1)(c), after “registry”, insert “or international transaction body”.

(4)

In section 21AA(1)(c)(ii)(A), replace “the Minister or the EPA” with “the EPA or the Minister”.

(5)

In section 21AA(2), after “an overseas registry”, insert “or international transaction body”.

(6)

In section 21AA(2), replace “the overseas registry” with “it”.

(7)

In section 21AA(2)(b), after “registry”, insert “or international transaction body”.

(8)

In section 21AA(2)(c)(i), replace “the Minister or the EPA who gave the direction” with “the EPA or the Minister who gave the direction”.

(9)

In section 21AA(3), after “from the overseas registry”, insert “or international transaction body”.

(10)

In section 21AA(3)(c), after “registry”, insert “or international transaction body”.

39 Section 21A amended (Electronic registration)

In section 21A, delete “a provision of”.

40 Section 21B amended (Defective applications)

Replace section 21B(1) with:

(1)

If an application is defective, the Registrar may direct the applicant, in writing by electronic notification, to correct the defect within a specified period of time.

41 Section 23 repealed (Receiving Kyoto units from overseas registries)

Repeal section 23.

42 Section 23A amended (Receiving New Zealand units and approved overseas units from overseas registries)

(1)

In the heading to section 23A, after registries, insert or international transaction bodies.

(2)

In section 23A(1), (2), and (3), after “overseas registry”, insert “or international transaction body” in each place.

43 Section 24 amended (Priority of registration)

In section 24(1), delete “a provision of”.

44 Section 25 amended (Correction of unit register)

(1)

In section 25(1)(a), replace “the Minister or the EPA who gave the direction” with “the EPA or the Minister who gave the direction”.

(2)

Replace section 25(3)(c)(ii) with:

(ii)

an international transaction body (if required to do so); and

45 Section 27 amended (Information accessible by search)

(1)

Replace section 27(1)(c) with:

(c)

for each account whose purpose is to hold approved overseas units, the commitment period that the Protocol provides for and that is associated with the account; and

(3)

Replace section 27(2)(h) and (i) with:

(h)

the total quantity of each type of approved overseas units issued during that year; and

(4)

In section 27(2)(j), replace “to the Registry from overseas registries” with “into the Registry”.

(5)

In section 27(2)(j)(iii), replace “overseas registries” with “registry or body”.

(6)

In section 27(2)(j)(iii)(A) and (B), replace “overseas registry” with “registry or body”.

(7)

In section 27(2)(k), replace “from the Registry to overseas registries” with “out of the Registry”.

(8)

In section 27(2)(k)(iii), replace “overseas registries” with “registry or body”.

(9)

In section 27(2)(k)(iii)(A) and (B), replace “overseas registry” with “registry or body”.

(10)

Replace section 27(2)(n), (o), and (p) with:

(o)

the total quantity of approved overseas units transferred during that year to any sink cancellation account; and

(p)

the total quantity of approved overseas units transferred during that year to any non-compliance cancellation account; and

(11)

In section 27(2)(q), replace “to the” with “to each”.

(12)

(13)

Replace section 27(2)(u), (v), and (w) with:

(u)

the total quantity of each type of unit into which New Zealand units are converted in accordance with regulations made under this Act.

(14)

Replace section 27(3)(a) and (b) with:

(a)

the total holdings in each holding account in the Registry (including any holding account held by the Crown) of each type of approved overseas unit issued in—

(i)

the first commitment period starting on 1 January 2008 and ending on 31 December 2012; or

(ii)

the second commitment period starting on 1 January 2013 and ending on 31 December 2020; and

(b)

the total quantity of each type of approved overseas unit in the Registry.

46 Section 30A amended (The Crown or Registrar not liable in relation to searches in certain cases)

Replace section 30A(b)(i) with:

(i)

an international transaction body; or

47 Sections 30B to 30D and cross-heading repealed

Repeal sections 30B to 30D and the cross-heading above section 30B.

48 Section 30E repealed (Conversion of New Zealand units into designated assigned amount units for sale overseas or cancellation)

Repeal section 30E.

49 Section 30G amended (Regulations relating to Part 2)

(1)

In section 30G(1)(b)(i)(A) and (C), after “registry”, insert “or international transaction body”.

(2)

After section 30G(1)(b)(ii), insert:

(iii)

the registration of a successor as an account holder:

(4)

In section 30G(1)(e)(vi)(B), replace “the international transaction log” with “an international transaction body”.

(5)

In section 30G(1)(f) and (i), after “Part”, insert “or regulations made under this Part”.

(6)

After section 30G(1)(i), insert:

(ia)

prescribing, for the purpose of the definition of international transaction body in section 4, bodies that confirm the validity of transactions relating to accounting of greenhouse gas emissions:

(7)

In section 30G(1)(j), replace “and to which units may be transferred to and” with “or to which units may be transferred to or”.

(8)

In section 30G(1)(k), after “overseas registry”, insert “or international transaction body”.

(9)

In section 30G(1)(n), replace “the terms of the Convention and the Protocol” with “international climate change obligations”.

(10)

In section 30G(1)(n), replace “the Convention or the Protocol” with “international climate change obligations”.

(12)

In section 30G(4), replace “the Convention and the Protocol” with “international climate change obligations”.

50 Sections 30GA to 30H replaced

Replace sections 30GA to 30H with:

30GA Regulations for auctions to sell New Zealand units

(1)

The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations under this section that prescribe matters relating to the powers of the Minister under section 6A to sell New Zealand units by auction.

(2)

If regulations are to be made under this section, the Minister must recommend the making of regulations that—

(a)

specify the date on which the sale of New Zealand units by auction commences:

(b)

prescribe an indicative schedule for when auctions are planned to be held:

(c)

specify circumstances in which an auction will not be held:

(d)

specify the format of an auction (for example, a single-round, sealed bid format):

(e)

specify rules for the format of the auction (for example, rules on how bids are made and how tied bids are resolved):

(f)

specify criteria, and requirements for registration, that a person must satisfy to participate in an auction:

(g)

specify financial processes that a person must follow when participating in an auction, including requirements for financial assurance, payment, and delivery:

(h)

provide for the results of each auction to be made publicly available.

(3)

If regulations are to be made under this section, the Minister may recommend the making of regulations for any or all of the following purposes:

(a)

providing for pilot auctions to be conducted, whether before or after the date on which auctions commence:

(b)

prescribing offences and penalties for the breach of regulations made under this section or section 30GD:

(c)

prescribing infringement offences for the breach of regulations made under this section or section 30GD, and prescribing for those offences—

(i)

maximum fines not exceeding—

(A)

$3,000 for an individual:

(B)

$6,000 in any other case; and

(ii)

infringement fees not exceeding—

(A)

$1,000 for an individual:

(B)

$2,000 in any other case:

(d)

prescribing those infringement fees as different amounts for a first, second, or subsequent infringement offence:

(e)

providing for any other matters for the conduct of an auction that the Minister considers relevant to the effective conduct of the auction.

30GB Regulations about limits and price control settings for units

(1)

The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations under this section.

(2)

If regulations are to be made under section 30GA, the Minister must recommend the making of regulations under this section that—

(a)

prescribe the following limits for a calendar year:

(i)

a limit on the New Zealand units available by auction (an individual limit); and

(ii)

a limit on the approved overseas units used (another individual limit); and

(iii)

a limit on the sum of the following (the overall limit):

(A)

the New Zealand units available by auction:

(B)

the New Zealand units available by other means:

(C)

the approved overseas units used; and

(b)

provide that—

(i)

the individual limits must not be exceeded; and

(ii)

the overall limit—

(A)

restricts both the New Zealand units available by auction and the approved overseas units used, in that neither must cause the overall limit to be exceeded; but

(B)

does not restrict the New Zealand units available by other means, in that they may cause the overall limit to be exceeded; and

(c)

provide that any additional units that are allocated under section 86C(5)(b) are not counted as New Zealand units available by other means; and

(d)

provide for how a reserve amount of New Zealand units is to be released for sale at auction if a trigger price is reached or exceeded by bidding at an auction, unless the reserve amount and minimum price are set at zero under paragraph (e); and

(e)

prescribe the following price control settings:

(i)

the reserve amount of New Zealand units for each trigger price, which may be a single reserve amount of zero:

(ii)

the 1 or more trigger prices, unless the reserve amount is zero:

(iii)

the minimum price at which units may be sold by auction, which may be zero.

(3)

The Minister must recommend the making of regulations under this section so that,—

(a)

when the regulations are first made, they prescribe limits and price control settings for each of the next 5 or 6 calendar years; and

(b)

the regulations are amended to ensure that, at all times, they prescribe limits and price control settings for each of the next 5 calendar years.

(4)

Each time the Minister is to recommend that the regulations be amended to apply to a further calendar year under subsection (3)(b), the Minister—

(a)

must consider whether to recommend prescribing new limits and new price control settings for each of the 2 calendar years before that further calendar year; and

(b)

may recommend prescribing new limits and new price control settings for 1 or both of the 2 calendar years after the year in which the amendment is made.

(5)

However, the Minister may make a recommendation under subsection (4)(b) only if,—

(a)

in the year in which the amendment is made, the price control settings have had effect by—

(i)

the release of a reserve amount of units; or

(ii)

the sale of units at the minimum price; or

(b)

the Minister is satisfied that the amendment is justified by the following special circumstances:

(i)

a change that has significantly affected any matter that the Minister was required to consider under section 30GC when recommending the limits and price control settings that are to be amended; or

(ii)

a change in the budget or contribution described by section 30GC(2)(a) or (b) that applies to the year to which the amendment applies; or

(iii)

a force majeure event.

(6)

Regulations made under subsection (2)(a)(ii) may be made in respect of different units, transactions, persons, classes of units, subclasses of units, classes of transactions, or classes of persons.

(7)

See section 30GC for requirements relating to this section.

(8)

In this section,—

approved overseas units used means the number of approved overseas units used by participants in a calendar year by, for example, being transferred to holding accounts or being surrendered

New Zealand units available by auction means the number of New Zealand units sold by auction in a calendar year

New Zealand units available by other means means the number of New Zealand units that are allocated for eligible activities, or provided to participants under negotiated greenhouse agreements, in a calendar year.

Example

Regulations are first made under this section in December 2020. They must prescribe the individual limits, overall limits, and price control settings for the 5 (or 6) years from 2021 to 2025 (or 2026). In 2021, the regulations—

  • must be amended to apply (or in how they apply) to 2026; and

  • may be amended to prescribe new individual limits, overall limits, and price control settings for 2024 and 2025; and

  • may be amended to prescribe new price control settings for 2022 or 2023.

30GC Requirements for regulations about limits and price control settings for units

(1)

The Minister must comply with this section in—

(a)

recommending under section 30GB(2), (3), or (4)(b) the making of regulations that prescribe individual limits, overall limits, or price control settings; and

(b)

considering under section 30GB(4)(a) whether to recommend prescribing new individual limits, overall limits, and price control settings for the 2 calendar years before a further calendar year.

(2)

The Minister must be satisfied that the limits and price control settings are in accordance with—

(a)

the emissions budget, and the nationally determined contribution for New Zealand under the Paris Agreement, that applies to—

(i)

the period for which the limits or price control settings are being prescribed; or

(ii)

any period after that, if a budget or contribution exists for that period; and

(b)

the 2050 target.

(3)

However, they need not strictly accord with the budgets or contributions as long as the Minister is satisfied that the discrepancy is justified, after considering the other matters under this section.

(4)

The Minister must consider—

(a)

the main matters; and

(b)

the additional matters, but only in relation to the price control settings.

(5)

The main matters are as follows:

(a)

the projected trends for New Zealand’s greenhouse gas emissions in the 5 years after the current year, including—

(i)

the anticipated volumes of greenhouse gas emissions to which the emissions trading scheme applies (meaning emissions for which participants are required to submit returns or surrender units under this Act); and

(ii)

the anticipated volumes of greenhouse gas emissions to which the emissions trading scheme does not apply:

(b)

the proper functioning of the emissions trading scheme:

(c)

international climate change obligations and instruments or contracts that New Zealand has with other jurisdictions to access emissions reductions in their carbon markets:

(d)

the forecast availability and cost of ways to reduce greenhouse gas emissions that may be needed for New Zealand to meet its targets for the reduction of emissions:

(e)

the recommendations made by the Climate Change Commission under section 5ZOA:

(f)

any other matters that the Minister considers relevant.

(6)

The additional matters are as follows:

(a)

the impact of emissions prices on households and the economy:

(b)

the level and trajectory of international emissions prices (including price controls in linked markets):

(c)

inflation.

(7)

If the Minister makes a recommendation about prescribing limits or price control settings that differs from a recommendation made by the Commission under section 5ZOA, the Minister must, as soon as is reasonably practicable, prepare a report of the reasons for the difference and—

(a)

present a copy of the report to the House of Representatives; and

(b)

make the report publicly available.

30GD Regulations for auction monitor

(1)

The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations under this section.

(2)

If regulations are made, or are to be made, under section 30GA, the Minister may recommend the making of regulations under this section for any or all of the following purposes:

(a)

prescribing a method or process by which the Minister may appoint a person as an auction monitor, which must—

(i)

require the person to be independent of any auction agents and any persons who are likely to be auction participants; and

(ii)

include as functions of the auction monitor—

(A)

validating auction results; and

(B)

publishing reports on the results of auctions:

(b)

specifying that the auction monitor’s functions include any of the following:

(i)

monitoring the conduct of any auction agents and auction participants:

(ii)

providing periodic assessments of the auction system and making recommendations for improvements:

(iii)

calculating additional specified metrics in respect of the auction process and auction results (such as bid volume statistics and relevant aggregate information):

(iv)

any other functions that the Minister considers are relevant to the effective conduct of the auction monitor’s role.

(3)

In this section and section 30GE,—

auction agent means any agent appointed under section 6A(b) to conduct an auction

auction monitor means a person appointed as an auction monitor under regulations recommended under subsection (2)(a)

auction participant means a potential buyer who participates in an auction.

30GE Sharing information with auction monitor

(1)

The purpose of this section is to facilitate the provision of information—

(a)

from the EPA, the Registrar, the chief executive, or any auction agent (a provider):

(b)

to the auction monitor (if appointed).

(2)

A provider must provide information to the auction monitor if the information—

(a)

is requested by the auction monitor; and

(b)

is required by the auction monitor to assist in carrying out its functions.

30GF Obligation of confidentiality on auction monitor

(1)

This section applies to the auction monitor (if appointed) while, and after, the auction monitor performs its functions or exercises its powers.

(2)

The auction monitor—

(a)

must keep confidential all information that comes into its knowledge when performing its functions or exercising its powers; and

(b)

must not disclose any of that information, except—

(i)

with the consent of the person to whom the information relates or to whom the information is confidential; or

(ii)

to the extent that the information is already in the public domain; or

(iii)

for the purposes of, or in connection with, the performance of its functions or the exercise of its powers; or

(iv)

as provided under this Act or any other Act; or

(v)

in connection with any investigation or inquiry (whether or not preliminary to any proceedings) in respect of, or any proceedings for, an offence against this Act or any other Act; or

(vi)

for the purpose of complying with international climate change obligations.

(3)

The auction monitor commits an offence under section 30GG if the auction monitor knowingly contravenes this section.

(4)

Nothing in subsection (2) may be treated as prohibiting the auction monitor from—

(a)

providing or publishing general information in relation to its functions; or

(b)

with the prior approval of the Minister, preparing statistical information and supplying it to any person in a form that does not identify any individual.

30GG Offence for breach of auction monitor’s obligation of confidentiality

An auction monitor who knowingly acts in contravention of section 30GF commits an offence and is liable on conviction to either or both of the following:

(a)

imprisonment for a term not exceeding 6 months:

(b)

a fine not exceeding $15,000.

30H Consultation and commencement for certain regulations about units and auctions

(1)

This section applies to regulations made under—

(a)

section 30G(1)(b)(i), (c), (j), or (k) (dealings with units under Part 2):

(b)

section 30GA (auctions to sell New Zealand units):

(c)

section 30GB (limits and price controls for units):

(d)

section 30GD (auction monitor).

(2)

See sections 3A and 3B for consultation requirements that apply to the making of the regulations.

(3)

The regulations come into force—

(a)

3 months after the date of their notification in the Gazette, or on any later date specified in the regulations; but

(b)

if the Minister considers it is in the national interest that they be made urgently, on any earlier date specified in the regulations.

51 Section 30I amended (Incorporation by reference in regulations made under section 30G)

(1)

In section 30I(1)(a) and (b)(i) and (ii), replace “the Convention or the Protocol” with “international climate change obligations”.

(2)

In section 30I(4), replace “sections 163 to 165, 167, and 168” with “a relevant empowering section”.

52 New section 30IA inserted (Minister must obtain greenhouse gas reductions to match certain excess units)

After section 30I, insert:

30IA Minister must obtain greenhouse gas reductions to match certain excess units

(1)

This section applies to the following New Zealand units (if any) to the extent that they cause the emissions budget for an emissions budget period to be exceeded:

(a)

the units sold by auction, after being released in a reserve amount, in that period:

(b)

the units allocated for eligible activities, or provided to participants under negotiated greenhouse agreements, in that period.

(2)

The Minister must ensure, or enter into agreements that require, that the emission of greenhouse gases is reduced, or the removal of greenhouse gases from the atmosphere is increased, by 1 tonne of carbon dioxide equivalent for each of the units, whether by domestic means or offshore mitigation.

(3)

The deadline for the Minister to do so is as soon as is reasonably practicable after the end of the emissions budget period.

53 Section 30J amended (Signing false declaration with respect to regulations made under section 30G)

(1)

In the heading to section 30J, after section 30G, insert or 30GA.

(2)

In section 30J, after “section 30G”, insert “or 30GA and that is false”.

54 New subpart 3 of Part 2 inserted

After section 30K, insert:

Subpart 3—Infringement offences

30L Meaning of infringement offence and infringement fee

In this subpart,—

infringement fee, for an infringement offence, means the infringement fee for the offence prescribed in regulations made under this Act

infringement offence means an offence prescribed as an infringement offence by regulations made under this Act.

30M Regulations about infringement offences

(1)

The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations for any or all of the following purposes:

(a)

prescribing infringement offences by—

(i)

prescribing a duty, restriction, or prohibition for conduct that is similar to conduct, or similar to an element of conduct, for which there is a duty, restriction, or prohibition under any of sections 30J, 30K(1), 46, 47, 48, 129, 131, 132(1)(a), (b), and (f) to (i), 259, 260, 261(1)(a), (b), (d), and (e), and 264; and

(ii)

providing that a contravention of the duty, restriction, or prohibition is an infringement offence:

(b)

prescribing for the infringement offences—

(i)

maximum fines not exceeding—

(A)

$3,000 for an individual:

(B)

$6,000 in any other case; and

(ii)

infringement fees not exceeding—

(A)

$1,000 for an individual:

(B)

$2,000 in any other case:

(c)

prescribing those infringement fees as different amounts for a first, second, or subsequent infringement offence:

(d)

providing for any other matters contemplated by this subpart, necessary for its administration, or necessary for giving it full effect.

(2)

Before the Minister recommends the making of regulations under subsection (1)(a), the Minister must be satisfied, after consulting the Minister of Justice, that a contravention of each duty, restriction, or prohibition is sufficiently minor to be appropriate as an infringement offence.

(3)

A person may be prosecuted for, and convicted of, an offence against any provision referred to in subsection (1)(a)(i) even if their conduct is or may be an infringement offence.

30N Consultation and commencement for regulations about infringement offences

(1)

This section applies to regulations made under section 30M.

(2)

See sections 3A and 3B for consultation requirements that apply to the making of the regulations.

(3)

The regulations come into force 3 months after the date of their notification in the Gazette, or on any later date specified in the regulations.

30O Proceedings for infringement offences

(1)

A person who is alleged to have committed an infringement offence may—

(a)

be proceeded against by the filing of a charging document under section 14 of the Criminal Procedure Act 2011; or

(b)

be issued with an infringement notice under section 30Q.

(2)

Proceedings commenced in the way described in subsection (1)(a) do not require the leave of a District Court Judge or Registrar under section 21(1)(a) of the Summary Proceedings Act 1957.

(3)

See section 21 of the Summary Proceedings Act 1957 for the procedure that applies if an infringement notice is issued.

30P Appointment of enforcement officers

(1)

The EPA may appoint 1 or more persons who are employees of the EPA as enforcement officers to exercise 1 or more of the powers and perform the functions conferred on enforcement officers under this subpart.

(2)

Section 93(2) to (5) applies in relation to the appointment.

30Q When infringement notice may be issued

(1)

An enforcement officer may issue an infringement notice to a person if the enforcement officer believes on reasonable grounds that the person is committing, or has committed, an infringement offence.

(2)

The enforcement officer may require the person to provide their full name and any other information required so that the enforcement officer can issue the infringement notice.

30R Infringement notice may be revoked

(1)

The enforcement officer may revoke an infringement notice before the infringement fee is paid or an order for payment of a fine is made or deemed to be made by a court under section 21 of the Summary Proceedings Act 1957.

(2)

An infringement notice is revoked by giving written notice to the person to whom it was issued that the notice is revoked.

(3)

The revocation of an infringement notice under this section is not a bar to any other enforcement action against the person to whom the notice was issued in respect of the same matter.

30S What infringement notice must contain

(1)

An infringement notice must be in the form prescribed in regulations and must contain the following particulars:

(a)

details of the alleged infringement offence that fairly inform a person of the nature of the alleged offence, including, to any applicable extent, the time and place of the alleged offence:

(b)

the amount of the infringement fee:

(c)

the address of the EPA:

(d)

how the infringement fee may be paid:

(e)

the time within which the infringement fee must be paid:

(f)

a summary of the provisions of section 21(10) of the Summary Proceedings Act 1957:

(g)

a statement that the person served with the notice has a right to request a hearing:

(h)

a statement of what will happen if the person served with the notice neither pays the infringement fee nor requests a hearing:

(i)

any other matters prescribed in regulations.

(2)

The particulars contained in the notice under subsection (1)(d) must include at least 1 method of payment in person.

30T How infringement notice may be served

(1)

An infringement notice may be served on the person who the enforcement officer believes is committing or has committed the infringement offence by—

(a)

delivering it to the person or, if the person refuses to accept it, bringing it to the person’s notice; or

(b)

leaving it for the person at the person’s last known place of residence with another person who appears to be of or over the age of 14 years; or

(c)

leaving it for the person at the person’s place of business, or place of work, with another person; or

(d)

sending it to the person by prepaid post addressed to—

(i)

the mailing address recorded in a register kept by the EPA under this Act for the person or any primary representative of the person, if they are an account holder; or

(ii)

the person’s last known place of residence or place of business or work; or

(e)

sending it to,—

(i)

if the person is an account holder, the electronic address recorded in a register kept by the EPA under this Act for the person or any primary representative of the person; or

(ii)

if the person does not have a known place of residence or business in New Zealand, an electronic address of the person.

(2)

An infringement notice (or a copy of it) sent by prepaid post to a person under subsection (1) is to be treated as having been served on the person on the fifth working day after the date on which it was posted.

30U Payment of infringement fees

All infringement fees paid in respect of infringement offences must be paid into a Crown Bank Account.

30V Reminder notices

A reminder notice must be in the form prescribed in regulations, and must include the same particulars, or substantially the same particulars, as the infringement notice.

55 Section 31 amended (Meaning of greenhouse gas)

(1)

In section 31, replace “subpart” with “Part”.

(2)

In section 31, delete “, but does not include a gas that is covered by the Montreal Protocol on Substances that Deplete the Ozone Layer”.

56 Section 32 amended (Primary functions of inventory agency)

(1)

After section 32(1)(b)(i), insert:

(ia)

any report of information by New Zealand under Article 13 of the Paris Agreement; and

57 Section 35 amended (Publication)

In section 35, replace “and its national communication (or periodic report) in electronic form by placing the report” with “, national inventory report, and national communication (or periodic report) in electronic form by placing the reports”.

58 Section 36 amended (Authorisation of inspectors)

In section 36(1)(c), replace “New Zealand Pastoral Agriculture Research Institute” with “AgResearch”.

59 Section 48 amended (Signing false declaration in respect of regulations made under section 50)

In section 48, after “section 50”, insert “and that is false”.

60 Section 49 amended (Reporting)

In section 49, replace “under the Convention and the Protocol” with “in accordance with international climate change obligations”.

61 Section 50 amended (Regulations)

(1)

In section 50(1)(j), replace “the terms of the Convention and the Protocol” with “international climate change obligations”.

(2)

In section 50(1)(j), replace “with the Convention or the Protocol” with “with international climate change obligations”.

(3)

In section 50(2), replace “If recommended by the Minister, the Governor-General may, by Order in Council” with “The Governor-General may, by Order in Council made on the recommendation of the Minister”.

(4)

In section 50(2)(k), replace “the Convention or the Protocol” with “international climate change obligations”.

(5)

In section 50(3), replace “If recommended by the Minister, the Governor-General may, by Order in Council” with “The Governor-General may, by Order in Council made on the recommendation of the Minister”.

(6)

Replace section 50(7)(b) and (c) with:

(b)

international climate change obligations.

(7)

Replace section 50(8) with:

(8)

The Governor-General may, by Order in Council, amend or replace Schedule 1, 2, or 2A so that the schedule sets out an up-to-date form of the relevant document (the Convention, the Protocol, or the Paris Agreement).

62 Section 51 amended (Incorporation by reference in regulations made under section 50)

(1)

In section 51(1)(a) and (b)(i) and (ii), replace “the Convention or the Protocol” with “international climate change obligations”.

(2)

In section 51(4), replace “sections 163 to 165, 167, and 168” with “a relevant empowering section”.

63 Section 52 amended (Inventory agency must report to Minister on certain matters before certain regulations are made)

(1)

In section 52(3)(b), replace “make, as he or she thinks fit, recommendations to the Governor-General to make” with “recommend the making of”.

(2)

In section 52(4), replace “obligations under the Convention or the Protocol” with “international climate change obligations”.

64 Section 53 repealed (Consequential amendments)

Repeal section 53.

65 Section 54 amended (Participants)

(1)

In section 54(1)(a)(i) and (2), after “section 180,”, insert “186I,”.

(2)

In section 54(1)(b)(ii), replace “section 192” with “Part 5”.

(3)

In section 54(2), replace “this Part or Part 5” with “the ETS participant provisions”.

66 Section 55 amended (Associated persons)

In section 55(3)(b), replace “this Part and Part 5” with “the ETS participant provisions”.

67 Section 56 amended (Registration as participant in respect of activities listed in Schedule 3)

After section 56(4), insert:

(5)

To avoid doubt, a person does not carry out an activity listed in Schedule 3, and so does not have to notify the EPA under subsection (1)(a), merely because they—

(a)

deforest pre-1990 forest land that may not be treated as deforested under section 179A(1)(b); or

(b)

deforest land that has ceased to be forest land (and pre-1990 forest land) because it has been offset by pre-1990 offsetting forest land.

68 Section 57 amended (Applicant to be registered as participant in respect of activities listed in Schedule 4)

(1)

In section 57(4)(b), replace “this Part or Part 5” with “the ETS participant provisions”.

(2)

Replace section 57(6) with:

(6)

After registering a person under subsection (5), the EPA must notify the person that they have been registered as a participant in respect of the activity and the date from which the registration will take effect.

(3)

In section 57(8), replace “section 198(2)(b), or 209(2)(b)” with “section 198(2) or 209(2)”.

69 Section 58 amended (Removal from register of participants in respect of activities listed in Schedule 4)

(2)

In section 58(4), replace “section 188(7)(a)(ii), 198(3)(b), or 209(3)(b)” with “section 188(7), 198(3), or 209(3)”.

70 Section 59 amended (Removal from register of participants in respect of activities listed in Schedules 3 and 4)

In section 59(2)(b), delete “, and any other person specified in section 188(7)(a)(i), 198(3)(a), or 209(3)(a), as the case may require,”.

71 New section 59A inserted (Removal from register if participant never carried out activity)

After section 59, insert:

59A Removal from register if participant never carried out activity

(1)

The EPA must remove the name of a person from the register in respect of an activity if the EPA is satisfied that the person is not carrying out the activity and has never carried out the activity.

(2)

At least 60 days before removing the name of the person from the register, the EPA must notify the person—

(a)

that the EPA proposes to remove the name of the person from the register; and

(b)

of the reason for the proposed removal; and

(c)

of the actions that the person may take to prevent the removal (for example, provide evidence that the person carries out the activity).

(3)

The EPA may still take action under this section if it is unable to notify the person of its proposal to do so because it is not reasonably practicable to locate them or their address.

72 Section 60 amended (Exemptions in respect of activities listed in Schedule 3)

(1)

After section 60(1A), insert:

(1B)

To avoid doubt, an order made under subsection (1) may exempt a person from being a participant in respect of an activity or emissions that occurred before or after the commencement of the order.

(2)

In section 60(2)(a), and (3)(a) and (b), replace “greenhouse gas emissions trading scheme established under this Act” with “emissions trading scheme”.

(3)

In section 60(4), replace “this Part and Part 5” with “the ETS participant provisions”.

(4)

Replace section 60(5) with:

(5)

See sections 3A and 3B for consultation requirements that apply to the making or revocation of an order under this section.

(5)

In section 60(6), replace “make a recommendation for” with “recommend”.

73 New sections 60A and 60B inserted

After section 60, insert:

60A Exemption for participants in activity listed in Part 1 of Schedule 4

(1)

The Governor-General may, by Order in Council made on the recommendation of the Minister, exempt any person or class of persons carrying out an activity listed in Part 1 of Schedule 4 from any provision or provisions of—

(a)

Part 4 or 5; or

(b)

regulations made for the purposes of Part 4 or 5.

(2)

An order under this section may—

(a)

specify any terms and conditions of the exemption that the Governor-General thinks fit:

(b)

exempt a person generally, or in respect of a specified act, matter, or thing, or class of acts, matters, or things:

(c)

exempt a person in respect of something that occurred before the order was made:

(d)

require the EPA to deal with emissions returns or applications, update the register, or take other actions in respect of acts, matters, or things affected by the exemption.

(3)

The Minister must not recommend the making of an order under this section unless satisfied that—

(a)

the order will not materially undermine the environmental integrity of the emissions trading scheme; and

(b)

the costs of making the order do not exceed the benefits of making the order.

(4)

In determining whether to recommend the making of an order under this section, the Minister must have regard to the following:

(a)

the need to maintain the environmental integrity of the emissions trading scheme:

(b)

the desirability of minimising any compliance and administrative costs associated with the emissions trading scheme:

(c)

the relative costs of giving the exemption or not giving it, and who bears the costs:

(d)

any alternatives that are available for achieving the objectives of the Minister in respect of giving the exemption:

(e)

any other matters that the Minister considers relevant.

(5)

See sections 3A and 3B for consultation requirements that apply to the making or revocation of an order under this section.

60B Incorporation by reference in order made under section 60 or 60A

(1)

The following written material may be incorporated by reference in an order made under section 60 or 60A:

(a)

decisions, computer programmes, rules, guidelines, principles, measures, methodologies, modalities, procedures, mechanisms, or other matters; and

(b)

standards, requirements, or recommended practices of a government agency, standard-setting organisation, or professional body.

(2)

Material may be incorporated by reference in the order—

(a)

in whole or in part; and

(b)

with modifications, additions, or variations specified in the order.

(3)

Material incorporated by reference in the order has legal effect as part of the order.

(4)

Sections 170 to 177 apply to material incorporated by reference in the order as if—

(a)

references to regulations, or regulations made under a relevant empowering section, were references to the order, or to another order made under section 60 or 60A, as appropriate; and

(b)

sections 173(2)(c) and (4)(b) and 174(1)(d) required a targeted notice instead of a notice in the Gazette, but section 174(1)(d) does not apply to material described by section 174(2)(b).

(5)

In subsection (4)(b), targeted notice means a notice to, or that is likely to come to the attention of, the persons that the chief executive considers are likely to be substantially affected by the making of the relevant regulations.

74 Section 61 amended (Requirement to have holding account)

In section 61(1)(a) and (b), replace “this Part or Part 5” with “the ETS participant provisions”.

75 Section 63 amended (Liability to surrender units to cover emissions)

After section 63(3), insert:

(4)

If the provision of this Act that imposes a liability to surrender or repay units does not specify the deadline for doing so, the deadline is within 60 working days after the EPA gives the person a notice requiring the surrender or repayment.

76 Section 64 amended (Entitlement to receive New Zealand units for removal activities)

(1)

After section 64(1), insert:

(1A)

Subsection (1) does not apply to removals for which a participant is not entitled to receive units under section 197 (grant-funded forests).

(2)

Replace section 64(3) with:

(3)

Subsection (2) does not apply—

(a)

if, within 20 working days of the EPA receiving the emissions return, the EPA or an enforcement officer serves notice on the participant under section 94 requiring the participant to provide information in respect of any matter contained in the emissions return; or

(b)

to the extent that subsection (4) requires units to be transferred elsewhere.

(4)

The EPA must apply section 64A as follows:

(a)

the units the participant is entitled to receive are the potential transfer units:

(b)

the participant is the recipient:

(c)

the end of the emissions return period for the emissions return is the relevant time.

77 New section 64A inserted (Transfer of units allocated, or entitled to be received or reimbursed, less any units that must be surrendered or repaid)

After section 64, insert:

64A Transfer of units allocated, or entitled to be received or reimbursed, less any units that must be surrendered or repaid

(1)

If this section applies, the EPA must calculate the specified units (if any) by counting as follows the units that the recipient was required to, but did not, surrender, or repay to a Crown holding account, by or before the relevant time:

(a)

starting from the units that were required to be surrendered or repaid by the earliest dates; but

(b)

stopping once they equal the number of potential transfer units (if they do).

(2)

If there are any specified units, the EPA must notify the recipient of the following:

(a)

the number of specified units required for surrender:

(b)

the number of specified units required for repayment:

(c)

that the specified units will be deducted from the potential transfer units when they are transferred to the recipient, excluding any specified units that have already been surrendered or repaid by then.

(3)

The EPA must direct the Registrar to transfer—

(a)

the specified units required for surrender to a surrender account designated by the EPA; and

(b)

the specified units required for repayment to a Crown holding account designated by the EPA; and

(c)

any potential transfer units left after the specified units are deducted to the recipient’s holding account.

(4)

However, the Registrar, in transferring—

(a)

any units under subsection (3), must exclude any specified units that have already been surrendered or repaid by then:

(b)

any specified units under subsection (3)(a) or (b), may first transfer them to the recipient’s holding account and then immediately transfer them from that holding account.

(5)

The transfer of any specified units for surrender or repayment satisfies—

(a)

the recipient’s entitlement to be transferred those units; and

(b)

the recipient’s obligation to surrender or repay the related units.

(6)

To avoid doubt, the recipient remains liable to surrender or repay any units that are not counted as specified units (because they exceed the number of potential transfer units).

78 Section 65 amended (Annual emissions returns)

(1)

In section 65(2A)(a), replace “do” with “does”.

(2)

Replace section 65(4) and (5) with:

(4)

Following the submission of an annual emissions return under subsection (1),—

(a)

a participant (other than a participant carrying out an activity listed in Part 5 of Schedule 3) must, by 31 May, surrender the number of units listed in the participant’s assessment under subsection (2)(c)(i) or recorded under subsection (2A)(b); and

(b)

a participant carrying out an activity listed in Part 5 of Schedule 3 must, by 31 May, surrender the number of units listed in the participant’s assessment under subsection (2)(c)(i) less the number of units allocated to the participant for the year to which the assessment relates under section 86BA.

(5)

To avoid doubt, a person does not carry out an activity listed in Schedule 3, and so does not have to submit an annual emissions return under subsection (1)(a), merely because they—

(a)

deforest pre-1990 forest land that may not be treated as deforested under section 179A(1)(b); or

(b)

deforest land that has ceased to be forest land (and pre-1990 forest land) because it has been offset by pre-1990 offsetting forest land.

79 Section 68 amended (Issuing New Zealand units)

(1)

Replace section 68(2)(b)(i) and (ii) with:

(ii)

international climate change obligations; and

(2)

In section 68(2)(b)(iii), replace “greenhouse gas emissions trading scheme established under this Act” with “emissions trading scheme”.

(3)

In section 68(2)(c), replace “1 January 2013, and if there is no subsequent commitment period specified or determined under the Protocol or no successor international agreement to the Protocol” with “1 January 2031, and if the Paris Agreement does not provide for a commitment period that starts on that date”.

(4)

Replace section 68(2)(c)(iii) with:

(iii)

international climate change obligations; and

80 Section 69 repealed (Notification of intention regarding New Zealand units)

Repeal section 69.

81 Cross-heading above section 70 amended

In the cross-heading above section 70, delete and fishing.

82 Sections 70 to 79 replaced

Replace sections 70 to 79 with:

70 Allocation plan issued

(1)

The Climate Change (Pre-1990 Forest Land Allocation Plan) Order 2010 was made under this section to issue an allocation plan in respect of pre-1990 forest land.

(2)

The allocation plan may be revoked but not amended or replaced.

(3)

The allocation plan came into force on the day after the date it was presented to the House of Representatives.

(4)

The allocation plan is a legislative instrument and a disallowable instrument for the purposes of the Legislation Act 2012 and must be presented to the House of Representatives under section 41 of that Act.

83 Section 81 amended (Entitlement to provisional allocation for eligible industrial activities)

(1)

In section 81, formula, replace the definition of variable LA with:

LA

is the level of assistance for the eligible industrial activity for the year, being,—

(a)

for a moderately emissions-intensive eligible industrial activity,—

(i)

0.6 in each year until and including 2020; and

(ii)

in each year after 2020, the level of assistance from the previous year less the applicable phase-out rate:

(b)

for a highly emissions-intensive eligible industrial activity,—

(i)

0.9 in each year until and including 2020; and

(ii)

in each year after 2020, the level of assistance from the previous year less the applicable phase-out rate

(2)

In section 81, insert as subsection (2):

(2)

In this section, the applicable phase-out rate is,—

(a)

if regulations have not been made under section 84A or 84B that relate to the eligible industrial activity,—

(i)

0.01 for each year after 2020 until and including 2030; and

(ii)

0.02 for each year after 2030 until and including 2040; and

(iii)

0.03 for each year after 2040; and

(b)

if regulations have been made under section 84A or 84B that set a different phase-out rate for the eligible industrial activity for the year, the phase-out rate set under those regulations.

84 Section 83 amended (Annual allocation adjustment)

(1)

In section 83(2), formula, replace the definition of variable LA with:

LA

is the level of assistance for the activity for the year, being,—

(a)

for a moderately emissions-intensive eligible industrial activity,—

(i)

0.6 in each year until and including 2020; and

(ii)

in each year after 2020, the level of assistance from the previous year less the applicable phase-out rate:

(b)

for a highly emissions-intensive eligible industrial activity,—

(i)

0.9 in each year until and including 2020; and

(ii)

in each year after 2020, the level of assistance from the previous year less the applicable phase-out rate

(2)

After section 83(2), insert:

(2A)

In subsection (2), the applicable phase-out rate is,—

(a)

if regulations have not been made under section 84A or 84B that relate to the eligible industrial activity,–

(i)

0.01 for each year after 2020 until and including 2030; and

(ii)

0.02 for each year after 2030 until and including 2040; and

(iii)

0.03 for each year after 2040; and

(b)

if regulations have been made under section 84A or 84B that set a different phase-out rate for the eligible industrial activity for the year, the phase-out rate set under those regulations.

(3)

Replace section 83(7) with:

(7)

If a person is required to repay units under this section, then the units repaid must be of a type that may be transferred to a surrender account at the time the units are repaid.

85 New sections 84A to 84C inserted

After section 84, insert:

84A Regulations setting decreased phase-out rates

(1)

The Governor-General may, by Order in Council made on the recommendation of the Minister, make or amend regulations to set a decreased phase-out rate to be used—

(a)

in respect of 1 or more eligible industrial activities for the purposes of sections 81(1) and 83(2); and

(b)

for a year or years beginning on or after 1 January 2031.

(2)

The Minister must not recommend the making or amendment of regulations under this section to set a decreased phase-out rate for an eligible industrial activity unless—

(a)

the Climate Change Commission has recommended (under section 5ZOB) that a decreased phase-out rate should be set for the activity; and

(b)

the Minister has considered the recommendation and complied with the requirements of section 84C.

(3)

In order to apply to a year, the regulations must be made or amended before the beginning of the year.

(4)

In this section, decreased phase-out rate means any rate that, even if it is more than a rate previously set by regulations under this section, is—

(a)

less than the rate in sections 81(2)(a) and 83(2A)(a); and

(b)

at least—

(i)

0.01 for a year in the period beginning on 1 January 2031 and ending on 31 December 2040; or

(ii)

0.02 for a year in the period beginning on 1 January 2041 and ending on 31 December 2050.

84B Regulations setting increased phase-out rates

(1)

The Governor-General may, by Order in Council made on the recommendation of the Minister, make or amend regulations to set an increased phase-out rate to be used—

(a)

in respect of 1 or more eligible industrial activities for the purposes of sections 81(1) and 83(2); and

(b)

for an emissions budget period beginning on or after 1 January 2026.

(2)

Regulations made in respect of an emissions budget period must include a statement of what phase-out rate the Minister intends to set in respect of the subsequent emissions budget period.

(3)

The Minister must not recommend the making or amendment of regulations under this section to set an increased phase-out rate for an eligible industrial activity unless—

(a)

the Climate Change Commission has recommended (under section 5ZOB) whether or not an increased phase-out rate should be set for the activity; and

(b)

the Minister has considered the recommendation and complied with the requirements of section 84C.

(4)

In order to apply to an emissions budget period, the regulations must be made or amended before the beginning of the emissions budget period.

(5)

However, the regulations may apply to an emissions budget period, despite being made or amended during that period, if—

(a)

the emissions budget for the emissions budget period has been revised; or

(b)

the Minister is satisfied that, since the regulations were made or last considered, there has been a significant change that affects the considerations listed in section 84C(3).

(6)

In this section, increased phase-out rate means any rate that is more than, or the same as, the rate in sections 81(2)(a) and 83(2A)(a), even if it is less than a rate previously set by regulations under this section.

84C Procedure for regulations setting phase-out rates

(1)

Before recommending the making or amendment of regulations under section 84A or 84B, the Minister must be satisfied that the regulations or amendments are consistent with meeting the emissions budget that will apply when the regulations or amendments are in force.

(2)

See sections 3A and 3B for consultation requirements that apply to the making or amendment of regulations under section 84A or 84B.

(3)

Before recommending the making or amendment of regulations under section 84B in respect of an eligible industrial activity, the Minister must consider—

(a)

any targets or budgets set for reducing emissions of greenhouse gases; and

(b)

New Zealand’s nationally determined contributions under the Paris Agreement; and

(c)

the level of risk of emissions leakage (increased emissions overseas as a result of emissions reductions in New Zealand, for example, an activity being relocated outside of New Zealand to reduce the emissions-related costs for the activity), based on—

(i)

the emissions-related costs and policies in competing jurisdictions; and

(ii)

the markets for international trade in the products produced by the activity; and

(iii)

the ability of affected eligible persons to pass on increased costs to customers; and

(d)

the risk that the value of the allocation for the activity will exceed the cost of meeting the emissions trading scheme obligations in relation to the activity; and

(e)

other sources of supply into the emissions trading scheme, including offshore emissions reductions; and

(f)

the availability of low-emission technologies related to the activity; and

(g)

international climate change obligations; and

(h)

the proper functioning of the emissions trading scheme; and

(i)

the cost to the taxpayer of providing allocations for the activity; and

(j)

the recommendations made by the Climate Change Commission under section 5ZOB; and

(k)

any other matters that the Minister considers relevant.

(4)

Subsection (5) applies if—

(a)

the Minister decides to recommend the making of regulations under section 84A or 84B but not as recommended by the Commission; or

(b)

the Minister decides to recommend the amending of regulations under section 84A or 84B but the Commission—

(i)

recommended that they be amended differently; or

(ii)

did not recommend that they be amended at all; or

(c)

the Minister decides not to recommend the making or amending of regulations under section 84A or 84B despite the recommendation of the Commission.

(5)

The Minister must, as soon as is reasonably practicable, but within 16 weeks, after receiving the Commission’s recommendation, prepare a report of the reasons for the difference between the Minister’s and the Commission’s recommendation and—

(a)

present a copy of the report to the House of Representatives; and

(b)

make the report publicly available.

86 Section 85 amended (Allocation of New Zealand units in relation to agriculture)

In section 85(2), formula, definition of variable LA, paragraph (a), replace “0.9” with “0.95”.

87 Section 85A amended (Temporary suspension of phase-out rates for assistance under sections 81, 83(2), and 85(2))

(1)

Replace the heading to section 85A with Temporary suspension of phase-out rate for assistance under section 85(2).

(2)

In section 85A(1), replace “rates” with “rate”.

(3)

In section 85A(1) and (2), replace “sections 81, 83(2), and 85(2)” with “section 85(2)”.

(4)

In section 85A(2)(a), replace “rates in those sections may not reduce the level of assistance for an eligible activity from its 2012 level or the level in the first year in which full surrender obligations are applicable for the activity (as the case may be)” with “rate in that section may not reduce the level of assistance for an eligible activity from the level in the first year in which full surrender obligations are applicable for the activity”.

(5)

In section 85A(2)(b), delete “relevant”.

(6)

Replace section 85A(3) with:

(2A)

Before recommending the making of an Order in Council under subsection (2)(a)(ii), the Minister must consider the advice of the Climate Change Commission about whether the phase-out rates should continue to be suspended.

(3)

The Minister must not make a recommendation under subsection (2)(a)(ii) before surrender obligations for the relevant participants start.

88 Section 86 amended (Applications for allocation of New Zealand units for industry and agriculture)

Replace section 86(1) with:

(1)

An eligible person who wishes to be allocated New Zealand units for an eligible industrial activity or eligible agricultural activity under this subpart must apply to the EPA in the relevant period under subsection (1A), unless this subpart otherwise provides.

(1A)

The application must be made,—

(a)

for a provisional allocation for an eligible industrial activity, in the period starting on 1 January and ending on 30 April in the year in respect of which the allocation is sought:

(b)

for an allocation for an eligible industrial activity (other than a provisional allocation), in the period starting on 1 January and ending on 30 April in the year after the year in respect of which the allocation is sought:

(c)

for an allocation for an eligible agricultural activity, in the period starting on 1 January and ending on 31 March in the year after the year in respect of which the allocation is sought.

89 Section 86A amended (Provisional allocation to industry in and after 2013)

In section 86A, replace “section 86(1)(a)” with “section 86(1A)(a)”.

90 Section 86B amended (Decisions on applications for allocations of New Zealand units to industry and agriculture)

(1)

In the heading to section 86B, delete and agriculture.

(2)

In section 86B(1), after “section 86”, insert “in respect of an eligible industrial activity”.

(3)

In section 86B(2)(a)(i), delete “, in the case of an eligible industrial activity,”.

(4)

Replace section 86B(2)(b) with:

(b)

comply with section 86BB, as long as the number of units allocated is greater than zero, even after any adjustment made under subsection (1).

91 New sections 86BA to 86BC inserted

After section 86B, insert:

86BA Decisions on applications for allocations of New Zealand units to agriculture

(1)

This section applies if—

(a)

the EPA receives an application under section 86 in respect of an eligible agricultural activity; and

(b)

the applicant has submitted any emissions returns that are due.

(2)

The EPA must decide—

(a)

whether the applicant is eligible to receive an allocation in respect of the application:

(b)

if in the EPA’s opinion the applicant is eligible for an allocation, the number of units the applicant is entitled to be allocated.

(3)

If the EPA decides that an applicant is entitled to receive an allocation, then the EPA must—

(a)

notify the applicant of—

(i)

the number of units the applicant has been allocated; and

(ii)

the person’s right under section 144 to seek a review of the allocation decision; and

(b)

comply with section 86BC.

(4)

If the EPA decides that an applicant is not eligible to receive an allocation, then the EPA must notify the applicant of—

(a)

the EPA’s decision; and

(b)

the reasons for the decision; and

(c)

the person’s right under section 144 to seek a review of the allocation decision.

(5)

The EPA must, as soon as practicable after deciding an eligible person’s allocation for an eligible agricultural activity in respect of a year,—

(a)

publish the decision in the Gazette; and

(b)

ensure that it is accessible via the Internet site of the EPA.

(6)

However, the EPA is not required to publish the allocation of an eligible person for an eligible agricultural activity in respect of a year, or ensure that it is accessible via the Internet, if the EPA considers that publishing that information would be likely to prejudice unreasonably the commercial position of the eligible person who received the allocation.

86BB Transfer of allocated units to industry, less any units that must be surrendered or repaid

The EPA must apply section 64A as follows:

(a)

the units allocated to an applicant under section 86B, after any adjustment made under section 86B(1), are the potential transfer units:

(b)

the applicant is the recipient:

(c)

the start of the year to which the allocation relates is the relevant time.

86BC Transfer of allocated units to agriculture, less any units that must be surrendered or repaid

(1)

This section applies to the units allocated to an applicant under section 86BA (the potential transfer units).

(2)

The EPA must calculate the specified units by counting units in the following order, but stopping once they equal the number of potential transfer units (if they do):

(a)

first, the units required for surrender as a result of the assessment for the year to which the allocation relates:

(b)

second, the units (if any) that the applicant was required to, but did not, surrender, or repay to a Crown holding account, as a result of an assessment for an earlier year, starting from the units that were required to be surrendered or repaid by the earliest dates.

(3)

The EPA must notify the applicant of the following:

(a)

the number of specified units calculated under subsection (2)(a) that are required for surrender:

(b)

the number of specified units calculated under subsection (2)(b) that are required for surrender:

(c)

the number of specified units calculated under subsection (2)(b) that are required for repayment:

(d)

that the specified units will be deducted from the potential transfer units when they are transferred to the applicant, excluding any specified units that have already been surrendered or repaid by then.

(4)

The EPA must direct the Registrar to transfer—

(a)

the specified units required for surrender to a surrender account designated by the EPA; and

(b)

the specified units required for repayment to a Crown holding account designated by the EPA; and

(c)

any potential transfer units left after the specified units are deducted to the applicant’s holding account.

(5)

However, the Registrar, in transferring—

(a)

any units under subsection (4), must exclude any specified units that have already been surrendered or repaid by then:

(b)

any specified units under subsection (4)(a) or (b), may first transfer them to the applicant’s holding account and then immediately transfer them from that holding account.

(6)

The transfer of any specified units for surrender or repayment satisfies—

(a)

the applicant’s entitlement to be transferred those units; and

(b)

the applicant’s obligation to surrender or repay the related units.

(7)

To avoid doubt, the applicant remains liable to surrender or repay any units that are not counted as specified units (because they exceed the number of potential transfer units).

92 Section 86C amended (Reconsideration of allocation decisions)

(1)

In section 86C(1), after “section 86B”, insert “or 86BA”.

(2)

93 Section 86E amended (Minister or EPA or chief executive may require further information for purpose of carrying out functions under subpart)

(1)

In the heading to section 86E, replace Minister or EPA or chief executive with EPA.

(2)

In section 86E(1), replace “a determination under section 77 or 78 or a decision under section 86B, the Minister or EPA or chief executive, as appropriate,” with “a decision under section 86B or 86BA, the EPA”.

(3)

In section 86E(1), replace “the Minister or EPA or chief executive” with “the EPA”.

(4)

In section 86E(1)(c), replace “a determination or decision” with “the decision”.

(5)

In section 86E(2), delete “determination or”.

(6)

Replace section 86E(4) with:

(4)

The EPA may, for the purpose of verifying whether a decision made under section 86B or 86BA was correct or whether it should be reconsidered, give a notice to a person who has been allocated New Zealand units under that section requiring the person to supply to the EPA any records, data, or other information that the person is required to keep in relation to the allocation.

(7)

Replace section 86E(6) with:

(6)

A person who fails to comply with a notice under this section within the period specified in the notice, or any further period agreed with the EPA, and who has applied for an allocation under section 86, is not entitled to receive an allocation in respect of that application.

94 Section 87 amended (Functions of EPA)

(1)

In section 87(1)(b), (e), and (g), replace “this Part and Part 5” with “the ETS participant provisions”.

(2)

In section 87(1)(e), replace “and the provisions of any regulations made under this Part” with “and any regulations made under those provisions”.

95 Section 88 amended (Directions to EPA)

In section 88(1), replace “this Part, Part 5, or any regulations made under this Part or Part 5” with “the ETS participant provisions or any regulations made under those provisions”.

96 Section 89 amended (EPA to publish certain information)

(1)

In section 89(1), replace “in accordance with subsection (2)” with “for each reporting year”.

(2)

In section 89(1)(e), replace “subsections (3) and (4)” with “subsection (4)”.

(3)

In section 89(1)(f)(i), replace “under section 65(1), 118(2), 189(4), 191, or 193” with “required by this Act”.

(4)

In section 89(1)(f)(ii), replace “under section 65(4), 118(5), 123(3) or (6), 125, 189, 191, or 193” with “as required by this Act”.

(5)

97 New section 89A inserted (EPA to publish participant data on emissions and removals)

After section 89, insert:

89A EPA to publish participant data on emissions and removals

(1)

The EPA must publish, for each participant or consolidated group for whom there is an emissions return,—

(a)

the name of the participant, or names of the participants in the consolidated group; and

(b)

the period to which the return or returns relate; and

(c)

the data in paragraphs (d) to (f) in tonnes of carbon dioxide equivalent and—

(i)

broken down by participant if a return relates to more than 1 participant; and

(ii)

broken down by activity if a return relates to more than 1 activity, except that the emissions or removals of a participant in any forestry activity must be combined for all of their forestry activities; and

(d)

if available, the emissions set out in the participant’s or group’s return or returns; and

(e)

if available, the removals set out in the participant’s or group’s return or returns; and

(f)

if the data in paragraphs (d) and (e) is not available, the net emissions or removals set out in the participant’s or group’s return or returns.

(2)

The EPA—

(a)

must publish the information at least annually, as soon as practicable after the date on which emissions returns are due; and

(b)

may publish the information, in whole or in part, at any other time.

(3)

The EPA must publish the information in whatever manner and format that the EPA considers appropriate.

(4)

The EPA must, at least 10 working days before publishing the information, give notice on its Internet site of the date on which it will publish the information.

98 Section 90 amended (EPA may prescribe form of certain documents)

(1)

In section 90(1), replace “this Part and Part 5” with “the ETS participant provisions and Part 2”.

(2)

Replace section 90(1)(b) with:

(b)

different forms or formats for different classes of participant or person or for different activities or purposes; and

(3)

In section 90(1)(c), replace “this Part or Part 5” with “the ETS participant provisions or Part 2”.

99 New section 91A inserted (Correction of unique emissions factors)

After section 91, insert:

91A Correction of unique emissions factors

(1)

If the EPA is satisfied that the unique emissions factor approved for a participant under section 91 is incorrect for any reason, the EPA may amend the approval to correct the unique emissions factor.

(2)

The EPA must—

(a)

notify the applicant of the amended approval; and

(b)

publish a notice in the Gazette that specifies—

(i)

the name of the participant; and

(ii)

a description of the activity; and

(iii)

the details of the unique emissions factor that the EPA has, by amendment, approved the participant to use when calculating emissions or removals for the activity (the corrected unique emissions factor); and

(iv)

the date on which the corrected unique emissions factor has effect, which must be no earlier than the date on which the unique emissions factor became incorrect.

(3)

The corrected unique emissions factor has effect on and after the date specified by the notice in the Gazette, even if that date has passed.

(4)

Information contained in an emissions return, for that or any later date, that is based on the incorrect unique emissions factor may be treated as being incorrect for the purposes of section 120 (so that the EPA may amend the emissions return under that section to reflect the corrected unique emissions factor).

100 Section 93 amended (Appointment of enforcement officers)

In section 93(1), after “Part”, insert “(which relate to verification and inquiry about compliance with the ETS participant provisions)”.

101 Section 94 amended (Power to require information)

(1)

In section 94(1)(a), replace “this Part and Part 5” with “the ETS participant provisions”.

(2)

Replace section 94(1)(b) with:

(b)

ascertaining whether, or how, the EPA or the chief executive, as appropriate, should exercise any powers under the ETS participant provisions.

102 Section 95 amended (Power to inquire)

In section 95(1), replace “this Part or Part 5” with “the ETS participant provisions”.

103 Section 96 amended (Inquiry before District Court Judge)

In section 96(1), replace “this Part or Part 5” with “the ETS participant provisions”.

104 Section 99 amended (Obligation to maintain confidentiality)

(1)

In section 99(1)(a), (2)(a), and (4)(a), replace “this Part and Part 5” with “the ETS participant provisions”.

(2)

In section 99(2)(b)(vi), replace “any obligation under the Convention or the Protocol” with “international climate change obligations”.

(3)

Replace section 99(4)(c) with:

(c)

providing information to any person about whether—

(i)

any land has a certain forestry classification or is exempt land; or

(ii)

they consider any land to be land that could be given any particular forestry classification available under section 196(a).

105 Section 100 amended (Power of entry for investigation)

(1)

In section 100(1), replace “this Part or Part 5” with “the ETS participant provisions”.

(2)

In section 100(2)(d), replace “this Part and Part 5” with “the ETS participant provisions”.

106 Section 104 amended (Information obtained under section 100 or 101 only admissible in proceedings for alleged breach of obligations imposed under this Part and Part 5)

(1)

In the heading to section 104, replace this Part and Part 5 with ETS participant provisions.

(2)

In section 104, replace “this Part or Part 5” with “the ETS participant provisions”.

107 Section 107 amended (Applications for emissions rulings)

(1)

Replace section 107(1)(b) and (c) with:

(b)

whether the person—

(i)

is a participant in respect of an activity listed in Schedule 3 or is eligible to register as a participant in respect of an activity listed in Schedule 4; or

(ii)

would be either of those things if certain proposals were carried out or events happened:

(c)

the correct application of any provision contained in regulations made under section 161A, 161G, 163, 164, 167, 168, 186F, 194C, 196F, or 197A in respect of a particular matter specified in the person’s application:

(ca)

whether any of this Act’s requirements that relate to a decision that the EPA can make about forest land on land that the person has, or will have, an interest in are satisfied, or would be satisfied if certain proposals were carried out or events happened—for example, the requirements that must be satisfied—

(i)

for any forest land that is cleared to not be treated as deforested (for the purposes of this Act) under section 179A:

(ii)

for pre-1990 forest land to be eligible for a decision to be made under section 184(5)(a) (exemptions for deforestation of land with tree weeds):

(iii)

for the EPA to approve an application relating to forest land:

(2)

108 New section 107A inserted (Insufficient information provided for ruling on entire application)

After section 107, insert:

107A Insufficient information provided for ruling on entire application

(1)

If the EPA is satisfied that an application under section 107 does not include all information that is relevant to a proper consideration of the application, the EPA must give notice to the applicant—

(a)

requesting any further information from the applicant that the EPA considers necessary to assist in the consideration of the application; and

(b)

if the EPA already has information that is relevant to the application, describing the information and inviting the applicant to comment on or object to the information.

(2)

The EPA must—

(a)

provide a reasonable deadline for the applicant to reply to the notice; and

(b)

consider as part of the application—

(i)

any further information provided by the applicant; and

(ii)

the information already held by the EPA that is relevant to the application, and the applicant’s comments on or objections to that information.

(3)

If, after that, the EPA is satisfied that it has sufficient information to make a ruling on only part of the matter applied for (such as part of an activity or part of a geographical area), the EPA may—

(a)

give notice of that decision to the applicant; and

(b)

make a ruling under section 109 in respect of only that part of the matter.

109 Section 108 amended (Matters in relation to which EPA may decline to make emissions rulings)

(1)

In section 108(1)(b), replace “section 107(3)” with “section 107A(1)”.

(2)

In section 108(2)(g)(i), after “ruling”, insert “but subject to section 107A”.

110 Section 109 amended (Making of emissions rulings)

(1)

In section 109(1), replace “in respect of which a ruling is sought under section 107” with “applied for”.

(2)

In section 109(1)(b), replace “section 107(3)” with “section 107A”.

(3)

Replace section 109(3) and (4) with:

(3)

A ruling may be made subject to any conditions that the EPA considers appropriate, including any condition that a proposal is carried out or that something happens (see section 107(1)(b)(ii)).

Example

The EPA may rule that a person is eligible to register as a participant in an activity listed in Part 1 of Schedule 4 on the condition that the relevant land is planted in forest species and meets the definition of forest land.

(4)

Subsection (1) is subject to section 108 and the EPA’s discretion in section 107A(3)(b) to make a ruling on only part of a matter.

111 Section 116 amended (Effect of emissions rulings)

(1)

In section 116(1), replace “in respect of which a ruling is sought under section 107” with “that is ruled on”.

(2)

In section 116(2)(a), replace “in relation to which the ruling was sought” with “that is ruled on”.

(3)

After section 116(2), insert:

(2A)

However, an emissions ruling is personal to the applicant and does not apply to, and cannot be transferred to, anyone else (including where land to which a ruling relates is transferred).

112 Section 117 amended (EPA may publish certain aspects of emissions rulings)

(1)

In section 117(1), replace “this Part or Part 5” with “the ETS participant provisions”.

(2)

In section 117(1), after “ruling”, insert “in whatever manner and format that the EPA considers appropriate”.

113 Section 124 amended (Reimbursement of units by EPA)

Replace section 124(1) and (2) with:

(1)

If the EPA is required by this Act to arrange for the reimbursement of units to a person, the EPA must direct the Registrar to transfer the applicable number of New Zealand units or approved overseas units from the appropriate surrender account or Crown holding account to the person’s holding account.

(2)

However, subsection (1) does not apply to the extent that subsection (2A) requires units to be transferred elsewhere.

(2A)

The EPA must apply section 64A as follows:

(a)

the units the person is entitled to be reimbursed are the potential transfer units:

(b)

the person is the recipient:

(c)

the time when the requirement to reimburse arose is the relevant time.

114 Section 125 replaced (Repayment of units by persons in case of error)

Replace section 125 with:

125 Repayment of units by persons in case of error

(1)

The EPA may, if satisfied that, as a result of an error, units to which a person is not entitled under the ETS participant provisions have been transferred from a Crown holding account or other account held by the Crown to the person’s holding account, give a notice to the person requiring that person to repay that number of units.

(2)

The person must, within 30 days after the notice is given, repay that number of units by transferring units to the Crown holding account designated in the notice.

(3)

The repaid units must be of a type that may be transferred to a surrender account when they are repaid.

115 Section 127 amended (Time bar for amendment of emissions returns)

(1)

In section 127(1), replace “submitted under” with “required or permitted by”.

(2)

In section 127(1)(a), replace “section 189 or 193” with “those specified in paragraph (b)”.

(3)

Replace section 127(2) with:

(2)

However,—

(a)

the EPA may amend an emissions return or assessment at any time to give effect to the correction of a unique emissions factor under section 91A; and

(b)

if the EPA is satisfied that an emissions return was fraudulent, was wilfully misleading, or deliberately omitted mention of emissions or removals in respect of which an emissions return was required to be submitted, the EPA may amend the emissions return at any time, under section 120, so as to—

(i)

increase the number of units required to be surrendered by the participant:

(ii)

decrease the number of New Zealand units to which the participant is entitled in respect of removal activities.

(3)

Without limiting subsection (2)(b), that paragraph applies in respect of all emissions returns by a person for an activity if the EPA is satisfied that the person’s application to be registered was fraudulent or wilfully misleading.

116 Section 129 amended (Offences in relation to failure to comply with various provisions)

(1)

In section 129(1)(b)(ii), delete “under section 65, 118, 189, 191, or 193”.

(3)

In section 129(1)(b)(iii)(C), replace “by a” with “by the”.

117 Section 132 amended (Other offences)

(1)

In section 132(1)(d), delete “under section 65, 118, 189, 191, or 193”.

(3)

In section 132(1)(e)(iii), replace “by a” with “by the”.

(4)

In section 132(1)(f) and (g), replace “this Part or Part 5” with “the ETS participant provisions”.

118 Section 133 amended (Evasion or similar offences)

(1)

In section 133(1)(b), delete “under section 65, 118, 189, 191, or 193”.

(3)

In section 133(1)(c)(iii), replace “by a” with “by the”.

(4)

In section 133(1)(d), replace “this Part or Part 5” with “the ETS participant provisions”.

(5)

In section 133(1)(e), replace “this Part and Part 5” with “the ETS participant provisions”.

119 Section 143 amended (Evidence in proceedings)

In section 143(1), replace “this Part or Part 5” with “the ETS participant provisions” in each place.

120 Section 144 amended (Request for review of decisions)

(1)

Replace section 144(1) with:

(1)

A person affected by a decision of the EPA under a provision in the ETS participant provisions who is dissatisfied with the decision may request the EPA to review the decision.

(1A)

The request must be made by notice to the EPA within the following period, or any further period that the EPA allows:

(a)

within 20 working days after the person receives notice of the decision; or

(b)

for a decision of the EPA about whether to give an area of land a new or changed forestry classification, within 20 working days after that decision is published in accordance with regulations made under section 196F.

(2)

Replace section 144(3) with:

(3)

For the purposes of a review, the EPA 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 EPA already holds and that is relevant to the review, as long as the EPA—

(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.

(3)

After section 144(4), insert:

(4A)

Before revoking or varying the forestry classification of an area of land, the EPA must, in accordance with regulations made under section 196F, consult the persons (if any) that appear likely to be substantially affected by the revocation or variation.

121 Section 148 amended (Giving of notices to EPA)

(1)

Replace section 148(2) with:

(2)

If this section applies, the notice must be given in writing in 1 of the following ways to the EPA’s office:

(a)

by personal delivery during working hours:

(b)

by an electronic means of communication in accordance with Part 4 of the Contract and Commercial Law Act 2017:

(c)

by post to the post office box number for the office.

(2)

In section 148(3), replace “subsection (2)(b)(ii)(C)” with “subsection (2)(c)”.

122 Section 150 amended (Formation of consolidated group)

(1)

Replace section 150(1) and (2) with:

(1)

Any 2 or more members of a group may elect to form and be treated as a consolidated group, for the purposes of the ETS participant provisions, in respect of any activity or activities listed in Schedule 3 or 4 other than forestry activities.

(2)

A consolidated group may consist of any of the following:

(a)

1 or more participants:

(b)

1 or more eligible persons for an eligible activity:

(c)

1 other member that is not a participant or an eligible person, if that entity is to act as the nominated entity.

(2)

In section 150(4)(b), replace “this Part and Part 5” with “the ETS participant provisions”.

(3)

In section 150(4)(c)(i), replace “this Part or Part 5 in respect of emissions and removals resulting from” with “the ETS participant provisions in respect of emissions and removals resulting from, or allocations, penalties, or interest relating to,”.

(4)

In section 150(4)(c)(ii), after “activity”, insert “, or by an allocation relating to an eligible activity,”.

(5)

In section 150(6), replace “If 2 or more participants have elected under subsection (1) to form a consolidated group, those participants must be treated for the purposes of this Part and Part 5” with “Two or more entities who make an election under subsection (1) must be treated, for the purposes of the ETS participant provisions,”.

(6)

In section 150(6A), after “an activity”, insert “to which subsection (1) applies”.

(7)

After section 150(6A)(b), insert:

(c)

at the same time they all submit an application under section 86 in respect of that eligible activity.

(8)

In section 150(6B),—

(a)

after “participant”, insert “or an eligible person”; and

(b)

after “section 57 in respect of an activity,”, insert “or making an application under section 86 in respect of an eligible activity,”.

(9)

In section 150(7), after “participant”, insert “or an eligible person”.

123 Section 151 amended (Changes to consolidated groups)

(1)

Replace section 151(1) with:

(1)

If a consolidated group has been formed and still has at least 1 member, any other person referred to in section 150(2)(a) to (c) may elect to join and be treated as a member of the consolidated group by giving notice to the EPA in a form that the EPA approves.

(2)

In section 151(2)(a)(ii), delete “if the entity is a participant,”.

(3)

In section 151(2)(b)(i), replace “this Part or Part 5 in respect of emissions and removals resulting from” with “the ETS participant provisions in respect of emissions and removals resulting from, or allocations, penalties, or interest relating to,”.

(4)

In section 151(2)(b)(ii), delete “if the entity is a participant,”.

(5)

In section 151(2)(b)(ii), after “activities”, insert “, or by an allocation relating to an eligible activity,”.

(6)

In section 151(2)(c)(i), replace “this Part or Part 5 in respect of emissions and removals resulting from” with “the ETS participant provisions in respect of emissions and removals resulting from, or allocations relating to,”.

(7)

In section 151(2)(c)(ii), after “that entity”, insert “, or by an allocation relating to an eligible activity of that entity,”.

(8)

Replace section 151(4) and (5) with:

(4)

Subject to subsection (6), a participant or eligible person that elects under subsection (1) to join a consolidated group must be treated, for the purposes of the ETS participant provisions, as being a member of that consolidated group from 1 January of the year in which they gave the notice under subsection (1).

(5)

An entity other than a participant or eligible person that elects under subsection (1) to join a consolidated group must be treated for the purposes of this Part as being a member of that consolidated group from the date of receipt by the EPA of the notice under subsection (1), or from any later date that may be specified in the notice.

(9)

In section 151(6), replace “An entity may, if the entity elects to be treated as a member of a consolidated group on and after the date the entity is registered as a participant in respect of an activity,” with “A participant in respect of an activity, or an eligible person in respect of an eligible activity, may”.

(10)

After section 151(6)(b), insert:

(c)

when submitting an application under section 86 in respect of that eligible activity.

(11)

In section 151(7), after “participant”, insert “or an eligible person”.

(12)

After section 151(7)(b), insert:

(c)

submitting an application under section 86 in respect of that eligible activity.

124 Section 151A amended (Addition of activities to consolidated groups)

(1)

In section 151A(2)(b)(i), replace “this Part or Part 5 in respect of emissions and removals resulting from” with “the ETS participant provisions in respect of emissions and removals resulting from, or allocations, penalties, or interest relating to,”.

(2)

In section 151A(2)(b)(ii), after “activities”, insert “, or by an allocation relating to an eligible activity,”.

125 Section 152 amended (Nominated entities)

In section 152(1), replace “this Part and Part 5” with “the ETS participant provisions”.

126 Section 153 amended (Effect of being member of consolidated group)

Replace section 153(1) to (5) with:

(1)

The nominated entity of a consolidated group—

(a)

must have a holding account in the name of the consolidated group for the purposes of meeting the members’ obligations under the ETS participant provisions; and

(b)

must record in that holding account the names of all the members of the consolidated group; and

(c)

must submit a single annual emissions return for the consolidated group in respect of a year, which must—

(i)

meet the requirements of section 65(2) in respect of the activities listed in the notice under section 150(4)(a)(ii) or 151(2)(a)(ii) carried out by each member of the consolidated group:

(ii)

be signed by the nominated entity in accordance with section 65(2)(f) on behalf of the consolidated group; and

(d)

is responsible for applying for any allocation of units under section 86 for an eligible activity, in place of the eligible person who is a member of the consolidated group.

(2)

Each member of a consolidated group is jointly and severally liable to surrender or repay the amount of units assessed for the consolidated group or its members in any year.

(3)

Each member of a consolidated group is jointly entitled to be transferred, for removal activities or for allocations of New Zealand units, the amount of units assessed for the consolidated group or its members in any year.

(4)

The joint and several liability, or the joint entitlement,—

(a)

applies to a member only as it relates to a period when they were a member of the consolidated group; and

(b)

replaces the member’s sole liability or entitlement; and

(c)

must be met by transferring units from, or to, the consolidated group’s holding account.

(5)

Despite this section, in calculating an allocation or provisional allocation of New Zealand units (including a related adjustment or repayment) for an eligible activity, only the member’s liabilities and entitlements must be used.

(5A)

However, subsection (5) does not apply to any calculation of offset units under section 86BB, which must be done in accordance with this section.

(5B)

Each member of a consolidated group is jointly and severally liable to pay any penalty or interest imposed on the consolidated group in relation to a period when they were a member of the consolidated group.

127 Section 154 repealed (Emissions returns by consolidated group in respect of activities in Part 1 of Schedule 4)

Repeal section 154.

128 Section 155 amended (Ceasing to be member of consolidated group)

(1)

In section 155(1)(c) and (d), after “participant”, insert “or an eligible person”.

(2)

Replace section 155(2)(c) with:

(c)

if subsection (1)(c) applies, with effect from the date that,—

(i)

in the case of a participant, their name is removed from the register of participants under section 58 or 59; or

(ii)

in the case of an eligible person, they ceased to be an eligible person; and

(3)

In section 155(6)(a), after “participant”, insert “or an eligible person”.

129 Section 156 replaced (Effect of ceasing to be member of consolidated group)

Replace section 156 with:

156 Effect of ceasing to be member of consolidated group

If an entity ceases to be a member of a consolidated group, the entity—

(a)

continues to be jointly and severally liable with other members of the consolidated group for any obligations under the ETS participant provisions in respect of emissions and removals resulting from, or allocations, penalties, or interest relating to, the activities of the members of the consolidated group, and jointly entitled to any units transferred for the removal activities, or for allocations relating to the eligible activities, of the consolidated group, during the period in which the entity was a member of the consolidated group; but

(b)

is not liable for any obligations under the ETS participant provisions in respect of emissions and removals resulting from, or allocations, penalties, or interest relating to, the activities of other members of the group, or entitled to the benefit of any units transferred for the removal activities, or for allocations relating to the eligible activities, of other members of the group, for any period during which the entity is not a member of the consolidated group.

130 Section 156A amended (Removal of activities from consolidated groups)

(1)

In section 156A(4), replace “this Part or Part 5 in respect of emissions and removals” with “the ETS participant provisions in respect of emissions, removals, and allocations”.

(2)

In section 156A(4), after “removal activity”, insert “or an eligible activity”.

131 Section 157 amended (Unincorporated bodies)

In section 157(2)(c)(ii)(C), after “may be,”, insert “must”.

132 Section 159 amended (Recovery of costs)

In section 159(2)(b), replace “any other provision of this Act” with “this Act (other than this provision)”.

133 Section 160 amended (Review of operation of emissions trading scheme)

(1)

In section 160(1), delete “established by this Act”.

(2)

Replace section 160(4)(b) with:

(b)

make the report of the panel publicly available; and

134 Section 161 amended (Appointment and conduct of review panel)

(1)

Replace section 161(1)(c)(ii) with:

(ii)

international climate change obligations and any other relevant international agreement; and

(2)

In section 161(1)(c)(iii), delete “established under this Act”.

135 Section 161A amended (Regulations in relation to eligible industrial activities)

(1)

Replace section 161A(1)(d) with:

(d)

prescribing an allocation factor or factors for—

(i)

electricity:

(ii)

natural gas feedstock:

(2)

Replace section 161A(3) with:

(3)

The Minister may recommend the making of regulations under subsection (1)(a) that prescribe an activity as an eligible industrial activity if the Minister is satisfied that the activity is—

(a)

moderately emissions-intensive or highly emissions-intensive; and

(b)

trade-exposed.

(3)

In section 161A(4), delete “161B or”.

136 Section 161B repealed (Australian eligible industrial activities)

Repeal section 161B.

137 Section 161C amended (Other eligible industrial activities)

(1)

In the heading to section 161C, replace Other eligible with Eligible.

(2)

In section 161C(1) and (2), replace “section 161A(3)(a)” with “section 161A(3)”.

138 Section 161D amended (Power to require information for purposes of allocation to industry)

In section 161D(3)(a), replace “section 161A(3)(a)” with “section 161A(3)”.

139 Section 161E amended (Requirements in respect of notice given under section 161D)

(2)

After section 161E(3), insert:

(4)

However, subsection (3) does not apply if the purpose of the notice under section 161D is to provide the Minister with the information necessary to determine whether any matter should be considered by a review under section 160.

(5)

See section 3B for consultation requirements that apply to the giving of a notice specifying a description of an activity under section 161D(1)(a).

140 Section 161F repealed (Consultation on activities that may be prescribed as eligible industrial activities)

Repeal section 161F.

141 Section 161G amended (Regulations in relation to eligible agricultural activities)

Replace section 161G(3) to (6) with:

(3)

Before recommending the making of regulations under subsection (1)(a)(ii) prescribing the allocative baseline or baselines of an eligible agricultural activity, the Minister must—

(a)

have regard to the most recent New Zealand Greenhouse Gas Inventory; and

(b)

comply with the consultation requirements in sections 3A and 3B.

(4)

See section 3A for consultation requirements that apply to the making of other regulations under this section.

(5)

For each eligible agricultural activity, the Minister—

(a)

must recommend the making of regulations under this section before surrender obligations for participants in that activity start; and

(b)

must review those regulations at least once in every 5-year period; and

(c)

must not recommend the making of regulations that would result in there being no regulations in force under this section for the activity while surrender obligations for the activity exist.

(6)

In conducting a review under subsection (5)(b), the Minister must comply with subsections (3) and (4).

142 Section 162 amended (Regulations adding further activity to Part 2 of Schedule 4)

(1)

In the heading to section 162, replace Regulations with Order in Council.

(2)

Replace section 162(2) and (3) with:

(2)

See sections 3A and 3B for consultation requirements that apply to the making of an Order in Council under subsection (1).

143 Section 163 amended (Regulations relating to methodologies and verifiers)

(1)

In section 163(1)(ab), replace “an activity listed in Part 1 or 1A of Schedule 3 or Part 1 of Schedule 4” with “a forestry activity”.

(2)

In section 163(5), replace “making a recommendation in relation to a regulation” with “recommending the making of regulations”.

(3)

In section 163(5), replace “New Zealand’s international obligations” with “international climate change obligations”.

144 Section 166 replaced (Procedure for regulations relating to methodologies, verification, unique emissions factors, and offsetting)

Replace section 166 with:

166 Consultation and commencement for regulations about methodologies, verifiers, and unique emissions factors

(1)

This section applies to regulations made under—

(a)

section 163 (methodologies and verifiers):

(b)

section 164 (unique emissions factors).

(2)

See sections 3A and 3B for consultation requirements that apply to the making of the regulations.

(3)

The regulations come into force 3 months after the date of their notification in the Gazette, or on any later date specified in the regulations.

145 Section 167 amended (Regulations relating to fees and charges)

(1)

In section 167(1), replace “this Part or Part 5” with “the ETS participant provisions”.

(2)

Replace section 167(2)(b) with:

(b)

who is a participant, or who has applied to be a participant, in respect of a removal activity, to enable the recovery of all or part of the direct and indirect costs of the EPA in doing 1 or more of the following in relation to the activity:

(i)

publicising and informing people about the operation of the ETS participant provisions:

(ii)

administering the operation of the ETS participant provisions:

(iii)

enforcing and monitoring compliance with the ETS participant provisions:

(iv)

doing anything else authorised or required under the ETS participant provisions; or

(c)

who submits an input return under section 194A, to enable the recovery of all or part of the direct and indirect costs of the EPA in doing calculations and giving notice under section 194B.

(3)

Replace section 167(3)(b)(ii) with:

(ii)

the administration of the ETS participant provisions in relation to a removal activity; or

(iii)

input returns:

146 Section 168 amended (Other regulations)

(1)

In section 168(1)(k), (l), and (o), replace “this Part and Part 5” with “the ETS participant provisions”.

(2)

After section 168(1)(n), insert:

(na)

prescribing rules for the rounding of amounts of units calculated under, or referred to in, this Act; and

(nb)

prescribing the meaning (or things that are included within the meaning) of New Zealand’s best practice forest management for the purposes of section 179A; and

(3)

After section 168(2), insert:

(3)

See sections 3A and 3B for consultation requirements that apply to the making of regulations under subsection (1)(nb).

147 Section 169 amended (Incorporation by reference in regulations made under section 163, 164, 167, or 168)

(1)

In the heading to section 169, replace regulations made under section 163, 164, 167, or 168 with certain regulations.

(2)

In section 169(1), replace “section 163, 164, 167, or 168” with “a relevant empowering section”.

(3)

After section 169(3), insert:

(4)

In this section and sections 170 to 174, relevant empowering section means section 161A, 161G, 163, 164, 167, 168, 186F, 194C, 196F, or 197A.

148 Section 170 replaced (Effect of amendments to, or replacement of, material incorporated by reference in regulations)

Replace section 170 with:

170 Effect of amendments to, or replacement of, material incorporated by reference in regulations

(1)

Subsection (2) applies to an amendment to, or a replacement of, material if the material—

(a)

is incorporated by reference in regulations made under a relevant empowering section (the original regulations); and

(b)

is adopted, agreed on, made, or approved by an international government agency, international organisation, or international professional body.

(2)

The amendment or replacement of the material has legal effect as part of the regulations only if regulations made under the relevant empowering section after the original regulations were made state that the particular amendment or replacement has that effect.

(3)

Subsection (4) applies to an amendment to, or a replacement of, material if the material—

(a)

is incorporated by reference in regulations made under a relevant empowering section (the original regulations); and

(b)

is not material described by subsection (1)(b).

(4)

The amendment or replacement of the material has immediate legal effect as part of the original regulations (without the need for an amendment to the original regulations, or the making of other regulations, to state that effect).

149 Section 172 replaced (Effect of expiry of material incorporated by reference)

Replace section 172 with:

172 Effect of expiry of material incorporated by reference

(1)

This section applies to material incorporated by reference in regulations, made under a relevant empowering section, that expires, is revoked, or ceases to have effect without being amended or replaced.

(2)

The material ceases to have legal effect as part of the regulations only if regulations made under the relevant empowering section state that the material ceases to have legal effect.

150 Section 173 amended (Requirement to consult)

Replace section 173(1) with:

(1)

This section applies to regulations made under a relevant empowering section that—

(a)

incorporate material by reference; or

(b)

state, as required by section 170(2), that an amendment to, or a replacement of, material incorporated by reference in regulations has legal effect as part of the regulations.

151 Section 174 amended (Public access to material incorporated by reference)

(1)

Replace section 174(1)(d)(i) with:

(i)

that the material is incorporated in the regulations and—

(A)

the date on which the regulations were made; or

(B)

if the material has immediate legal effect under section 170(4), the date on which it had legal effect; and

(2)

In section 174(2)(a), replace “section 163, 164, 165, 167, or 168” with “a relevant empowering section”.

152 Section 175 amended (Application of Legislation Act 2012 to material incorporated by reference)

In section 175(1), replace “or replacement” with “or a replacement”.

153 Section 178A amended (Option to pay money instead of surrendering units to cover emissions)

(1)

In the heading to section 178A, replace units to cover emissions with , repaying, or reimbursing units.

(2)

Replace section 178A(1) with:

(1)

This section applies if—

(a)

either—

(i)

a person is required to surrender or repay units—

(A)

as a result of submitting an emissions return; or

(B)

under section 123(3) or (6) or 183A(2)(b); or

(ii)

the EPA is required by this Act to reimburse units to any person; and

(b)

the units that must be surrendered, repaid, or reimbursed are in respect of,—

(i)

for an activity on post-1989 forest land, emissions or removals that are attributed by section 178C(3) to a calendar year that ends before the start date for auctions; or

(ii)

for any other activity, emissions or removals that occurred in a calendar year that ends before the start date for auctions; or

(iii)

an activity that the person ceased to participate in, and for which the person has submitted an emissions return, before the start date for auctions.

(1A)

If subsection (1)(b)(i) applies, for the purposes of this section, the units in respect of the emissions or removals attributed to a calendar year must be rounded to the nearest whole number (where 0.5 is rounded up).

(3)

In section 178A(2)(a)(i), replace “section 65(4), 118(5), 183A(2)(b), 186H, 187, 189(8), 191, or 193, as applicable” with “the relevant provision”.

(4)

In section 178A(2)(a)(ii) and (b)(ii), replace “a sum of $25” with “the fixed price”.

(5)

After section 178A(4), insert:

(5)

In this section and sections 178B and 178C,—

fixed price has the meaning given by section 178C

start date for auctions means the date specified by regulations made under section 30GA(2)(a) as the date on which the sale of New Zealand units by auction commences.

154 Section 178B amended (Issuing New Zealand units to meet surrender obligations)

(1)

In section 178B(1), (1)(a), (2), (3), and (3)(a), replace “a sum of $25” with “the fixed price”.

(2)

In section 178B(3), replace “to reimburse a person units under section 123(4), 186H, or 189(7)(d)” with “by this Act to reimburse units to any person”.

(3)

In section 178B(5), replace “$25” with “the fixed price”.

(4)

In section 178B(6), replace “section 18CA(4)” with “section 18CA(2)”.

155 Section 178C replaced (Prohibition on ability to export New Zealand units)

Replace section 178C with:

178C Fixed price (for option to pay money instead of surrendering, repaying, or reimbursing units)

(1)

This section determines the fixed price of a unit for the purposes of sections 178A and 178B.

(2)

If the unit that must be surrendered, repaid, or reimbursed is in respect of emissions or removals that occurred in a calendar year that is—

(a)

2019 or earlier, the fixed price is $25; or

(b)

2020 or later, but that ends before the start date for auctions, the fixed price is $35.

(3)

For the purposes of section 178A, if an emissions return covers more than 1 calendar year of an activity on post-1989 forest land, emissions and removals are attributed to, and treated as having occurred in, each year in the proportion that the year bears to the emissions return period.

156 Part 5 divided into Parts 5 to 5D and new Part 5 divided into subparts

(1)

In Part 5, replace the Part 5 heading, the subpart 1 heading, and the cross-heading above section 179 with:

Part 5 Sector-specific provisions: forestry

Subpart 1—Deforestation

(2)

Replace the cross-heading above section 180 with:

Subpart 2—Pre-1990 forest land

(3)

Replace the cross-heading above section 186A with:

Subpart 3—Pre-1990 offsetting forest land

(4)

Replace the cross-heading above section 187 with:

Subpart 4—Post-1989 forest land

(5)

Replace the cross-heading above section 195 with:

Subpart 5—General

(6)

In Part 5, replace the subpart 2 heading with:

Part 5A Sector-specific provisions: liquid fossil fuels

(7)

In Part 5, replace the subpart 3 heading with:

Part 5B Sector-specific provisions: stationary energy

(8)

In Part 5, replace the subpart 4 heading with:

Part 5C Sector-specific provisions: agriculture

(9)

In Part 5, replace the subpart 5 heading with:

Part 5D Sector-specific provisions: transitional provisions

157 Section 179A amended (Forest land may not be treated as deforested in certain cases)

After section 179A(3), insert:

(4)

If regulations prescribe any meaning for New Zealand’s best practice forest management, then that term has or includes that meaning in this section.

158 Section 183 amended (Applications for exemption for land holdings of less than 50 hectares of pre-1990 forest land)

(1)

In section 183(1)(a), replace “allocation plan referred to in section 72” with “pre-1990 forest land allocation plan”.

(2)

Replace section 183(1)(b) with:

(b)

was the landowner of an area of pre-1990 forest land at the date (if any), between 1 January 2008 and the date of issue of the pre-1990 forest land allocation plan, on which the area was converted to land that is not forest land.

(3)

In section 183(2)(c), replace “an allocation plan under section 72” with “the pre-1990 forest land allocation plan”.

(4)

In section 183(7), after “this section”, insert “and section 183B”.

159 Section 183A amended (Certain applications not otherwise permitted by section 183)

(1)

In section 183A(1)(b) and (3), replace “an allocation plan under section 72” with “the pre-1990 forest land allocation plan”.

(2)

In section 183A(5)(b), replace “the allocation plan” with “the pre-1990 forest land allocation plan”.

160 New section 183B inserted (Applications for exemption for some Maori land or land with 10 or more owners)

After section 183A, insert:

183B Applications for exemption for some Maori land or land with 10 or more owners

(1)

This section applies to an area of pre-1990 forest land that—

(a)

is less than 50 hectares; and

(b)

on 1 September 2007,—

(i)

was all of the pre-1990 forest land held in a document that is equivalent to a record of title under the Land Transfer Act 2017 or, if there was no such document, in another instrument of title; and

(ii)

was Maori land or was owned by more than 10 persons; and

(c)

was an area of pre-1990 forest land on the following date (the qualifying date):

(i)

the date of issue of the pre-1990 forest land allocation plan; or

(ii)

the date (if any), between 1 January 2008 and the date of issue of the pre-1990 forest land allocation plan, on which the area was converted to land that is not forest land; and

(d)

after the qualifying date,—

(i)

became owned by the trustees of a trust; or

(ii)

in the case of Maori freehold land, had an agent appointed for it under Te Ture Whenua Maori Act 1993 with the power to apply under this section; and

(e)

has not been the subject of an allocation of units to a landowner under the pre-1990 forest land allocation plan.

(2)

The trustees or agent described in subsection (1)(d) may apply to the EPA for the area of pre-1990 forest land to be declared exempt land.

(3)

The application—

(a)

may be submitted to the EPA at any time; and

(b)

must be in the prescribed form and accompanied by the prescribed fee (if any); and

(c)

must contain details of the area of pre-1990 forest land to which the application relates; and

(d)

must be accompanied by evidence showing that the land is pre-1990 forest land; and

(e)

must be accompanied by a statutory declaration from the applicant stating that the area of pre-1990 forest land was, on 1 September 2007, all of the pre-1990 forest land held in a document that is equivalent to a record of title under the Land Transfer Act 2017 or, if there was no such document, in another instrument of title; and

(f)

must be signed by the applicant; and

(g)

must be accompanied by any other prescribed information.

(4)

If the EPA is satisfied that the applicant is 1 or more trustees or an agent described in subsection (1)(d), that the land is pre-1990 forest land, and that each of the criteria specified in subsection (1)(a) to (e) is met, the EPA must—

(a)

declare the land to be exempt land; and

(b)

notify the applicant that the land has been declared exempt land.

161 Section 184 amended (Exemptions for deforestation of land with tree weeds)

(1)

Replace section 184(1) to (4) with:

(1)

An application may be made under this section for pre-1990 forest land to be declared exempt land (in relation to deforestation) if a prescribed type of tree weed—

(a)

is growing on the land; or

(b)

was cleared from the land as part of the deforestation process on or after 1 January 2008.

(2)

The application may be made by—

(a)

the landowner of the pre-1990 forest land; or

(b)

a third party to whom section 180 applies.

(2)

In section 184(5), replace “every application received under subsection (4) against the criteria, and priorities in, and the number of whole tonnes of emissions that are to be covered by exemptions granted in respect of, the relevant notice given under subsection (1)” with “the application against the prescribed criteria and priorities”.

(3)

Replace section 184(5)(b) with:

(b)

must, if the EPA declares any land to be exempt land, notify the applicant of—

(i)

the declaration; and

(ii)

any requirements or conditions that the EPA has decided to impose on the person whose land is exempted.

(4)

Replace section 184(6)(b) with:

(b)

completed by the end of the mandatory emissions return period in which the exemption was granted.

162 Section 186F amended (Regulations relating to offsetting)

In section 186F, insert as subsections (2) and (3):

(2)

See sections 3A and 3B for consultation requirements that apply to the making of the regulations.

(3)

The regulations come into force 3 months after the date of their notification in the Gazette, or on any later date specified in the regulations.

163 Section 186H amended (Treatment of allocations in respect of pre-1990 forest land that is offset)

(1)

In section 186H(1)(b) and (5), replace “an allocation plan” with “the pre-1990 forest land allocation plan”.

(2)

Replace section 186H(6) with:

(6)

For the purposes of subsection (2), second tranche, in relation to an allocation, means the New Zealand units that are allocated to a person under the pre-1990 forest land allocation plan on or after 1 January 2013.

164 Section 187 amended (Conditions on registration as participant in respect of certain activities relating to post-1989 forest land)

(1)

In section 187(2), after “been deforested”, insert “8 or less years ago”.

(2)

Replace section 187(2)(b) with:

(b)

has surrendered, within 60 working days after the EPA gives the person a notice requiring the surrender, the number of units listed in the assessment under paragraph (a)(ii); and

(3)

In section 187(6), replace “the commencement of this section” with “1 January 2013”.

165 Section 188 amended (Registration as participant in respect of post-1989 forest land)

(1)

In section 188(6)(a), replace “under section 57(6)(b),— ” with “the person in accordance with section 57(6); or”.

(4)

In section 188(7)(a)(ii)(A), replace “section 58(3)(c)” with “section 58(3)(b)”.

(6)

In section 188(7A), replace “subsection (7)(b)(i) to (iii)” with “subsection (7)(b)(ii) and (iii)”.

(7)

After section 188(10), insert:

(11)

See also sections 188B and 188C (which require notice to the participant and notice to interested parties, if any).

166 New sections 188B and 188C inserted

After section 188A, insert:

188B Notice to forestry participant if their registration added or removed

The EPA must give written or electronic notice to a participant, or former participant, of the following matters as soon as practicable after the EPA carries them out under any of Parts 5 to 5D:

(a)

the participant’s registration or removal from registration in respect of an activity, and the date on which this took or takes effect:

(b)

the addition or removal of any area or land for which the participant is registered, and the date on which this took or takes effect.

188C Notice to interested party if forestry participant’s registration added or removed

(1)

A participant must notify the interested party (if any) of the following matters under this section, in writing or electronically, as soon as practicable after receiving the EPA’s notice about, or becoming aware of, the matter:

(a)

the participant’s registration, or removal from registration, in respect of an activity, and the date that this took or takes effect:

(b)

the addition or removal of any area or land for which the participant is registered, and the date that this took or takes effect.

(2)

The EPA must provide the participant with any address that it has recorded for the interested party.

(3)

In this section, interested party means—

(a)

the landowner, in relation to a participant who is registered for an activity relating to—

(i)

holding a registered forestry right or registered lease over land; or

(ii)

being a party to a Crown conservation contract over land; or

(b)

any person with a registered forestry right or registered lease in respect of the land, in relation to a participant who is registered for an activity relating to owning post-1989 forest land.

167 Section 189 amended (Emissions returns for post-1989 forest land activities)

(1)

In section 189(8)(d)(i), delete “within 20 working days of submitting the emissions return”.

(2)

In section 189(8)(d)(ii), delete “, within 60 working days of submitting the emissions return,”.

(3)

In section 189(9), repeal the definition of mandatory emissions return period.

168 Section 191 amended (Ceasing to be registered as participant in respect of post-1989 forest land)

In section 191(3)(b)(i)(A), delete “(as defined in section 189(9))”.

169 New section 191A inserted (If participant has never carried out activity in carbon accounting area)

After section 191, insert:

191A If participant has never carried out activity in carbon accounting area

(1)

This section applies if the EPA is satisfied that a person is not carrying out, and has never carried out, the activity in Part 1 of Schedule 4 in a carbon accounting area, or part of an accounting area, for which they are registered.

(2)

The EPA must amend the register kept under section 57, and the records of carbon accounting areas kept under section 188(2), to remove the person’s registration in respect of the carbon accounting area, or part carbon accounting area.

(3)

The person must surrender the unit balance that relates to the carbon accounting area (or part area).

(4)

At least 60 days before amending the register, the EPA must notify the person—

(a)

that the EPA proposes to remove the person’s registration in respect of the carbon accounting area, or part carbon accounting area; and

(b)

of the reason for the proposed removal; and

(c)

of the actions that the person may take to prevent the removal (for example, provide evidence that the person carries out the activity in the carbon accounting area).

(5)

The EPA may still take action under this section if it is unable to notify the person of its proposal to do so because it is not reasonably practicable to locate them or their address.

170 Section 192 amended (Effect of transmission of interest in post-1989 forest land)

After section 192(5), insert:

(5A)

However, if the transmitted interest is part of a deceased participant’s estate,—

(a)

for the transfer to the executor or administrator,—

(i)

subsections (3)(a), (4), and (5) do not apply (so that no notice or emissions return is required); but

(ii)

subsection (3)(b) still applies and the EPA must act under subsection (6); and

(b)

for the transfer from the executor or administrator to a successor,—

(i)

the transferee (not the transferor) must submit the emissions return required by section 193; and

(ii)

for the purposes of that emissions return, the affected carbon accounting areas are those that relate to the transfer to the executor or administrator; and

(c)

in every case, the executor or administrator of more than 1 deceased participant’s estate is treated under this Act as if they were a separate participant for each of those estates.

171 Section 193 amended (Emissions returns in relation to transmitted interests)

In section 193(2)(b)(i)(A), delete “(as specified in section 189(9))”.

172 New cross-heading above section 194 inserted

Before section 194, insert:

Information about status of forest land

173 New sections 194A to 194C and cross-headings inserted

Before section 195, insert:

Input returns may be submitted before actual emissions returns

194A Input returns may be submitted for certain emissions returns for forestry activities

(1)

This section applies before a person submits an emissions return (for a forestry activity) of a type specified in the regulations.

(2)

The person may first submit, for the activity and 1 or more of the areas or carbon accounting areas covered by the emissions return, an input return that contains the data or information required by the regulations.

(3)

The input return must be submitted by—

(a)

the deadline specified in the regulations; or

(b)

any extended deadline granted by the EPA under the regulations.

(4)

In this section, regulations means regulations made under section 194C.

194B EPA may do calculations based on input return

(1)

This section applies if the EPA receives an input return in accordance with section 194A.

(2)

As soon as practicable after receipt, the EPA must—

(a)

calculate for each area or carbon accounting area covered by the input return, as required for the relevant emissions return,—

(i)

the participant’s emissions and removals; and

(ii)

the participant’s liability to surrender units for their emissions or entitlement to receive New Zealand units for their removals; and

(b)

give a notice to the participant that includes—

(i)

the calculations and the calculated amounts; and

(ii)

the data, information, or other matters on which the calculations are based; and

(iii)

a statement that the participant may choose to include the calculations and the calculated amounts in the relevant emissions return; and

(iv)

a statement about the effect of subsection (3).

(3)

The EPA is not liable for anything that results from the calculations that it makes in good faith under this section, and the EPA’s calculations and notice do not affect any obligation of the participant under this Act (such as the obligation to submit an accurate emissions return).

194C Regulations for input returns

(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:

(a)

specifying the 1 or more types of emissions return for a forestry activity for which input returns may be submitted, which may be specified by reference to 1 or more of the following:

(i)

the type of forestry activity:

(ii)

any feature of the forest or land to which the activity relates:

(iii)

any other matter:

(b)

specifying the data or information that must be contained in any input return or the input return for each type of emissions return:

(c)

specifying the deadline for submitting the input return for each type of emissions return, which must be a reasonable period before the deadline for submitting the emissions return:

(d)

providing for how, and for how long, the EPA may extend a deadline for submitting the input return for any emissions return or for each type of emissions return:

(e)

authorising the EPA to issue guidelines or standards by notice in the Gazette in relation to the matters specified under paragraphs (b) to (d).

(2)

See sections 3A and 3B for consultation requirements that apply to the making of the regulations.

(3)

Any guidelines or standards issued by the EPA under regulations made under subsection (1)(e) are a disallowable instrument, but not a legislative instrument, for the purposes of the Legislation Act 2012 and must be presented to the House of Representatives under section 41 of that Act.

(4)

A person who has complied with guidelines or standards issued by the EPA under regulations made under subsection (1)(e) is, in the absence of proof to the contrary, presumed to have complied with the relevant requirements specified in regulations corresponding to those guidelines or standards.

Notification of status of forest land

174 Sections 196 and 197 and cross-heading replaced

Replace sections 196 and 197 and the cross-heading above section 196 with:

Forestry classifications of land

196 Meaning of forestry classification

In this Act, forestry classification means 1 or more classifications of an area of land that—

(a)

classifies the area by whether or how—

(i)

a definition or matter in the Act that relates to forestry applies to the area; or

(ii)

the area is eligible to have a definition or matter in the Act apply to it if certain requirements are satisfied; and

(b)

is given—

(i)

by the EPA under section 196A (initial classification), 196C (change of classification to correct error), 196D (change of classification to update for changes), or 144 (review of classification); or

(ii)

by the decision of the District Court or High Court under section 145 or 146.

Examples

If specified by regulations, an area of land might be classified as—

  • pre-1990 forest land:

  • post-1989 forest land:

  • land that is eligible to become post-1989 forest land (if it becomes forest land):

  • pre-1990 offsetting forest land:

  • land that has been deforested, or deforested on specified dates:

  • land that is eligible to be declared exempt land under section 184 (because of tree weeds):

  • land that was forest land on 31 December 1989:

  • exempt land:

  • pre-1990 forest land to which the pre-1990 forest land allocation plan applies:

  • something else.

196A EPA may give forestry classifications to areas of land

The EPA may give 1 or more forestry classifications to an area of land in accordance with regulations made under section 196F.

196B Effect of forestry classifications

(1)

The forestry classification of an area of land is conclusive evidence of how the relevant definition or matter in the Act applies to the area.

(2)

The EPA must apply this Act to the area in accordance with the forestry classification.

(3)

If a person’s application, notice, emissions return, or other document under this Act specifies the forestry classification of an area of land, the document—

(a)

need not include any information that is covered by the forestry classification; but

(b)

for a forestry classification that an area of land is eligible for something if certain requirements are satisfied, must include information about whether the requirements are satisfied.

(4)

The EPA, or any person carrying out its powers, duties, or functions,—

(a)

does not warrant that any forestry classification is correct and not based on, or affected by, something that is incorrect or that has materially changed; and

(b)

is not liable for anything that results from a forestry classification being incorrect or based on, or affected by, something that is incorrect or that has materially changed, as long as the forestry classification was given in good faith.

196C Change of forestry classification to correct error

(1)

The EPA may change the forestry classification of an area of land to correct any error that the EPA is satisfied is contained in the classification, including where the classification was based on incorrect information.

(2)

The EPA must make the change in accordance with regulations made under section 196F.

196D Change of forestry classification to update for changes

(1)

The EPA may change the forestry classification of an area of land if—

(a)

there is a material change in any of the information or facts on which the classification is based; or

(b)

there is a material change to this Act, or to any regulations made under this Act, that affects the classification.

(2)

The EPA must make the change in accordance with regulations made under section 196F.

196E Forestry classification with effect before date classification given

(1)

This section applies if a forestry classification has effect before the date on which the classification is given, whether—

(a)

by the EPA under section 196A, 196C, or 196D or on review under section 144; or

(b)

by the decision of a court on appeal under section 145 or 146.

(2)

The forestry classification must be ignored in respect of the period before the date of the decision—

(a)

to the extent that it would increase the number of units that a person is required to surrender, or decrease the number of New Zealand units that a person is entitled to receive, in respect of that period; and

(b)

in respect of any other matter specified by regulations made under section 196F.

(3)

In all other respects, the forestry classification must be applied to that period.

(4)

To avoid doubt, where the forestry classification is ignored under subsection (2), the earlier forestry classification (if any) applies instead.

196F Regulations for forestry classifications

(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:

(a)

specifying the forestry classifications that the EPA may give to areas of land:

(b)

prescribing 1 or more methods or processes by which the EPA may give a new or changed forestry classification to an area, and those methods or processes—

(i)

may or may not provide for a person to apply for a classification; and

(ii)

may prescribe the fees or charges payable by an applicant for a classification to enable the recovery of all or part of the direct and indirect costs of the EPA in—

(A)

receiving and processing the application; and

(B)

considering, granting, or declining the application; and

(iii)

must require the EPA to first consult the persons that the regulations specify are likely to be substantially affected by the classification, unless the only persons likely to be substantially affected have applied for, or agreed to, the classification:

(c)

providing for when a forestry classification comes into effect, which may, for example,—

(i)

subject to section 196E, be before the date of the decision if the classification is changed under section 196C or 196D, on review by the EPA under section 144, or on appeal to the court under section 145 or 146:

(ii)

differ for different forestry classifications or circumstances, such as whether a person is responsible for a material change described in section 196D(1)(a):

(d)

specifying matters for the purposes of section 196E(2)(b) (in respect of which a forestry classification is ignored for the period before the date of the decision):

(e)

providing for the publication of the following in 1 or more notices, instruments, maps, or tools, which may be electronic:

(i)

any decision to give a forestry classification to an area of land:

(ii)

the current forestry classifications of all areas of land, and any related matters.

(2)

Examples of the costs that may be recovered under regulations made under subsection (1)(b)(ii) include (but are not limited to)—

(a)

the costs of providing, operating, and maintaining systems, databases, and other processes in connection with the application:

(b)

the costs of services provided by third parties.

(3)

Section 167(4) also applies to regulations made under subsection (1)(b)(ii).

(4)

See sections 3A and 3B for consultation requirements that apply to the making of regulations under this section.

(5)

Regulations made under this section come into force 3 months after the date of their notification in the Gazette, or on any later date specified in the regulations.

Grant-funded forests

197 Entitlement to units for removals from grant-funded forests

A participant in an activity of standard forestry or permanent forestry in a carbon accounting area is not entitled to receive New Zealand units for removals that—

(a)

are attributable to forest species in relation to which the participant has received a grant from the Crown under a grant scheme relating to forestry that is prescribed in regulations made under section 197A (a grant-funded forest); and

(b)

occur during the stand-down period for that forest prescribed in regulations made under section 197A.

197A Regulations for grant-funded forests

(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:

(a)

prescribing Crown grant schemes relating to forestry:

(b)

prescribing stand-down periods for grant-funded forests:

(c)

prescribing methodologies for attributing removals to grant-funded forests:

(d)

providing for any other matters contemplated by section 197, necessary for its administration, or necessary for giving it full effect.

(2)

Regulations made under this section may make different provision for different cases on any differential basis, including—

(a)

for different grant schemes:

(b)

for different periods of time:

(c)

for different forest species:

(d)

for different parts of New Zealand.

(3)

Regulations made under this section may require the use of a computer programme available via the Internet site of the EPA.

(4)

Regulations made under subsection (1)(c) may relate to emissions or removals that—

(a)

stem directly from the activity; or

(b)

are associated with a product or other thing that is the subject of the activity.

175 Section 198 amended (Registration as participant by purchasers of obligation fuel)

Replace section 198(2) and (3) with:

(2)

If the EPA registers a person as a participant under section 57 in respect of an activity listed in Part 3 of Schedule 4, the registration takes effect 12 months after the date of the notice issued under section 57(6).

(3)

If the EPA has received an application under section 58 for removal of a person’s name from the register as a participant in respect of an activity listed in Part 3 of Schedule 4, the EPA must remove, under section 58(4), the applicant’s name from the register on the date that is 48 months after the notice issued under section 58(3)(b).

(4)

The participant who is registered, or removed from registration, under this section must give notice of that matter, and the date that it took or takes effect, to every person who is registered under section 56 in respect of an activity in Part 2 of Schedule 3.

(5)

The notice must be given in writing or electronically as soon as practicable after the participant receives the EPA’s notice about, or becomes aware of, the matter.

(6)

The EPA must provide the participant with any address that it has recorded for each person who must be notified.

176 Section 202 amended (Activities added to Part 2 of Schedule 3)

(1)

In section 202(2), replace “that an Order in Council be made” with “recommend the making of an Order in Council”.

(2)

In section 202(2)(b)(ii), replace “New Zealand’s international obligations” with “international climate change obligations”.

177 Section 209 amended (Registration as participant by purchasers of coal or natural gas)

Replace section 209(2) to (4) with:

(2)

If the EPA registers a person as a participant under section 57 in respect of an activity listed in Part 4 of Schedule 4, the registration takes effect 12 months from the date of the notice issued under section 57(6).

(3)

If the EPA has received an application under section 58 for removal of a person’s name from the register as a participant in respect of an activity listed in Part 4 of Schedule 4, the EPA must remove, under section 58(4), the applicant’s name from the register on the date that is 48 months after the date of the notice issued under section 58(3)(b).

(4)

The participant who is registered, or removed from registration, under this section in respect of an activity must give notice of that matter, and the date that it took or takes effect, to every person who—

(a)

mines—

(i)

coal, if the activity is purchasing coal; or

(ii)

natural gas, if the activity is purchasing natural gas; and

(b)

is registered under section 56.

(5)

The notice must be given in writing or electronically as soon as practicable after the participant receives the EPA’s notice about, or becomes aware of, the matter.

(6)

The EPA must provide the participant with any address that it has recorded for each person who must be notified.

178 Section 213 amended (Participant in respect of subpart 4 of Part 5 of Schedule 3)

In section 213(1)(b)(i) and (ii), replace “section 2A(9)” with “section 2A(5D)”.

179 New sections 215 and 216 inserted

After section 214, insert:

215 Ministers to report on alternative pricing system for farm-level agriculture emissions

(1)

The Minister and the Minister of Agriculture must prepare a report that outlines a system to put a price on emissions from agricultural activities (including, but not limited to, the activities listed in Part 5 of Schedule 3) as an alternative to the emissions trading scheme currently provided for in this Act.

(2)

The report must be prepared and made publicly available by 31 December 2022.

(3)

The report must discuss the following matters in relation to the emissions trading scheme and the alternative system outlined under subsection (1):

(a)

how emissions from those activities would be priced and accounted for:

(b)

whether other activities or participants would be included in the system:

(c)

what methodologies would be used for calculating emissions and removals:

(d)

what assistance, if any, would be given to participants:

(e)

how emissions of methane would be treated relative to other greenhouse gases, including whether, how, and what types of removals would be recognised:

(f)

what information participants would need to provide and how that information would be used, shared, or made publicly available:

(g)

how participants and relevant industry groups would be engaged with in designing, implementing, and operating the system:

(h)

who would be responsible for administering the system:

(i)

what amendments would need to be made to legislation to enable the system to work.

(4)

Before preparing the report, the Ministers must—

(a)

request a report from the Climate Change Commission under section 5K about what assistance, if any, should be given to participants; and

(b)

consider that advice.

(5)

In this section, Minister of Agriculture means the Minister of the Crown who, under the authority of a warrant or with the authority of the Prime Minister, is responsible for the administration of the Commodity Levies Act 1990.

216 Regulations for voluntary reporting or surrender for animals–farmer or fertiliser–farmer activity

(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:

(a)

providing for a process by which a person carrying out an activity described by the fertiliser–farmer subpart or animals–farmer subpart (of Part 5 of Schedule 3) may choose to be treated as a participant in the activity described:

(b)

providing that the person may choose to be treated in that way in respect of 1 or both of—

(i)

obligations to report under this Act on the emissions from the activity:

(ii)

obligations to surrender units under this Act for the emissions from the activity:

(c)

providing for the following participants in corresponding processor activities to be notified:

(i)

a participant in a fertiliser–processor activity that corresponds to a fertiliser–farmer activity for which a participant has become subject to obligations to surrender units under this Act:

(ii)

a participant in an animals–processor activity that corresponds to an animals–farmer activity for which a participant has become subject to obligations to surrender units under this Act:

(d)

if regulations are made under paragraph (b)(ii), providing for a process by which a participant in a corresponding processor activity—

(i)

ceases to be subject to obligations to surrender units under this Act in respect of that activity, or becomes subject to such obligations as varied to ensure that only 1 person is liable to surrender units in respect of the corresponding processor activities or the activities to which they correspond; and

(ii)

ceases to be entitled to allocations of units in respect of the activities for which they are no longer liable to surrender units.

(2)

Before recommending the making of the regulations, the Minister must consult the Minister of Agriculture.

(3)

See section 3B for consultation requirements that apply to the making of the regulations.

180 Section 217 amended (Transitional provision for penalties)

(1)

Replace section 217(1) with:

(1)

This section applies in respect of the first year in which a participant is required to surrender units for emissions in respect of an activity listed in subpart 2 or 4 of Part 5 of Schedule 3.

(1A)

Subsection (2) applies—

(a)

to the participant if they submit an annual emissions return that relates to that first year; and

(b)

in respect of the units that the participant is required to surrender in respect of the activity.

181 Section 218 repealed (Transitional provision for voluntary reporting)

Repeal section 218.

182 Sections 219 to 222 replaced

Replace sections 219 to 222 with:

219 Transitional provision for surrender obligations of certain participants

(1)

This section applies to a person who carries out the following in the specified period (the excluded period):

(a)

a fertiliser–processor activity in the period starting on 1 January 2011 and ending on—

(i)

31 December 2024, if by that date no earlier end date has been appointed for that activity; or

(ii)

an earlier end date appointed for that activity by an Order in Council made under subsection (3)(a); or

(b)

a fertiliser–farmer activity in the first year in which the fertiliser–farmer subpart applies to persons, or the class of persons, carrying out that activity (starting on a date appointed by an Order in Council made under section 2A(5B)); or

(c)

an animals–processor activity in the period starting on 1 January 2011 and ending on—

(i)

31 December 2024, if by that date no earlier end date has been appointed for that activity; or

(ii)

an earlier end date appointed for that activity by an Order in Council made under subsection (3)(b); or

(d)

an animals–farmer activity in the first year in which the animals–farmer subpart applies to persons, or the class of persons, carrying out that activity (starting on 1 January 2024 or a later date appointed by an Order in Council made under section 2A(5D)).

(2)

Even if the person’s emissions return reports emissions for the excluded period, the person is not liable under this Act to surrender units for those emissions.

(3)

The Governor-General may, by Order in Council made on the recommendation of the Minister, appoint 1 or both of the following (an earlier end date):

(a)

a date for the purpose of subsection (1)(a)(ii):

(b)

a date for the purpose of subsection (1)(c)(ii).

(4)

Before recommending the making of an order appointing an earlier end date, the Minister must—

(a)

consult with the Minister of Agriculture (as defined in section 215); and

(b)

consider the report provided by the Climate Change Commission under section 220; and

(c)

be satisfied that progress of the kind referred to in section 220(b) has been insufficient.

(5)

In recommending the making of an order appointing an earlier end date, the Minister must not recommend a date that is before 1 July 2022.

220 Commission to report on progress towards meeting farm-level obligations

The Commission must, not later than 30 June 2022, provide written advice to the Minister on—

(a)

the progress that has been made towards meeting the primary sector climate change commitments set out in Schedule 5; and

(b)

the progress that has been made towards participants in an activity listed in subpart 4 of Part 5 of Schedule 3 being ready to start complying with reporting and surrender obligations under this Act in respect of that activity; and

(c)

any barriers to those participants being ready to start complying with those obligations; and

(d)

what further steps (if any) are required by the primary sector or the Government for those participants to be ready to start complying with those obligations.

183 Section 222H amended (Transitional provision for unincorporated bodies)
184 Section 233 amended (Rate of synthetic greenhouse gas levy)

(1)

In section 233(1), replace the definition of variable B with:

B

is the price of carbon specified under subsection (4)(b) or, if section 236(2) applies, set by that provision

(2)

In section 233(3), replace “item A” with “variable A”.

(3)

In section 233(4), replace “item B” with “variable B”.

(4)

Replace section 233(5) with:

(5)

Regulations made under subsection (4)(a)—

(a)

must be made in accordance with the consultation requirements in section 3B; and

(b)

come into force 3 months after the date of their notification in the Gazette, or on any later date specified in the regulations.

(5)

In section 233(6), replace “making a recommendation under subsection (4)” with “recommending the making of the regulations”.

185 Section 234 repealed (Transitional provision for synthetic greenhouse gas levy)

Repeal section 234.

186 Section 236 replaced (Maximum price of carbon for purpose of levy calculation)

Replace section 236 with:

236 Maximum price of carbon for purpose of levy calculation

(1)

This section applies to the calculation of variable B of the formula set out in section 233(1).

(2)

If the methodology prescribed under section 233(4)(a) would result in a price of carbon that is higher than the following price (the maximum price) for the levy year specified, the price of carbon is set at the maximum price for that levy year:

(a)

$25, for a levy year that is 2020 or earlier; or

(b)

$35, for a levy year that is 2021 or later, but that starts before the start date for auctions.

(3)

In this section, start date for auctions means the date specified by regulations made under section 30GA(2)(a) as the date on which the sale of New Zealand units by auction commences.

187 Section 243 amended (Circumstances where levy may be refunded)

In section 243(1)(b), replace “greenhouse gas emissions” with “emissions”.

188 Section 244 amended (Exemptions from payment of synthetic greenhouse gas levy)

Replace section 244(6) with:

(6)

See sections 3A and 3B for consultation requirements that apply to the making or revocation of an order under this section.

189 Section 245 amended (Regulations specifying levy rates)

Replace section 245(4) with:

(4)

Regulations made under subsection (1) come into force 3 months after the date of their notification in the Gazette, or on any later date specified in the regulations.

190 Section 246 amended (Regulations relating to synthetic greenhouse gas levy)

Replace section 246(2) and (3) with:

(2)

Before recommending the making of regulations under subsection (1)(a), the Minister must have regard to international climate change obligations relating to synthetic greenhouse gases.

(3)

See sections 3A and 3B for consultation requirements that apply to the making of regulations under subsection (1)(a) to (e).

(4)

Regulations made under subsection (1)(a) to (e) come into force 3 months after the date of their notification in the Gazette, or on any later date specified in the regulations.

191 Section 247 repealed (Process for making orders and regulations)

Repeal section 247.

192 Section 249 amended (Application of section 88 (Directions to EPA))

In section 249, replace “Part 5” with “the ETS participant provisions”.

193 Section 252 amended (Enforcement officers)

In section 252, replace “under Part 4 in relation to this Part” with “under this Part (which relates to verification and inquiry about compliance with this Part)”.

194 Section 257 amended (Power of entry for investigation, warrants, etc)

In section 257, replace “Part 5” with “the ETS participant provisions”.

195 Section 258 amended (Regulations relating to verifiers)

Replace section 258(3) with:

(3)

Before recommending the making of regulations under subsection (1)(a), the Minister must have regard to international climate change obligations in respect of the collection of data and information relating to specified synthetic greenhouse gases.

(4)

See sections 3A and 3B for consultation requirements that apply to the making of regulations under this section.

196 Section 269 amended (Review of operation and effectiveness of levy)

Replace section 269(4)(b) with:

(b)

make the report of the panel publicly available; and

197 Section 270 amended (Appointment and conduct of independent panel)

Replace section 270(1)(c)(ii) with:

(ii)

international climate change obligations and any other relevant international agreement; and

198 Schedule 1AA amended

In Schedule 1AA, after clause 3, insert:

Part 2 Provisions relating to Climate Change Response (Emissions Trading Reform) Amendment Act 2020

4 Interpretation

In this Part,—

amendment Act means the Climate Change Response (Emissions Trading Reform) Amendment Act 2020

third mandatory emissions return period means the 5-year period starting on 1 January 2018 and ending on 31 December 2022.

Subpart 1—Provisions that commence on day after Royal assent

5 Satisfying requirements for making regulations

(1)

This clause applies to any requirement for the making of any regulations under this Act as amended by the amendment Act.

(2)

Anything done before the commencement of this clause satisfies the requirement as long as it would have satisfied the requirement if it had been done after the commencement.

6 New regulations may commence on or after commencement of clause

Any regulations made under this Act before the commencement of this clause may come into force on, or at any time after, that commencement, despite anything in this Act that prevents them from coming into force within a certain period after the date of their notification in the Gazette.

7 Making first regulations about limits and price controls for units

(1)

If regulations are to be made under section 30GB before there is an emissions budget, section 30GC(2)(a) applies as if it instead referred to any provisional budget for the emission of greenhouse gases that is set by the Crown.

(2)

When an emissions budget is first set,—

(a)

the Minister must recommend the making of regulations under section 30GB to prescribe new limits or price control settings as required to comply with section 30GC(2); and

(b)

the Minister may recommend prescribing a new limit or price control settings for 1 or both of the 2 calendar years after the year in which the amendment is made, despite section 30GB(5).

8 Existing accounts continue

If any account established in the Registry (under section 7(1)(a), for example) existed immediately before the commencement of this clause, it continues to exist after the commencement.

9 Information accessible by search of unit register

If section 27 applies to information immediately before its amendment by the amendment Act, it continues to apply in accordance with that section as if it were not amended.

10 Information to be published by EPA

(1)

For a reporting year beginning before 1 January 2023, the EPA is not required to publish the information required under section 89(1)(e) in respect of an activity or the information required under section 89(1)(i) if the EPA is satisfied that publishing the information would result in the disclosure of a participant’s individual emissions or an eligible person’s own allocation, unless—

(a)

the participant or eligible person to whom the information relates has consented to the publication of the information; or

(b)

the information is already in the public domain.

(2)

Section 89A does not apply in respect of an emissions return for emissions or removals before 1 January 2020, unless—

(a)

the return also relates to a period after 1 January 2020; and

(b)

it is possible for emissions or removals occurring before 1 January 2020 to be excluded from the published information.

(3)

Section 89A—

(a)

applies in respect of emissions returns submitted under section 189, 191, or 193 for emissions or removals on or after 1 January 2020; but

(b)

does not apply in respect of any other emissions returns in relation to post-1989 forest land during a mandatory emissions returns period commencing before 1 January 2023.

11 Members of existing consolidated groups jointly and severally liable

(1)

The joint and several liability to which each member of a consolidated group has agreed, immediately before the commencement of this clause, is treated as if it were joint and several liability for any obligations under the ETS participant provisions in respect of emissions and removals resulting from, or allocations, penalties, or interest relating to, the relevant activities.

(2)

The transfer of units to the consolidated group’s holding account (on behalf of the group) to which each member of a consolidated group has agreed, immediately before the commencement of this clause, is treated as if it included the transfer of any units to which a member becomes entitled by an allocation relating to a relevant eligible activity.

12 Consolidated group for activity relating to forestry

(1)

In this clause, an existing forestry consolidated group means a consolidated group that—

(a)

was formed in respect of an activity or activities listed in Part 1 or 1A of Schedule 3 or Part 1 of Schedule 4; and

(b)

exists immediately before the commencement of this clause.

(2)

Sections 150 and 151A do not apply to an existing forestry consolidated group (so that no members or activities may be added to the group).

(3)

The nominated entity of an existing forestry consolidated group—

(a)

may submit a single emissions return under section 189(3) in respect of 1 or more of the activities listed in Part 1 of Schedule 4 carried out by a member of the group in a year; and

(b)

must submit any emissions return required under a provision of Part 5 on behalf of any member of the group when the member is required to do so; and

(c)

must sign any emissions return submitted by the nominated entity in accordance with section 65(2)(f) on behalf of the group.

(4)

In relation to an existing forestry consolidated group, section 153(2) to (4) applies to the liability to surrender units or entitlement to be transferred units in relation to an emissions return referred to in subclause (3) as if the references in that section to a year were references to the period covered by the emissions return.

(5)

To avoid doubt, only the nominated entity for an existing forestry consolidated group may submit an emissions return for the group.

13 Fixed price (for option to pay money instead of surrendering or repaying)

Section 178A does not apply if the person’s emissions return described by section 178A(1)(a)(i)(A)—

(a)

is in respect of an activity listed in Part 1 of Schedule 4; and

(b)

does not impose a net liability to surrender or repay units for all of the carbon accounting areas covered by the return (for example, under section 189(8)).

199 New Schedule 2A inserted

After Schedule 2, insert the Schedule 2A set out in Schedule 1 of this Act.

200 Schedule 3 amended

(1)

In Schedule 3, Part 1, replace “the 5-year period commencing on 1 January 2008, or in any subsequent 5-year period after that” with “any mandatory emissions return period”.

(2)

In Schedule 3, Part 2, delete , subject to sections 218 and 219,.

(3)

In Schedule 3, Part 3, subpart 1, replace the item “Mining coal where the volume of coal mined exceeds 2 000 tonnes in a year” with:

Satisfying 1 or both of the following in respect of a year (mining coal):

(a)

mining more than 2,000 tonnes of coal in the year (direct coal mining):

(b)

owning at least 2,000 tonnes of coal, from the person’s direct coal mining, at the start of the year, and where the year is immediately after (coal stockpiling)—

(i)

a year of direct coal mining; or

(ii)

1 or more consecutive years of owning at least 2,000 tonnes of coal (from the person’s direct coal mining) at the start of the year, after an initial year of direct coal mining.

(4)

In Schedule 3, Part 3, subpart 1, after the final item, insert:

Example

A person mines 2,500 tonnes of coal in 2022, which is “direct coal mining” and therefore “mining coal” in 2022. They stop direct coal mining, but still own (from their mining) 2,250 tonnes of coal at the start of 2023 and 2,000 tonnes at the start of 2024, which is “coal stockpiling” and therefore “mining coal” in 2023 and 2024 (under paragraph (b)(i) and (ii) of that term, respectively).

(5)

In Schedule 3, subpart 2 of Part 4, delete , subject to sections 218 and 219,.

(6)

In Schedule 3, subpart 1 of Part 5, replace (applies, subject to sections 218 and 219, on and after 1 January 2011 unless subpart 2 brought into force) with (applies on and after 1 January 2011, but is subject to section 219).

(7)

In Schedule 3, subpart 2 of Part 5, replace (applies, subject to sections 218 and 219, from 1 January 2011, if determined by Order in Council) with (applies on and after a date appointed by Order in Council, but is subject to section 219).

(8)

In Schedule 3, subpart 3 of Part 5, replace (applies, subject to sections 218 and 219, on and after 1 January 2011 unless subpart 4 brought into force) with (applies on and after 1 January 2011, but is subject to section 219).

(9)

In Schedule 3, subpart 4 of Part 5, replace (applies, subject to sections 218 and 219, from 1 January 2011, if determined by Order in Council) with (applies on and after 1 January 2024 or a later date appointed by Order in Council, but is subject to section 219).

(10)

In Schedule 3, Part 6, delete , subject to sections 218 and 219,.

201 Schedule 4 amended

(1)

In Schedule 4, subpart 1 of Part 2, paragraph (c)(ii), replace “New Zealand’s annual inventory report under the Convention or Protocol or any emissions report from New Zealand under a successor international agreement” with “any emissions report provided by New Zealand under its international climate change obligations”.

(2)

In Schedule 4, subpart 2 of Part 2, paragraph (b), replace “New Zealand’s annual inventory report under the Convention or Protocol or any emissions report from New Zealand under a successor international agreement” with “any emissions report provided by New Zealand under its international climate change obligations”.

(3)

In Schedule 4, subpart 3 of Part 2, delete , subject to sections 218, 219, and 220,.

202 New Schedule 5 inserted

After Schedule 4, insert the Schedule 5 set out in Schedule 2 of this Act.

Subpart 2—Amendments that commence on 30 November 2020

203 Section 30G amended (Regulations relating to Part 2)

Replace section 30G(3) with:

(3)

Any regulation made under subsection (1)(b)(i) or (c) applies to only the following units:

(a)

all units that are not held in an account in the Registry at the time that the regulation comes into force; and

(b)

approved overseas units that are issued before 1 January 2021 (the start of the third commitment period).

204 Section 183A amended (Certain applications not otherwise permitted by section 183)

In section 183A(2)(b), replace “New Zealand units” with “units”.

205 Section 186H amended (Treatment of allocations in respect of pre-1990 forest land that is offset)

(1)

In section 186H(2)(b), replace “New Zealand units equivalent to the portion of New Zealand” with “units equivalent to the portion of”.

(2)

In section 186H(3)(a), (4), and (6), delete “New Zealand”.

206 Section 189 amended (Emissions returns for post-1989 forest land activities)

In section 189(8)(b), delete “New Zealand”.

207 Section 191 amended (Ceasing to be registered as participant in respect of post-1989 forest land)
208 Schedule 1AA amended

In Schedule 1AA, after subpart 1, insert:

Subpart 2—Provisions that commence on 30 November 2020

14 Cancellation of historic approved overseas units

(1)

This clause applies to approved overseas units that were issued in the first commitment period starting on 1 January 2008 and ending on 31 December 2012, other than those that are held by the Crown in a Crown holding account or an account established under section 7.

(2)

If any person holds any of the approved overseas units, the Registrar must transfer the units to a cancellation account.

(3)

The EPA must direct the Registrar to transfer a New Zealand unit from a Crown holding account to a person’s holding account for each of that person’s approved overseas units—

(a)

that is a New Zealand assigned amount unit (as defined by regulation 3 of the Climate Change (Unit Register) Regulations 2008); and

(b)

that the Registrar transfers to a cancellation account under this clause.

(4)

No compensation is payable for any other units that the Registrar transfers to a cancellation account under this clause.

Subpart 3—Amendments that commence on 1 January 2021

209 Section 3A amended (Treaty of Waitangi (Te Tiriti o Waitangi))

After section 3A(b)(vi), insert:

(via)

section 30W(1)(a) (price of carbon):

210 Section 3B amended (Consultation about certain regulations, orders, and notices)

(1)

After section 3B(1)(e), insert:

(ea)

section 30W(1)(a) (price of carbon):

(2)

Repeal section 3B(1)(s).

211 Section 4 amended (Interpretation)

In section 4(1), replace the definition of deforest with:

deforest, in relation to forest land,—

(a)

means to convert forest land to land that is not forest land (see section 181, for example); and

(b)

includes deforestation after forest land is cleared, where section 179 applies

212 New subpart 4 of Part 2 inserted

After section 30V, insert:

Subpart 4—Regulations setting price of carbon

30W Regulations setting price of carbon

(1)

For the purpose of sections 134 to 134D and any other provisions that refer to regulations made under this section, the Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations—

(a)

prescribing the methodology for specifying the price of carbon; and

(b)

specifying the price of carbon by applying the methodology.

(2)

Before recommending the making of regulations, the Minister must take into account—

(a)

the price of the units used to calculate revenue from the emissions trading scheme in the Crown annual financial statements in the preceding 12 months; and

(b)

the price of New Zealand units sold by auction in the preceding 12 months; and

(c)

any changes to the operation of the emissions trading scheme that have affected the price of the units surrendered under that scheme, or that may do so before the end of the next levy year.

(3)

See sections 3A and 3B for consultation requirements that apply to the making of regulations under subsection (1)(a).

(4)

Regulations made under subsection (1)(a) come into force 3 months after the date of their notification in the Gazette, or on any later date specified in the regulations.

213 Section 89 amended (EPA to publish certain information)

(2)

After section 89(1), insert:

(1A)

The EPA must, for each reporting year, publish information about—

(a)

each qualifying penalty imposed in that reporting year; and

(b)

each qualifying penalty imposed in a previous reporting year that has any amount still owing at any time in that reporting year.

(1B)

The information required for each of those penalties is—

(a)

the name of the person on whom the penalty was imposed; and

(b)

the section under which the penalty was imposed; and

(c)

the amount of the penalty; and

(d)

the date on which the last payment for the penalty was due and, if the penalty has been paid in full, the date on which it was paid in full; and

(e)

in the case of a penalty imposed under section 134, the provision under which the person was liable to surrender or repay units; and

(f)

in the case of a penalty imposed under sections 134A to 134D, whether the penalty was imposed for behaviour that was grossly careless or behaviour that was knowing.

(1C)

In subsection (1A), qualifying penalty means—

(a)

a penalty imposed under section 134; or

(b)

a penalty imposed under sections 134A to 134D, if the EPA is satisfied that the penalty was imposed for behaviour that was grossly careless or knowing.

(3)

In section 89(2)(a) and (b), replace “subsection (1)” with “subsections (1) to (1B)”.

(4)

214 Section 120 amended (Amendment to emissions returns by EPA)

In section 120, insert as subsections (2) and (3):

(2)

If the EPA proposes to amend a person’s emissions return, the EPA must notify the person of that proposal as soon as practicable.

(3)

If the EPA then becomes satisfied that the information contained in the emissions return was correct,—

(a)

the EPA must notify the person of that fact and of the effects of paragraph (b); and

(b)

section 123 applies as if the EPA had assessed the matters in the emissions return under section 121.

215 New section 120A inserted (Liabilities, penalties, and interest when emissions returns amended)

After section 120, insert:

120A Liabilities, penalties, and interest when emissions returns amended

(1)

This section applies if the EPA (on the initial notice date) notifies a person under section 120(2) that it proposes to amend their original emissions return. Terms used in this section are defined throughout, and at the end of, the section.

(2)

Until the EPA has amended the original emissions return by giving the amendment notice,—

(a)

the person’s surrender or repayment of any units for which they are liable under the original emissions return need not be made by the applicable due date; and

(b)

the EPA must not give a penalty notice to the person in relation to the original emissions return; and

(c)

if the EPA had already given a penalty notice to the person in relation to the original emissions return, the person’s payment of the penalty or any interest need not be made by the applicable due date.

(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):

(c)

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 for the unpaid base units (the amended penalty):

(d)

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):

(ii)

and 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).

Penalty notice not already given

(4)

If there are unpaid base units, and the EPA has not already given a penalty notice in relation to the original emissions return, the EPA must include with the amendment notice a penalty notice for those unpaid base units (specifying the amended penalty).

Penalty notice already given

(5)

If there are unpaid base units, and the EPA has already given a penalty notice in relation to the original emissions return, the EPA must include with the amendment notice a penalty notice for the unpaid base units that—

(a)

complies with section 134, including by—

(i)

specifying the amended penalty as required by section 134(3)(d); and

(ii)

specifying the new due date as required by section 134(3)(f); but

(b)

also—

(i)

specifies the amount of the amended interest and states that it is payable on the amended penalty; and

(ii)

states that interest is not payable on the amended penalty in the period starting on the initial notice date and ending on the new due date; and

(iii)

specifies the amount of any unnecessary penalty or unnecessary interest that the person has paid and states that the EPA is required to reimburse it.

(6)

The penalty notice given under subsection (5) has effect in accordance with its terms, instead of the penalty notice that was already given.

Other provisions

(7)

To avoid doubt, this section—

(a)

does not prevent the EPA, when requiring the surrender or repayment of units, or the payment of a penalty or interest, under this section, from taking into account any earlier surrender, repayment, or payment by the person; and

(b)

does not prevent section 134 from separately applying to any additional units (that are not surrendered or repaid by their due date).

(8)

In this section,—

amended emissions return means the original emissions return as amended by the EPA under section 120, as notified in the amendment notice

amendment notice means the notice given by the EPA under section 123(1) for the amended emissions return

interest means interest payable on a penalty under section 137

original emissions return means the person’s emissions return that the EPA proposes to amend

penalty notice means a notice given to a person under section 134(3) (because of the person’s failure to surrender or repay units by the due date).

216 Section 123 amended (Effect of amendment or assessment)

In section 123(2), replace “section 134(3)(b)” with “section 134A or 134C or required by section 120A”.

217 Section 127 amended (Time bar for amendment of emissions returns)

After section 127(2)(b), insert:

(c)

if a person submits an emissions return on receiving a notice from the EPA under section 134A(1), the period of 4 or 7 years in which the EPA may amend an emissions return under subsection (1)(a) or (b) starts from the date of submission of the emissions return.

218 Section 129 amended (Offences in relation to failure to comply with various provisions)

In section 129(1)(a), replace “(requirement to collect data or other information, calculate emissions and removals, and keep records)” with “(other than by submitting an emissions return containing incorrect calculations)”.

219 Section 132 amended (Other offences)

In section 132(1)(c), replace “(requirement to collect data or other information, calculate emissions and removals, and keep records)” with “(other than by submitting an emissions return containing incorrect calculations)”.

220 Sections 134 to 136 replaced

Replace sections 134 to 136 with:

134 Penalty for failing to surrender or repay units by due date

(1)

This section applies if a person fails, by the due date,—

(a)

to surrender units that the person is required to surrender; or

(b)

to repay units that the person is required to repay.

(2)

The person must (in addition to surrendering or repaying the units) pay to the EPA a penalty calculated as follows:

3 × a × b

where—

a

is the number of units that the person failed to surrender or repay by the due date

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.

(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)

refers to any relevant notice that the EPA has given the person in respect of the requirement to surrender or repay the units (for example, a notice given under section 123(1)); and

(c)

specifies the number of units that the person must surrender or repay; and

(d)

specifies the amount of the penalty that the person must pay under this section; and

(e)

advises that the person may request to enter into a deferred payment arrangement under section 135A; and

(f)

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.

(4)

In this section, due date means the final date by which the person was required to surrender or repay the units.

134A Penalty for failing to submit emissions return by due date

(1)

This section applies if—

(a)

a person fails to submit an emissions return by the due date; and

(b)

the EPA is satisfied that the person has not taken reasonable care; and

(c)

the EPA gives a notice to the person stating that—

(i)

the person has failed to submit the emissions return by the due date; and

(ii)

if the person does not submit the return within 20 working days after the notice is given, the EPA will make an assessment under section 121 and a penalty may apply; and

(d)

the person fails to submit the emissions return within 20 working days after the notice is given.

(2)

If the emissions return is for an activity listed in Part 1 of Schedule 4 (for post-1989 forestry), the person has either—

(a)

emissions equal to the carbon dioxide equivalent tonnes of emissions, less removals (if any), assessed for the return to the extent they match a net liability to surrender or repay units; or

(b)

removals equal to the carbon dioxide equivalent tonnes of removals, less emissions (if any), assessed for the return to the extent they match a net entitlement to receive or be reimbursed units.

(3)

If the emissions return is for any other activity, the person has either—

(a)

emissions equal to the carbon dioxide equivalent tonnes of emissions assessed for the return; or

(b)

removals equal to the carbon dioxide equivalent tonnes of removals assessed for the return.

(4)

If the person has—

(a)

emissions, they must pay to the EPA the penalty calculated under subsection (5):

(b)

removals, they must pay to the EPA the penalty calculated under subsection (5), but the maximum penalty is $1,000:

(c)

neither emissions nor removals, no penalty is payable.

(5)

The calculation is—

a × b × c

where—

a

is the person’s emissions or removals in tonnes (whichever applies)

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 (6).

(6)

The culpability factor for a person is the greatest culpability factor that the EPA is satisfied applies under this table:

Person’s level of culpabilityDid person voluntarily disclose failure or error to EPA before being informed of it by EPA?Culpability factor
Person did not take reasonable careYes0.1
No0.2
Person was grossly carelessYes0.2
No0.4
Person knowingly failedYes1.0
No1.0
Notice of penalty

(7)

If the person must pay a penalty, the EPA must give a notice to the person that—

(a)

refers to the person’s failure to submit the emissions return by the due date and the provision under which the person is required to submit the return; and

(b)

refers to the notice issued under subsection (1)(c); and

(c)

specifies the amount of the penalty that the person must pay under this section; and

(d)

advises that the person may request to enter into a deferred payment arrangement under section 135A; and

(e)

advises that, unless 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.

Meaning of due date

(8)

In this section, due date

(a)

means the final date by which the person—

(i)

was originally required to submit the emissions return; or

(ii)

would have been required to submit the emissions return had they complied with this Act in all respects; and

(b)

excludes any extension under subsection (1)(d).

134B Penalty for failing to submit annual or closing allocation adjustment by due date

(1)

This section applies if—

(a)

a person fails to submit an annual allocation adjustment under section 83 or a closing allocation adjustment under section 84 by the due date; and

(b)

the EPA is satisfied that the person has not taken reasonable care; and

(c)

the EPA gives a notice to the person stating that—

(i)

the person has failed to submit the allocation adjustment by the due date; and

(ii)

if the person does not submit the allocation adjustment within 20 working days after the notice is given, the EPA will make a decision under section 86B(4) and a penalty may apply; and

(d)

the person fails to submit the allocation adjustment within 20 working days after the notice is given.

(2)

If the result of a decision made under section 86B(4) is that—

(a)

the person is liable to surrender or repay units, they must pay to the EPA the penalty calculated under subsection (3) (in addition to surrendering or repaying the units):

(b)

the person is entitled to receive units, they must pay to the EPA the penalty calculated under subsection (3), but the maximum penalty is $1,000:

(c)

there is no change in the person’s liability or entitlement, no penalty is payable.

(3)

The calculation is—

a × b × c

where—

a

is the number of units that the person—

(i)

is liable to surrender or repay; or

(ii)

is entitled to receive

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).

(4)

The culpability factor for a person is the greatest culpability factor that the EPA is satisfied applies under this table:

Person’s level of culpabilityDid person voluntarily disclose failure or error to EPA before being informed of it by EPA?Culpability factor
Person did not take reasonable careYes0.1
No0.2
Person was grossly carelessYes0.2
No0.4
Person knowingly failedYes1.0
No1.0

(5)

If the person must pay a penalty, the EPA must give a notice to the person that—

(a)

refers to the person’s failure to submit the allocation adjustment by the due date and the provision under which the person is required to submit the allocation adjustment; and

(b)

refers to the notice issued under subsection (1)(c); and

(c)

specifies the amount of the penalty that the person must pay under this section; and

(d)

advises that the person may request to enter into a deferred payment arrangement under section 135A; and

(e)

advises that, unless 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.

(6)

In this section, due date

(a)

means the final date by which the person was originally required to submit the allocation adjustment; and

(b)

excludes any extension under subsection (1)(d).

134C Penalty for submitting incorrect emissions return

(1)

This section applies if—

(a)

the EPA amends a person’s emissions return under section 120; and

(b)

the EPA is satisfied that the amendment was needed because the person failed to take reasonable care.

(2)

In particular,—

(a)

subsections (3) to (5) apply if the emissions return is for an activity listed in Part 1 of Schedule 4 (for post-1989 forestry):

(b)

subsections (6) to (8) apply if the emissions return is for any other activity.

Activities relating to post-1989 forestry

(3)

The person has either—

(a)

emissions equal to the carbon dioxide equivalent tonnes of emissions, less removals (if any), assessed for the return to the extent they match a net liability to surrender or repay units; or

(b)

removals equal to the carbon dioxide equivalent tonnes of removals, less emissions (if any), assessed for the return to the extent they match a net entitlement to receive or be reimbursed units.

(4)

If the effect of the amendment is that—

(a)

the person’s emissions are greater, removals are lesser, or removals have become emissions, they must pay to the EPA the penalty calculated under subsection (5):

(b)

the person’s removals are greater, emissions are lesser, or emissions have become removals, they must pay to the EPA the penalty calculated under subsection (5), but the maximum penalty is $1,000:

(c)

there is no change in the person’s emissions or removals, no penalty is payable.

(5)

The calculation is—

a × b × c

where—

a

is the lesser of—

(a)

the person’s emissions or removals under the emissions return, as amended; and

(b)

the difference between (whichever applies)—

(i)

the person’s emissions under the emissions return before and after amendment; or

(ii)

the person’s removals under the emissions return before and after amendment; or

(iii)

the person’s emissions and removals under the emissions return before and after amendment, with the emissions converted to a negative number

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).

Other activities

(6)

The person has either—

(a)

emissions equal to the carbon dioxide equivalent tonnes of emissions assessed for the return; or

(b)

removals equal to the carbon dioxide equivalent tonnes of removals assessed for the return.

(7)

If the effect of the amendment is that—

(a)

the person’s emissions are greater or removals are lesser, they must pay to the EPA the penalty calculated under subsection (8):

(b)

the person’s removals are greater or emissions are lesser, they must pay to the EPA the penalty calculated under subsection (8), but the maximum penalty is $1,000:

(c)

there is no change in the person’s emissions or removals, no penalty is payable.

(8)

The calculation is—

a × b × c

where—

a

is the lesser of—

(a)

the person’s emissions or removals under the emissions return, as amended; and

(b)

whichever of the following applies:

(i)

the difference between the person’s emissions under the emissions return before and after amendment; or

(ii)

the difference between the person’s removals under the emissions return before and after amendment

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).

Culpability factor

(9)

The culpability factor for a person is the greatest culpability factor that the EPA is satisfied applies under this table:

Person’s level of culpabilityDid person voluntarily disclose failure or error to EPA before being informed of it by EPA?Culpability factor
Person did not take reasonable careYes0.1
No0.2
Person was grossly carelessYes0.2
No0.4
Person knowingly failedYes1.0
No1.0
Notice of penalty

(10)

If the person must pay a penalty, the EPA must give a notice to the person that—

(a)

refers to the amendment under section 120; and

(b)

specifies the amount of the penalty that the person must pay under this section; and

(c)

advises that the person may request to enter into a deferred payment arrangement under section 135A; and

(d)

advises that, unless 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.

Meaning of due date

(11)

In this section, due date

(a)

means the final date by which the person—

(i)

was originally required to submit the emissions return; or

(ii)

would have been required to submit the emissions return had they complied with this Act in all respects; and

(b)

excludes any extension under section 134A(1)(d).

134D Penalty for providing incorrect information in allocation application or adjustment

(1)

This section applies if—

(a)

the EPA reconsiders, varies, or revokes (changes) a decision on a person’s allocation application or adjustment under section 86C; and

(b)

the EPA is satisfied that the change was needed because the person failed to take reasonable care.

(2)

If the effect of the change is that—

(a)

the person is liable to surrender or repay additional units, or is entitled to receive fewer units, they must pay to the EPA the penalty calculated under subsection (3) (in addition to surrendering or repaying any required units):

(b)

the person is liable to surrender or repay fewer units, or is entitled to receive additional units, they must pay to the EPA the penalty calculated under subsection (3), but the maximum penalty is $1,000:

(c)

there is no change in the person’s liability or entitlement, no penalty is payable.

(3)

The calculation is—

a × b × c

where—

a

is the lesser of—

(a)

the total number of units the person is liable to surrender or repay, or is entitled to receive, under the decision, as changed; and

(b)

the number of units that the person—

(i)

is now liable to surrender or repay as additional units, or is no longer entitled to receive, as a result of the change (if subsection (2)(a) applies); or

(ii)

is no longer liable to surrender or repay, or is now entitled to receive as additional units, as a result of the change (if subsection (2)(b) applies)

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).

(4)

The culpability factor for a person is the greatest culpability factor that the EPA is satisfied applies under this table:

Person’s level of culpabilityDid person voluntarily disclose failure or error to EPA before being informed of it by EPA?Culpability factor
Person did not take reasonable careYes0.1
No0.2
Person was grossly carelessYes0.2
No0.4
Person knowingly failedYes1.0
No1.0

(5)

If the person must pay a penalty, the EPA must give a notice to the person that—

(a)

refers to the change under section 86C; and

(b)

specifies the amount of the penalty that the person must pay under this section; and

(c)

advises that the person may request to enter into a deferred payment arrangement under section 135A; and

(d)

advises that, unless 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.

(6)

In this section, due date

(a)

means the final date by which the person was originally required to submit the allocation application or adjustment; and

(b)

excludes any extension under section 134B(1)(d).

135 Date for payment of penalty

(1)

A person must pay a penalty imposed under sections 134 to 134D within 20 working days after notice is given of the penalty.

(2)

However, if a deferred payment arrangement has been made under section 135A, the person must pay the penalty by the date or dates agreed under the arrangement.

135A Deferred payment arrangements for payments of penalties

(1)

A person who is liable to pay a penalty imposed under sections 134 to 134D may request to enter into an arrangement with the EPA for the person to pay the penalty after the date required by section 135(1), either in a single payment or in instalments.

(2)

The EPA must consider the request, taking into account the person’s financial position on the date on which the request is made.

(3)

The EPA may—

(a)

accept the request; or

(b)

request further information from the person; or

(c)

make a counter offer; or

(d)

if subsection (5) applies, decline the request.

(4)

If the EPA requests further information from the person or makes a counter offer,—

(a)

the person must provide the information or respond to the offer within 20 working days after the request or offer, or within a longer period allowed by the EPA; and

(b)

if the person provides the information or responds to the offer later than required, the provision of the information or the response must be treated as a new request to enter into an arrangement.

(5)

The EPA may decline to enter into an arrangement with the person if the EPA considers that—

(a)

the person is in a position to pay all of the penalty immediately; or

(b)

the person is being frivolous or vexatious; or

(c)

the person has not met their obligations under a previous arrangement.

(6)

The renegotiation of an arrangement is treated as if it were a new request to enter into an arrangement. Renegotiation may be initiated—

(a)

by the person at any time; or

(b)

by the EPA at any time after the end of 12 months after the date on which the arrangement was entered into.

(7)

The EPA may cancel an arrangement if—

(a)

it was entered into on the basis of false or misleading information provided by the person; or

(b)

the person is not meeting their obligations under the arrangement.

136 Penalties are debt due to Crown

The amount of a penalty imposed under sections 134 to 134D, together with any interest that accrues on that penalty, constitutes a debt due to the Crown and is recoverable by the EPA in a court of competent jurisdiction.

221 Section 137 amended (Interest for late payment)

(1)

Replace section 137(1) with:

(1)

This section applies if—

(a)

a person is liable to pay a penalty imposed under sections 134 to 134D; and

(b)

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); and

(c)

in the case of a penalty imposed under section 134, the person has not surrendered or repaid the units to which the penalty relates.

(2)

In section 137(2), delete “excess emissions”.

(3)

Replace section 137(2)(b) with:

(b)

for the period from the date by which the penalty was due to be paid until the penalty and any interest due have been paid in full and, in the case of a penalty imposed under section 134, the person has surrendered or repaid the units to which the penalty relates.

(4)

(5)

In section 137(4)(a), replace “or to transfer units to a Crown holding account under section 136 and pay the penalty in full” with “and pay the penalty”.

(6)

Replace section 137(6) with:

(6)

Despite anything in this section, the EPA may remit all or part of an amount of interest that has accrued under this section if the EPA is satisfied that it would be manifestly unfair or unjust to impose all, or that part, of the amount.

222 Section 138 amended (Obligation to pay penalty not suspended by appeal)

(1)

Replace section 138(1) with:

(1)

The obligation to pay and the right to receive and recover any penalty imposed under sections 134 to 134D or interest imposed under section 137 are not suspended by any review or appeal.

(2)

In section 138(2) and (4), delete “excess emissions”.

223 Section 138A replaced (Penalties to be paid into Crown account)

Replace section 138A with:

138A Penalties to be paid into Crown account

The EPA must pay the amount of all penalties and interest on the penalties received from a person in accordance with sections 134 to 134D or 137 into a Crown Bank Account.

224 Section 159 amended (Recovery of costs)

(1)

In section 159(1)(a), replace “1 year of the date of a penalty notice given under section 134 or 136” with “90 days after the date of a penalty notice given under section 134”.

(2)

In section 159(3), replace the definition of variable C with:

C

is the price, in dollars, of carbon per tonne on the relevant date, as set by or in accordance with regulations made under section 30W.

(3)

In section 159(4), replace “section 134, 134A, or 136” with “section 134 to 134D”.

(4)

Replace section 159(5) with:

(5)

In this section,—

insolvency process means receivership under the Receiverships Act 1993, liquidation under the Companies Act 1993, or bankruptcy under the Insolvency Act 2006

relevant date means the earlier of—

(a)

the date that is 90 days after the date of the penalty notice; and

(b)

the date on which the person enters into an insolvency process.

225 Section 179 amended (Forest land to be treated as deforested in certain cases)

(1)

Replace section 179(1)(a) with:

(a)

4 years after clearing, none of the following apply:

(i)

the hectare has at least 500 stems of exotic forest species growing:

(ii)

the hectare has been replanted with at least 100 stems of willows or poplars in a manner consistent with managing soil erosion:

(iii)

the hectare has predominantly indigenous forest species growing in a manner in which the hectare is likely to be forest land 10 years after the hectare was cleared; or

(2)

In section 179(1)(b)(i) and (c), replace “at least” with “more than”.

(3)

In section 179(1A), replace “Subsection (1)(a)(iii)” with “Subsection (1)(a)(ii)”.

226 Section 181 amended (When deforestation to be treated as occurring in respect of pre-1990 forest land)

(1)

Replace section 181(1) with:

(1)

This section applies to any hectare of pre-1990 forest land that is being converted to land that is not forest land.

(1A)

The hectare of forest land is to be treated as being deforested on the date of the first action on it that is inconsistent with it remaining forest land.

(2)

In section 181(2), replace “Subsection (3) applies to a landowner converting a hectare of pre-1990 forest land that” with “However, subsection (3) applies if the hectare of forest land”.

(3)

Replace section 181(3) with:

(3)

The hectare of forest land is to be treated as being deforested on the date of the first action on it that—

(a)

is inconsistent with the hectare remaining forest land; and

(b)

happens after the date of transfer of the land or the date of the expiry or termination of the forestry right, Crown forestry licence, lease, or other agreement relating to the land.

(3A)

In any case, the liability in respect of the deforestation must be calculated by reference to the age and forest species of the trees when they were cleared, unless section 186(2) applies.

227 Section 189 amended (Emissions returns for post-1989 forest land activities)

In section 189(8)(d)(ii), replace “sections 134 and 135” with “sections 134, 134A, and 134C”.

228 Section 192 amended (Effect of transmission of interest in post-1989 forest land)

(1)

In section 192(1), table, Part B, in the first and second rows, in the third and fourth columns, after “forest land”, insert “(only if agreed under subsection (1A))”.

(2)

After section 192(1), insert:

(1A)

Despite subsection (1)(b), if a transferor covered by that paragraph grants a registered forestry right or registered lease described in the second column of Part B of the table in that subsection, this section applies only if, before the date of transmission,—

(a)

the transferor and the transferee have agreed in writing that the transferee is to become the participant in relation to the post-1989 forest land to which the transmitted interest relates; and

(b)

the transferor has given written notice of the agreement to the EPA.

(3)

In section 192(2), replace “In subsections (1)” with “In subsections (1), (1A),”.

229 Section 217 amended (Transitional provision for penalties)

(1)

In section 217(2)(b)(ii), replace “an excess emissions penalty under section 134(2)(b)(ii) or 134A(2)(b)” with “a penalty under section 134, 134A, or 134C”.

(2)

In section 217(2)(c), replace “section 134, 134A, or 136” with “section 134”.

(3)

After section 217(2), insert:

(3)

The participant—

(a)

is not liable to pay a penalty under section 134B or 134D that relates to an allocation of units in respect of that first year; and

(b)

is not liable for any infringement offence (as defined by section 30L) in respect of an act or omission in that first year.

230 Section 233 amended (Rate of synthetic greenhouse gas levy)

(1)

In section 233(1), replace the definition of variable B with:

B

is the price of carbon specified by or under regulations made under section 30W or, if section 236(2) applies, set by that provision

231 Section 236 amended (Maximum price of carbon for purpose of levy calculation)

In section 236(2),—

(a)

replace “section 233(4)(a)” with “section 30W(1)(a)”:

(b)

after “for that levy year”, insert “but only for the purposes of the calculation in section 233”.

232 Schedule 1AA amended

(1)

In Schedule 1AA, after clause 10(3), insert:

(4)

Section 89(1A) and (1B) does not apply in respect of failures or errors made by a person before 1 January 2021.

(2)

In Schedule 1AA, after subpart 2, insert:

Subpart 3—Provisions that commence on 1 January 2021

15 Existing regulations about price of carbon

(1)

This clause applies to any regulations made under section 233(4) that, immediately before the commencement of this clause,—

(a)

prescribe the methodology for specifying the price of carbon; or

(b)

specify the price of carbon by applying the methodology.

(2)

On and after the commencement of this clause, the regulations continue in force and must be treated as if they were made under section 30W.

16 Penalties

(1)

This clause applies in respect of a person who, before the commencement of this clause,—

(a)

fails to surrender or repay units by the due date; or

(b)

fails to submit an emissions return or annual or closing allocation adjustment; or

(c)

submits an incorrect emissions return, allocation application, or allocation adjustment.

(2)

Sections 134 to 134D, as inserted by the amendment Act, do not apply in respect of the person for the failure or error.

(3)

This Act, as in force immediately before the commencement of this clause, applies in respect of the person for the failure or error.

17 Penalties for forestry activities before 2023 with liability for lower amounts

(1)

This clause applies if—

(a)

new section 134 would otherwise apply to the person (because they have failed to surrender or repay units by a due date); and

(b)

that liability to surrender or repay the units resulted from—

(i)

a forestry activity carried out before 1 January 2023; and

(ii)

1 or more of the following things in relation to the forestry activity:

(A)

an emissions return with an emissions return period and under which the average liability per year of that period is less than 25,000 units:

(B)

an emissions return without an emissions return period and under which the liability is less than 25,000 units:

(C)

any other requirement in this Act (for example, the requirement to repay units under section 125 or any requirement to surrender units equal to a unit balance) and under which the liability is less than 25,000 units.

(2)

Under this clause, instead of new section 134 (and other new provisions of this Act that refer to that section) applying, the following provisions apply to the person with the modifications specified:

Excess emissions penalty for failing to surrender or repay units

(a)

former section 134(1)(a) and (c), (2)(a) and (b)(i) and (iii), (3)(a), and (4), as if—

(i)

former section 134(1)(a) applied to the failure to surrender the units (if any); and

(ii)

former section 134(1)(c) applied to the failure to repay the units (if any):

Further excess emissions penalty for failing to surrender or repay units when required by notice under section 134

(b)

former section 134A:

Reductions in penalty

(c)

former section 135(1) and (1A):

Deferred payment arrangements for payments of penalties

(d)

new section 135A, as if—

(i)

a penalty imposed under former section 134, 134A, or 136 were imposed under new section 134; and

(ii)

new section 135A(1) referred to the date required by that former section (instead of by new section 135(1)):

Additional excess emissions penalty for knowing failure to comply

(e)

former section 136(1)(a)(ii) and (b)(ii), (2)(a)(ii) and (b), and (3) to (5):

Interest for late payment

(f)

former section 137(1)(a)(i) and (iii) and (b), (2) to (5), and (7), and new section 137(6):

Obligation to pay penalty not suspended by appeal

(g)

former section 138:

Penalties to be paid into Crown account

(h)

former section 138A:

Review and appeal

(i)

former sections 144 to 146:

Recovery of costs

(j)

former section 159, as if its subsection (3) specified that variable C is the price, in dollars, of carbon per tonne 1 year after the date of the penalty notice given under former section 134 or 136 in relation to the units, as set by or in accordance with regulations made under new section 30W:

Transitional provision

(k)

former section 217(2)(b)(ii) and (c):

Other former provisions

(l)

any other former provision of this Act that provides for a process that applies to any former provision applied by this clause:

EPA to publish certain information

(m)

new section 89, as if a penalty imposed under former section 134, 134A, or 136 were a qualifying penalty.

(3)

In this section,—

former, in relation to a provision, means the provision as in force immediately before the commencement of this clause

new, in relation to a provision, means the provision as in force on or after the commencement of this clause.

Subpart 4—Amendments that commence on 1 January 2023

233 Section 3A amended (Treaty of Waitangi (Te Tiriti o Waitangi))

(1)

Replace section 3A(b)(viii) with:

(viii)

section 60A (exemptions for participants in standard forestry or permanent forestry):

(2)

Replace section 3A(b)(xvi) and (xvii) with:

(xva)

section 180G (exemptions for deforestation of land with tree weeds):

(xvi)

section 181W (P90 offsetting):

(xvia)

section 190F (pecuniary penalty for clear-felling):

(xvib)

section 191I (averaging):

(xvic)

section 192U (P89 offsetting):

(xvid)

section 193R (temporary adverse event suspensions):

(xvii)

section 194B (input returns):

234 Section 3B amended (Consultation about certain regulations, orders, and notices)

(1)

Replace section 3B(1)(g) with:

(g)

section 60A (exemptions for participants in standard forestry or permanent forestry):

(2)

Replace section 3B(1)(o) and (p) with:

(na)

section 180G (exemptions for deforestation of land with tree weeds):

(o)

section 181W (P90 offsetting):

(oa)

section 190F (pecuniary penalty for clear-felling):

(ob)

section 191I (averaging):

(oc)

section 192U (P89 offsetting):

(od)

section 193R (temporary adverse event suspensions):

(p)

section 194B (input returns):

235 Section 4 amended (Interpretation)

(1)

In section 4(1), repeal the definitions of carbon accounting area, carbon equivalence, clear, exempt land, forestry activity, offsetting forest land, pre-1990 forest land, pre-1990 offsetting forest land, removal activity, and usual rotation period.

(2)

In section 4(1), insert in their appropriate alphabetical order:

carbon accounting area means an area of post-1989 forest land—

(a)

that—

(i)

is defined by a person who is registered, or has applied to register, as a participant under section 57 in relation to an activity of standard forestry or permanent forestry; and

(ii)

meets any relevant criteria specified in regulations made under this Act; or

(b)

that is constituted as a carbon accounting area by a provision of this Act

carbon accounting area (averaging) has the meaning given in section 191B(2)

clear,—

(a)

in relation to a tree,—

(i)

includes—

(A)

felling, harvesting, burning, removing by mechanical means, spraying with a herbicide intended to kill the tree, or undertaking any other form of human activity that kills the tree; and

(B)

felling, burning, killing, uprooting, or destroying by a natural cause or event; but

(ii)

does not include pruning or thinning; and

(b)

in relation to land, means to clear (as defined in paragraph (a)) the forest species that are on the land

clear-felled, in relation to an area of land, means an area—

(a)

of at least 1 hectare; and

(b)

on which any trees are cleared or killed by any form of human activity, including by felling, harvesting, burning, removing by mechanical means, or spraying with a herbicide intended to kill the tree; and

(c)

that, after that type of clearing or killing, has tree crown cover from forest species of 30% or less in each hectare

constitution date, in relation to a carbon accounting area, means,—

(a)

for a carbon accounting area that is defined in an application referred to in section 182C(1), the date the applicant’s registration takes effect under section 57(8); or

(b)

for a carbon accounting area that a participant applies to add under section 182C(3), the date of the notice given under section 182C(6)(b)(ii); or

(c)

for any other carbon accounting area, the date on which a person becomes a participant in an activity in the carbon accounting area under a provision of Part 5

exempt land

(a)

means pre-1990 forest land that has been declared to be exempt land—

(i)

under section 180B or 180D; or

(ii)

under section 180E, as long as the EPA has not declared otherwise (because a requirement or condition has been breached); but

(b)

does not include any forest land that met the definition in paragraph (a), but has been deforested, and in respect of which the number of units that would have been required to be surrendered in relation to an activity listed in Part 1 of Schedule 3, had the land not been exempt land, have been surrendered under section 182A(2)

first rotation forest has the meaning given in section 191C(3) and (4)

forest sink covenant means a forest sink covenant that is or was registered against land under section 67ZD of the Forests Act 1949

forestry activity means—

(a)

an activity listed in Part 1 or 1A of Schedule 3 (deforesting certain pre-1990 forest land or P90 offsetting land); or

(b)

an activity listed in Part 1 or 1A of Schedule 4 (standard forestry or permanent forestry on post-1989 forest land)

permanent forestry has the meaning given in section 182

pre-1990 forest land means forest land that—

(a)

is either of the following:

(i)

land—

(A)

that was forest land on 31 December 1989; and

(B)

that remained as forest land on 31 December 2007 (taking into account subsection (5)); and

(C)

where the forest species on the forest land on 31 December 2007 consisted predominantly of exotic forest species; or

(ii)

land that has become pre-1990 forest land under section 181T; and

(b)

is not either of the following:

(i)

land that has been deforested and in respect of which any liability to surrender units arising in respect of an activity listed in Part 1 of Schedule 3 has been satisfied; or

(ii)

land that was declared to be exempt land and has been deforested, and in respect of which the number of units that would have been required to be surrendered in respect of an activity listed in Part 1 of Schedule 3, had the land not been exempt land, have been surrendered under section 182A(2)(b)

removal activity means—

(a)

an activity of standard forestry or permanent forestry (on post-1989 forest land); or

(b)

an activity that is listed in Part 2 of Schedule 4 (other removal activities)

standard forestry has the meaning given in section 182

subsequent rotation forest has the meaning given in section 191C(6)

temporary adverse event land has the meaning given in section 193(1)

(3)

In the definition of deforest, replace “section 181” with “section 180A”.

(4)

In section 4(1), definition of post-1989 forest land, replace paragraph (a)(iv) with:

(iv)

land—

(A)

that was pre-1990 forest land that was the subject of a P90 offset application; and

(B)

that ceased to be forest land while section 179A(1)(b) applied to it (so it could not be treated as deforested); and

(C)

in respect of which a liability to surrender units arose under section 181D (because the P90 offset application was declined) or section 181N(3) (because the land became area 1 (not offset) land),—

but only if that liability has been satisfied:

(5)

In section 4(1), definition of post-1989 forest land, paragraph (a)(v), replace “pre-1990 offsetting forest land” with “P90 offsetting land”.

(6)

In section 4(1), definition of post-1989 forest land, paragraph (a)(vi)(B), replace “section 187” with “section 182A”.

(7)

In section 4(1), definition of post-1989 forest land, replace paragraph (b) with:

(b)

is not area 1 (approved) land (as defined in section 181) or P90 offsetting land

(8)

In section 4(1), definition of tree weed, replace “a tree” with “a forest species”.

(9)

In section 4(7)(c), replace “section 183(7)” with “section 180B(7)”.

236 Section 54 amended (Participants)

In section 54(1)(a)(i) and (2), replace “186I” with “181P”.

237 Section 56 amended (Registration as participant in respect of activities listed in Schedule 3)

Replace section 56(5) with:

(5)

To avoid doubt, a person carrying out an activity on land to which section 179A applies (and which therefore may not be treated as deforested) is not carrying out an activity listed in Schedule 3, and so does not have to notify the EPA under subsection (1)(a).

238 Section 57 amended (Applicant to be registered as participant in respect of activities listed in Schedule 4)

After section 57(4)(ba), insert:

(bb)

if the activity is standard forestry or permanent forestry, has met any obligations incurred while previously registered (if ever) in respect of an activity of standard forestry; and

239 Section 58 amended (Removal from register of participants in respect of activities listed in Schedule 4)

In section 58(4), replace “section 188(7)” with “section 186A”.

240 New section 59AA inserted (Removal from register for persistent non-compliance (standard forestry participants only))

After section 59, insert:

59AA Removal from register for persistent non-compliance (standard forestry participants only)

(1)

The EPA may remove the name of a person from the register kept under section 57 in respect of an activity of standard forestry if—

(a)

the person has not submitted an emissions return required by section 183A by 365 days after the date on which the person was required to submit the emissions return; or

(b)

the person has not surrendered or repaid units by 365 days after the date on which the person was required to surrender or repay the units; or

(c)

the person has not paid a penalty imposed by sections 134 to 134D by the first day that is—

(i)

at least 90 days after the date on which the person was required to pay the penalty; and

(ii)

at least 365 days after the date on which the person was required to surrender or repay the units or submit the emissions return to which the penalty relates.

(2)

However, the EPA may not rely on subsection (1)(a) to remove the name of a person from the register if—

(a)

the person has submitted an emissions return under section 183 within 365 days after the date on which the emissions return required by section 183A was required to be submitted; or

(b)

the EPA has made an assessment under section 121 of the matters that should have been in the person’s emissions return, and—

(i)

the person has surrendered any units required to be surrendered as a result of the assessment; and

(ii)

the person has paid any penalties resulting from the failure to submit the return and from the assessment.

(3)

At least 90 days before removing the name of the person from the register, the EPA must notify the person—

(a)

that the EPA proposes to remove the name of the person from the register; and

(b)

of the reason for the proposed removal (for example, failure to surrender units); and

(c)

of the actions that the person may take to prevent the removal (for example, surrender the units that the person has failed to surrender).

(4)

The EPA may still take action under this section if it is unable to notify the person of its proposal to do so because it is not reasonably practicable to locate them or their address.

241 Section 60A amended (Exemption for participants in activity listed in Part 1 of Schedule 4)

(1)

In the heading to section 60A, replace activity listed in Part 1 of Schedule 4 with standard forestry or permanent forestry.

(2)

In section 60A(1), replace “an activity listed in Part 1 of Schedule 4” with “standard forestry or permanent forestry”.

242 Section 62 amended (Monitoring of emissions and removals)

In section 62, insert as subsection (2):

(2)

Subsection (1)(b) does not apply in relation to emissions and removals that a person is not required to calculate under—

(a)

section 191G, relating to carbon accounting areas (averaging); or

(b)

section 193F(3), relating to temporary adverse event land.

243 Section 63 amended (Liability to surrender units to cover emissions)

(1)

After section 63(1), insert:

(1A)

However, subsection (1) does not apply to emissions for which a participant is not liable to surrender units as a result of any of the following:

(a)

section 179A (when forest land may not be treated as deforested):

(b)

section 182G (certain natural events or clearance for forest management):

(c)

sections 185A and 192L(3) (limiting liability to unit balances for carbon accounting areas):

(d)

section 191F(2) (carbon accounting areas (averaging)):

(e)

section 193F(1) (temporary adverse event land).

(2)

(3)

After section 63(4), insert:

(5)

See also sections 189E, 189F, and 189G in relation to liability to surrender units when transferring—

(a)

from PFSI activity to standard forestry in a carbon accounting area (averaging); or

(b)

between permanent forestry and standard forestry in a carbon accounting area (averaging).

244 Section 64 amended (Entitlement to receive New Zealand units for removal activities)

Replace section 64(1A) with:

(1A)

Subsection (1) does not apply to removals for which a participant is not entitled to receive units under—

(a)

section 191E, relating to carbon accounting areas (averaging); or

(b)

section 193F(1), relating to temporary adverse event land; or

(c)

section 197, relating to grant-funded forests.

245 Section 65 amended (Annual emissions returns)

(1)

Replace section 65(1) and (1A) with:

(1)

In the period beginning on 1 January and ending on 31 March in each year, a participant must submit an annual emissions return to the EPA in respect of each of the activities listed in Schedule 3 or Part 2, 3, or 4 of Schedule 4 that the participant carried out in the immediately preceding year.

(2)

In section 65(2)(b), replace “section 62(b)” with “section 62(1)(b)”.

(3)

(4)

In section 65(4)(a), delete “or recorded under subsection (2A)(b)”.

(5)

Replace section 65(5) with:

(5)

Despite the rest of this section, a participant in an activity of standard forestry or permanent forestry (on post-1989 forest land) must instead submit emissions returns as required by Part 5.

(6)

To avoid doubt, a person carrying out an activity on land to which section 179A applies (and which therefore may not be treated as deforested) is not carrying out an activity listed in Schedule 3, and so does not have to submit an annual emissions return under subsection (1).

246 Section 67 amended (Retention of emissions records)

(1)

In section 67(1)(b), replace “section 62(b)” with “section 62(1)(b)”.

(2)

In section 67(2)(a), replace “section 62(d)” with “section 62(1)(d)”.

(3)

In section 67(2)(b), replace “an activity listed in Part 1 of Schedule 3 or 4” with “a forestry activity”.

247 Section 89 amended (EPA to publish certain information)

After section 89(1C)(b), insert:

(c)

a penalty imposed under section 190E or 190H.

248 Section 91 amended (Approval of unique emissions factors)

In section 91(1), replace “section 62(b)” with “section 62(1)(b)”.

249 Section 92 amended (Recognition of verifiers)

In section 92(1), replace “section 62(a)” with “section 62(1)(a)”.

250 Section 107 amended (Applications for emissions rulings)

(1)

In section 107(1)(c), replace “186F, 194C,” with “180G, 181W, 190F, 191I, 192U, 193R, 194B,”.

(2)

In section 107(1)(ca)(ii), replace “section 184(5)(a)” with “section 180E(3)(a)”.

251 Section 109 amended (Making of emissions rulings)

In section 109(3), example, replace “listed in Part 1 of Schedule 4” with “of standard forestry”.

252 Section 118 amended (Submission of final emissions returns)

After section 118(3), insert:

(3A)

However, subsections (1) and (3) do not apply to a participant in an activity of standard forestry or permanent forestry (on post-1989 forest land), who must instead submit emissions returns as required by Part 5.

253 Section 127 amended (Time bar for amendment of emissions returns)

(1)

In section 127(1)(a), replace “under section 187 or 191” with “required by section 182A or 186B”.

(2)

In section 127(1)(b), replace “section 189 or 193” with “section 183, 183A, 187, 188, 189, 192A, 192Q, 193A, or 193K”.

254 New section 128A and cross-heading inserted

After section 128, insert:

Notices required from participants

128A EPA may act if participant fails to give notice

(1)

The EPA may act under this section if it is satisfied that a participant has failed to give a notice in accordance with section 181G, 192J, or 193K (the notice provision).

(2)

The EPA may,—

(a)

if no notice has been given, prepare the notice that ought to have been given; or

(b)

if a notice has been given but is not complete, complete the notice.

(3)

The EPA may do the following when preparing or completing the notice:

(a)

if the notice must include an emissions return (including any new unit balance report), the EPA may apply—

(i)

section 120 to amend an emissions return that was included; or

(ii)

section 121 to assess the matters that should have been in an emissions return that was not included; and

(b)

if the notice must include any other information, prepare or complete that information by making any required assumptions or estimates.

(4)

Before taking action under this section, the EPA must notify the participant of its intention to do so, and give them at least 60 working days to give or correct the required notice.

(5)

If the participant gives or corrects the required notice by that deadline, the notice must be treated as having been given to the EPA—

(a)

in accordance with the notice provision; and

(b)

on the last day on which it could have been given under that provision.

(6)

The EPA may still take action under this section if it is unable to notify the participant of its intention to do so because it is not reasonably practicable to identify or locate them or their address.

(7)

Despite subsection (2),—

(a)

for a notice under section 181G,—

(i)

the EPA cannot identify any land as area 2 (excess) land; and

(ii)

if any land in area 2 that is qualifying forest land is not identified as area 2 (forested land), the EPA must identify it as area 2 (non-ETS) land; and

(b)

for a notice required by section 192J, the EPA cannot identify any land as P89 offsetting (excess) land.

255 Section 129 amended (Offences in relation to failure to comply with various provisions)

In section 129(1)(b)(v), replace “192(3)” with “187(4)”.

256 Section 134A amended (Penalty for failing to submit emissions return by due date)

In section 134A(2), replace “listed in Part 1 of Schedule 4 (for post-1989 forestry)” with “of standard forestry or permanent forestry”.

257 Section 134C amended (Penalty for submitting incorrect emissions return)

In section 134C(2)(a), replace “listed in Part 1 of Schedule 4 (for post-1989 forestry)” with “of standard forestry or permanent forestry”.

258 Section 135A amended (Deferred payment arrangements for payments of penalties)

(1)

In section 135A(1), after “sections 134 to 134D”, insert “, 190E, or 190H”.

(2)

In section 135A(1), after “section 135(1)”, insert “or 190I(3)(a)”.

259 Section 136 amended (Penalties are debt due to Crown)

In section 136, after “sections 134 to 134D”, insert “, 190E, or 190H”.

260 Section 137 amended (Interest for late payment)

In section 137(1)(a), after “sections 134 to 134D”, insert “, 190E, or 190H”.

261 Section 138 amended (Obligation to pay penalty not suspended by appeal)

In section 138(1), after “sections 134 to 134D”, insert “, 190E, or 190H”.

262 Section 138A amended (Penalties to be paid into Crown account)

(1)

In section 138A, replace “or 137” with “, 137, 190E, or 190H”.

(2)

In section 138A, insert as subsection (2):

(2)

However, this section is subject to a court order that a penalty imposed under section 190E or 190H must be applied first to pay the EPA’s actual costs in bringing the proceedings.

263 Section 153 amended (Effect of being member of consolidated group)

In section 153(6)(a)(ii), replace “section 187” with “section 182A”.

264 Section 157A amended (Changes to unincorporated bodies that are participants)

In section 157A(4), replace “section 192(1)(a)” with “section 187(1)(a)”.

265 Section 159 amended (Recovery of costs)

In section 159(4), after “section 134 to 134D”, insert “, 190E, or 190H”.

266 Section 163 amended (Regulations relating to methodologies and verifiers)

(1)

In section 163(1)(a) and (e)(i), replace “section 62(a)” with “section 62(1)(a)”.

(2)

In section 163(1)(b), replace “section 62(b)” with “section 62(1)(b)”.

267 Section 167 amended (Regulations relating to fees and charges)

(1)

In section 167(2)(c), replace “section 194A” with “section 194”.

(2)

In section 167(2)(c), replace “section 194B” with “section 194A”.

268 Section 168 amended (Other regulations)

(1)

In section 168(1)(ca), replace “section 183” with “section 180B”.

(2)

In section 168(1)(j), replace “section 62(d)” with “section 62(1)(d)”.

(3)

After section 168(1)(n), insert:

(naa)

prescribing additional criteria for the approval of—

(i)

an application to reconfigure carbon accounting areas for standard or permanent forestry, for the purposes of section 188A(2)(c):

(ii)

an application to change activity on post-1989 forest land, for the purposes of section 189A(2)(d); and

269 Section 169 amended (Incorporation by reference in certain regulations)

In section 169(4), replace “186F, 194C,” with “180G, 181W, 190F, 191I, 192U, 193R, 194B,”.

270 Section 178A amended (Option to pay money instead of surrendering, repaying, or reimbursing units)

(1)

In section 178A(1)(a)(i)(B), replace “183A(2)(b)” with “180C(2)(b)”.

(2)

In section 178A(1)(b)(i), replace “activity on post-1989 forest land” with “activity of standard forestry”.

271 Section 178C amended (Fixed price (for option to pay money instead of surrendering, repaying, or reimbursing units))

In section 178C(3), replace “activity on post-1989 forest land” with “activity of standard forestry”.

272 Part 5 replaced

Replace Part 5 with:

Part 5 Sector-specific provisions: forestry

Subpart 1—Deforestation

179 Forest land to be treated as deforested in certain cases

(1)

Without limiting paragraph (a) of the definition of deforest in section 4(1), a hectare of forest land must be treated as deforested for the purposes of this Act if the forest species on that hectare have been cleared and,—

(a)

4 years after clearing, none of the following apply:

(i)

the hectare has at least 500 stems of exotic forest species growing:

(ii)

the hectare has been replanted with at least 100 stems of willows or poplars in a manner consistent with managing soil erosion:

(iii)

the hectare has predominantly indigenous forest species growing in a manner in which the hectare is likely to be forest land 10 years after the hectare was cleared; or

(b)

10 years after clearing,—

(i)

predominantly exotic forest species are growing, but that hectare does not have tree crown cover of more than 30% from trees that have reached 5 metres in height; or

(ii)

predominantly indigenous forest species are growing, but that hectare is not forest land; or

(c)

20 years after clearing, predominantly indigenous forest species are growing, but that hectare does not have tree crown cover of more than 30% from trees that have reached 5 metres in height.

(2)

Subsection (1)(a)(ii) applies only if the EPA is satisfied that the relevant local authority has determined that the soil erosion risk of the land is at least moderate.

(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; but

(b)

the liability in respect of the deforestation must be calculated 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.

(4)

Nothing in this section limits the EPA’s ability to exercise powers under section 121 in respect of the deforestation of a hectare of forest land whenever the EPA considers that—

(a)

the hectare has been converted to land that is not forest land; and

(b)

any obligations imposed under this Act in respect of the deforestation have not been complied with.

179A Forest land may not be treated as deforested in certain cases

(1)

Despite section 179 and the definition of deforest in section 4(1),—

(a)

in the case of pre-1990 forest land, pre-1990 forest land that is cleared may not be treated as deforested for the purposes of this Act if the cleared land is exempt land or—

(i)

is contiguous with the edge of pre-1990 forest land that existed on 31 December 2007; and

(ii)

is an area that is less than 1 hectare or that is less than 30 metres wide at its widest point; and

(iii)

is required to be or remain cleared to implement New Zealand’s best practice forest management; and

(iv)

is used only for the purpose of implementing New Zealand’s best practice forest management:

(b)

in the case of pre-1990 forest land in relation to which a P90 offset application has been submitted under section 181A, the land may not be treated as deforested during the period—

(i)

starting on the date on which the application is submitted; and

(ii)

ending on the P90 offset date for the land under section 181F(3):

(c)

in the case of post-1989 forest land, the post-1989 forest land that is cleared may not be treated as deforested if the cleared land—

(i)

is contiguous with the edge of post-1989 forest land that existed on the date of the first registration of any person as a participant in standard forestry or permanent forestry in respect of the cleared land; and

(ii)

is an area that is less than 1 hectare or that is less than 30 metres wide at its widest point; and

(iii)

is required to be or remain cleared to implement New Zealand’s best practice forest management; and

(iv)

is used only for the purpose of implementing New Zealand’s best practice forest management.

(2)

However, in relation to subsection (1)(b), see section 181D, under which the effect of subsection (1)(b) may be reversed.

(3)

If subsection (1)(c) applies (where land is cleared for forest management), see sections 182G, 186A, and 186C.

(4)

This section applies to land that was cleared before, on, or after the commencement of this section.

(5)

If regulations prescribe any meaning for New Zealand’s best practice forest management, then that term has (or includes) that meaning in this section.

Subpart 2—Pre-1990 forest land

180 Participant in respect of pre-1990 forest land

(1)

If the activity listed in Part 1 of Schedule 3 is carried out, the landowner of the pre-1990 forest land is to be treated as the person carrying out the activity unless the EPA is satisfied that—

(a)

the right to decide to deforest the pre-1990 forest land was vested by the landowner in a third party, whether before or after 1 January 2008; and

(b)

the landowner had no control over the decision.

(2)

If the EPA is satisfied that the criteria specified in subsection (1)(a) and (b) are met, the third party is to be treated as the person carrying out the activity.

(3)

To avoid doubt, for the purposes of this Act, no person, other than a landowner or, in the circumstances in subsection (2), a third party, is to be treated as carrying out an activity listed in Part 1 of Schedule 3.

180A When deforestation to be treated as occurring in respect of pre-1990 forest land

(1)

This section applies to any hectare of pre-1990 forest land that is being converted to land that is not forest land.

(2)

The hectare of forest land is to be treated as being deforested on the date of the first action on it that is inconsistent with it remaining forest land.

(3)

However, subsection (4) applies if the hectare of forest land was cleared but not deforested prior to—

(a)

the forest land being transferred to the landowner; or

(b)

control of the forest land reverting to that landowner following the expiry or termination of a forestry right, Crown forestry licence, lease, or other agreement that relates to the land.

(4)

The hectare of forest land is to be treated as being deforested on the date of the first action on it that—

(a)

is inconsistent with the hectare remaining forest land; and

(b)

happens after the date of transfer of the land or the date of the expiry or termination of the forestry right, Crown forestry licence, lease, or other agreement relating to the land.

(5)

In any case, the liability in respect of the deforestation must be calculated by reference to the age and forest species of the trees when they were cleared, unless section 180H(2) applies.

(6)

This section applies only if section 4(5) does not apply.

(7)

To avoid doubt, this section does not apply—

(a)

to land to which section 179A applies (and which therefore may not be treated as deforested); or

(b)

to land to which section 181N(3) applies.

180B Applications for exemption for land holdings of less than 50 hectares of pre-1990 forest land

(1)

This section applies to a person who—

(a)

is a landowner of an area of pre-1990 forest land at the date of issue of the pre-1990 forest land allocation plan; or

(b)

was the landowner of an area of pre-1990 forest land at the date (if any), between 1 January 2008 and the date of issue of the pre-1990 forest land allocation plan, on which the area was converted to land that is not forest land.

(2)

A person to whom this section applies may apply to the EPA for the area of pre-1990 forest land to be declared exempt land if—

(a)

the area is less than 50 hectares; and

(b)

the area was owned on 1 September 2007 by a person or persons who, along with any associated persons, owned in total less than 50 hectares of pre-1990 forest land; and

(c)

no allocation of units to a landowner has been made in respect of the area under the pre-1990 forest land allocation plan.

(3)

An application under subsection (2) must—

(a)

be submitted to the EPA by—

(i)

the date prescribed by regulations made under section 168(1)(ca); or

(ii)

in the absence of a date prescribed by regulations made under section 168(1)(ca), the date specified by public notice given by the EPA; and

(b)

be in the prescribed form and accompanied by the prescribed fee (if any); and

(c)

contain details of the area of pre-1990 forest land to which the application relates; and

(d)

be accompanied by evidence showing that the land is pre-1990 forest land; and

(e)

be accompanied by a statutory declaration,—

(i)

in the case of land owned by a sole professional trustee or owned by professional trustees only, from the trustee of the trust that is the subject of the exemption application stating that the total of pre-1990 forest land held in the trust on 1 September 2007—

(A)

was less than 50 hectares; and

(B)

was owned by a sole professional trustee or owned by professional trustees only:

(ii)

in any other case, from each person who owned the land on 1 September 2007 (other than a joint tenant who is a professional trustee) stating that the person, together with any persons associated with that person, owned less than a total of 50 hectares of pre-1990 forest land on 1 September 2007; and

(f)

be signed by the applicant; and

(g)

be accompanied by any other prescribed information.

(4)

If the EPA is satisfied that the applicant is a person to whom this section applies, the land is pre-1990 forest land, and each of the criteria specified in subsection (2)(a) to (c) is met, the EPA must—

(a)

declare the land to be exempt land; and

(b)

notify the applicant that the land has been declared exempt land.

(5)

Despite subsection (3)(a), the EPA may, at its discretion, accept applications after the date specified in the public notice given under subsection (3)(a)(ii) or prescribed by regulations under section 168(1)(ca).

(6)

The following rules apply for the purposes of determining, under subsection (2)(b), whether an area of pre-1990 forest land was owned on 1 September 2007 by a person or persons who, along with any associated persons, owned in total less than 50 hectares of pre-1990 forest land:

(a)

the EPA must consider only pre-1990 forest land in respect of which the person or associated person was a landowner on 1 September 2007; and

(b)

if land was owned by persons as joint tenants,—

(i)

in the case where 1 or more of the joint tenants is a professional trustee, each of the joint tenants other than the professional trustee or trustees must individually have been a landowner of less than 50 hectares of pre-1990 forest land; or

(ii)

in the case where none of the joint tenants is a professional trustee, each of the joint tenants must individually have been a landowner of less than 50 hectares of pre-1990 forest land; and

(c)

if land was owned by persons as tenants in common, each tenant in common’s interest in the land is to be treated as a divided interest on 1 September 2007; and

(d)

if land was owned by a sole professional trustee or owned by professional trustees only, the total pre-1990 forest land held in the trust on 1 September 2007 was less than 50 hectares.

(7)

For the purposes of this section and section 180D,—

own, in relation to pre-1990 forest land, means to be a landowner of the land

professional trustee

(a)

means a trustee whose profession, employment, or business is or includes acting as a trustee or investing money on behalf of others; and

(b)

includes a trustee in whom property is vested under Te Ture Whenua Maori Act 1993.

180C Certain applications not otherwise permitted by section 180B

(1)

Despite section 180B(2)(c) and (3)(a), a person may make an application under section 180B by 31 December 2013 if—

(a)

the area concerned was owned, as at 1 September 2007, by a sole professional trustee or by professional trustees only; and

(b)

an allocation of units has been made before the commencement of the Climate Change Response (Emissions Trading and Other Matters) Amendment Act 2012 in respect of the area under the pre-1990 forest land allocation plan.

(2)

If the EPA proposes to accept the application, the EPA must notify the applicant that—

(a)

it proposes to accept the application; but

(b)

the applicant must first, within 30 working days after receiving the notice, surrender or repay to the Crown holding account specified in the notice the number of units specified in the notice; and

(c)

if the units are not surrendered or repaid in accordance with paragraph (b), then the application will be declined.

(3)

The units referred to in subsection (2) must be the same number of units that have been allocated and transferred under the pre-1990 forest land allocation plan in relation to the land concerned.

(4)

The EPA must—

(a)

accept the application and declare the area concerned to be exempt land if, by the expiry of the 30 days, the units have been surrendered or repaid; or

(b)

decline the application if, by the expiry of the 30 days, the units have not been surrendered or repaid.

(5)

To avoid doubt,—

(a)

section 180B otherwise applies to an application permitted by this section, but subject to the modifications made by this section; and

(b)

if an application is granted and an area is declared to be exempt land, the entitlement to units under the pre-1990 forest land allocation plan in respect of the land is cancelled.

180D Applications for exemption for some Maori land or land with 10 or more owners

(1)

This section applies to an area of pre-1990 forest land that—

(a)

is less than 50 hectares; and

(b)

on 1 September 2007,—

(i)

was all of the pre-1990 forest land held in a document that is equivalent to a record of title under the Land Transfer Act 2017 or, if there was no such document, in another instrument of title; and

(ii)

was Maori land or was owned by more than 10 persons; and

(c)

was an area of pre-1990 forest land on the following date (the qualifying date):

(i)

the date of issue of the pre-1990 forest land allocation plan; or

(ii)

the date (if any), between 1 January 2008 and the date of issue of the pre-1990 forest land allocation plan, on which the area was converted to land that is not forest land; and

(d)

after the qualifying date,—

(i)

became owned by the trustees of a trust; or

(ii)

in the case of Maori freehold land, had an agent appointed for it under Te Ture Whenua Maori Act 1993 with the power to apply under this section; and

(e)

has not been the subject of an allocation of units to a landowner under the pre-1990 forest land allocation plan.

(2)

The trustees or agent described in subsection (1)(d) may apply to the EPA for the area of pre-1990 forest land to be declared exempt land.

(3)

The application—

(a)

may be submitted to the EPA at any time; and

(b)

must be in the prescribed form and accompanied by the prescribed fee (if any); and

(c)

must contain details of the area of pre-1990 forest land to which the application relates; and

(d)

must be accompanied by evidence showing that the land is pre-1990 forest land; and

(e)

must be accompanied by a statutory declaration from the applicant stating that the area of pre-1990 forest land was, on 1 September 2007, all of the pre-1990 forest land held in a document that is equivalent to a record of title under the Land Transfer Act 2017 or, if there was no such document, in another instrument of title; and

(f)

must be signed by the applicant; and

(g)

must be accompanied by any other prescribed information.

(4)

If the EPA is satisfied that the applicant is 1 or more trustees or an agent described in subsection (1)(d), that the land is pre-1990 forest land, and that each of the criteria specified in subsection (1)(a) to (e) is met, the EPA must—

(a)

declare the land to be exempt land; and

(b)

notify the applicant that the land has been declared exempt land.

180E Exemptions for deforestation of land with tree weeds

(1)

An application may be made under this section for pre-1990 forest land to be declared exempt land (in relation to deforestation) if a prescribed type of tree weed—

(a)

is growing on the land; or

(b)

was cleared from the land as part of the deforestation process on or after 1 January 2008.

(2)

The application may be made by—

(a)

the landowner of the pre-1990 forest land; or

(b)

a third party to whom section 180 applies.

(3)

The EPA must consider the application against the prescribed criteria and priorities and—

(a)

may declare the land, or any part of the land, to be exempt land, if satisfied that—

(i)

the applicant is eligible to apply for the exemption under subsection (2); and

(ii)

the land is pre-1990 forest land; and

(iii)

the criteria specified in subsection (1) are met; and

(b)

must, if the EPA declares any land to be exempt land, notify the applicant of—

(i)

the declaration; and

(ii)

any requirements or conditions that the EPA has decided to impose on the person whose land is exempted.

(4)

The EPA—

(a)

may declare that a person’s land ceases to be exempt land (under this section) if the person breaches any requirement or condition that the EPA imposed on them for the exempt land; and

(b)

if it does so, must notify the person of the declaration.

(5)

If a person is convicted of an offence under section 132 or 133 in relation to an application under this section,—

(a)

the person must be treated as a person who has failed to submit an annual emissions return in respect of an activity listed in Part 1 of Schedule 3 when required to do so under this Act; and

(b)

the EPA must make an assessment of the matters that should have been in the person’s annual emissions return and the number of units the person would have been liable to surrender if the land had not been exempt land; and

(c)

the person is liable to surrender the number of units in the assessment under paragraph (b); and

(d)

section 123(1) to (3) and the other provisions of this Act apply as if the assessment under paragraph (b) were an assessment under section 121.

180F Effect of exemption

The status of pre-1990 forest land as exempt land runs with the land and is not affected by any change in the ownership of the land.

180G Regulations about exemptions for deforestation of land with tree weeds

(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 relation to exemptions under section 180E:

(a)

prescribing the types of tree weed for which an application may be made for pre-1990 forest land to be declared exempt land:

(b)

defining those types of tree weed based on any matter, such as the following:

(i)

the species of tree weed:

(ii)

the geographical location of the tree weed:

(iii)

whether a weed control programme applies to the tree weed:

(c)

prescribing processes for making applications to the EPA for an exemption, including fees for applications:

(d)

prescribing the information required in an application, including—

(i)

information to properly describe or define the land:

(ii)

evidence about the land and the forest species on the land:

(e)

prescribing the criteria and priorities that the EPA must consider in deciding whether to grant an exemption:

(f)

prescribing any requirements or conditions that the EPA may impose on a person whose land is exempted, including for weed control on the land:

(g)

specifying that 1 or more of the following is different for different types of tree weed:

(i)

the process for making the application:

(ii)

the information required in the application:

(iii)

the criteria and priorities that the EPA must consider:

(iv)

any requirements or conditions that the EPA may impose on a person whose land is exempted:

(h)

providing for any other matters contemplated by sections 180E and 180F, necessary for their administration, or necessary for giving them full effect.

(2)

See sections 3A and 3B for consultation requirements that apply to the making of the regulations.

(3)

The regulations come into force 3 months after the date of their notification in the Gazette, or on any later date specified in the regulations.

180H Methodology for pre-1990 forest land cleared in 8 years or less

(1)

Subsection (2) applies where the trees cleared from pre-1990 forest land by a person carrying out the activity in Part 1 of Schedule 3 are 8 years or younger.

(2)

If this subsection applies, the participant must,—

(a)

for the purposes of sections 62(1)(b) and 65(2)(b), apply any prescribed methodology and calculate and record the emissions from the activity as if the trees cleared from the pre-1990 forest land were trees of the age and species of the oldest trees of the predominant species (as determined by regulations made under section 163) cleared from the pre-1990 forest land during the previous 9 years (excluding any period in which the pre-1990 forest land is temporarily unstocked); and

(b)

surrender units under this Act based on emissions calculated and recorded in accordance with paragraph (a).

(3)

A methodology for calculating emissions from the activity in Part 1 of Schedule 3 prescribed in regulations under section 163 must relate to the trees that are cleared from the pre-1990 forest land as part of the deforestation activity.

Subpart 3—P90 offsetting land

181 Interpretation

In this subpart,—

area 1 (approved) land means land that—

(a)

has become area 1 (approved) land under section 181C(2)(a); and

(b)

has not ceased to be area 1 (approved) land under section 181N(2)(a) to (d)

area 1 (damaged) land has the meaning given in section 181G(3)(a)(iii)

area 1 (forested) land has the meaning given in section 181G(3)(a)(ii)

area 1 (not offset) land has the meaning given in section 181G(3)(a)(iv)

area 1 (offset) land has the meaning given in section 181G(3)(a)(i)

area 2 (approved) land means land that—

(a)

has become area 2 (approved) land under section 181C(2)(c) or 181J(2)(b); and

(b)

has not ceased to be area 2 (approved) land under section 181N(2)(e) to (i)

area 2 (damaged) land has the meaning given in section 181G(3)(b)(iii)

area 2 (excess) land means land that—

(a)

has become area 2 (excess) land under section 181G(3)(b)(iv); and

(b)

has not ceased to be area 2 (excess) land under section 181N(5)

area 2 (forested) land has the meaning given in section 181G(3)(b)(i)

area 2 (non-ETS) land has the meaning given in section 181G(3)(b)(v)

area 2 (unforested) land has the meaning given in section 181G(3)(b)(ii)

baseline carbon stock has the meaning given in section 181F(2)

baseline date has the meaning given in section 181F(3)

default P90 offset date has the meaning given in section 181F(5)(a)

expected carbon stock has the meaning given in section 181F(4)

P90 offset application means an application submitted to the EPA under section 181A

P90 offset application date means the date on which a P90 offset application is submitted to the EPA under section 181A

P90 offset date has the meaning given in section 181F(5)

P90 offset release criteria has the meaning given in section 181F(1)

P90 offsetting land means land that—

(a)

has become P90 offsetting land under section 181N(2)(e); and

(b)

has not ceased to be P90 offsetting land under—

(i)

section 181R(1)(a), for clearing before the required equivalence date; or

(ii)

section 181S(1)(a), for deforestation before the required equivalence date; or

(iii)

section 181T(1)(a), on the required equivalence date

P90 release criteria notice means a notice given under section 181G(1)

required equivalence date has the meaning given in section 181F(6).

P90 offset application

181A Application to offset land for pre-1990 forest land

(1)

The owner of pre-1990 forest land may apply to the EPA to offset other land for the pre-1990 forest land.

(2)

The application must—

(a)

specify the pre-1990 forest land to which the application relates (area 1); and

(b)

specify the land proposed as offsetting land for that pre-1990 forest land (area 2); and

(c)

include any information prescribed in regulations made under section 181W.

(3)

If area 1 and area 2 are owned by different persons, the application must be made jointly by all the owners of both areas.

(4)

The application must—

(a)

be signed by all of the applicants; and

(b)

be submitted—

(i)

in the prescribed manner and format; and

(ii)

together with the prescribed fee (if any); and

(iii)

together with the prescribed information (if any).

181B Criteria for P90 offset application

(1)

If a person submits a P90 offset application, the EPA,—

(a)

if satisfied that the criteria in subsection (2) were met on the P90 offset application date, must approve the application; or

(b)

otherwise, may decline the application (then see section 181D).

(2)

The criteria are that—

Area 1 criteria

(a)

the land in area 1 is pre-1990 forest land that is one or other of the following:

(i)

land that was first planted before 1 January 1990; or

(ii)

land that was harvested and re-established after 1 January 1960; and

Area 2 criteria

(b)

the land in area 2 is 1 or more of the following:

(i)

land that is not forest land on the P90 offset application date but, if it were to become forest land,—

(A)

would be post-1989 forest land; and

(B)

if it were in a carbon accounting area, would meet the criteria in section 191C for having a first rotation forest:

(ii)

post-1989 forest land that—

(A)

became post-1989 forest land less than 2 years before the P90 offset application date; and

(B)

meets the criteria in section 191C for having a first rotation forest (or would do so if it were in a carbon accounting area):

(iii)

area 2 (excess) land, unless the re-use period prescribed in regulations made under section 181W has expired:

(iv)

P89 offsetting (excess) land (as defined in section 192), unless the re-use period prescribed in regulations made under section 181W has expired; and

(c)

if any of the land in area 2 is in a carbon accounting area, all of the land in the carbon accounting area—

(i)

is land to which paragraph (b) applies; and

(ii)

is part of area 2; and

(d)

the total area (whether contiguous or not) of area 2 is equal to or greater than the total area (whether contiguous or not) of area 1; and

(e)

each individual parcel that makes up area 2 has an area of at least 1 hectare with an average width of at least 30 metres; and

Participant criteria

(f)

each person who will be a participant 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

P90 offset release criteria

(g)

the EPA is satisfied that, if all of the land in area 1 becomes area 1 (offset) land, on the P90 offset date the P90 offset release criteria are likely to be met; and

Prescribed criteria

(h)

any other criteria prescribed in regulations made under section 181W are met.

181C Effect of approval of P90 offset application

(1)

This section applies if the EPA approves a P90 offset application.

(2)

Starting on the P90 offset application date,—

(a)

area 1 is area 1 (approved) land; and

(b)

if any of the land in area 2 is in a carbon accounting area, the participant for that land—

(i)

is liable to surrender the number of units equal to the unit balance of that carbon accounting area; and

(ii)

ceases to be a participant in the relevant activity on that carbon accounting area; and

(c)

area 2 is the area 2 (approved) land for area 1.

(3)

If subsection (2)(b) applies, the EPA must amend the register kept under section 57, and the records of carbon accounting areas kept under section 182C(2), to record the effects of this section.

(4)

If subsection (2)(b)(i) applies,—

(a)

the notice requiring those units to be surrendered (referred to in section 63(4)) must also set out the effect of paragraph (b); and

(b)

if the units are not surrendered by the due date, the EPA may revoke the approval by giving written notice to the participant.

(5)

If an approval is revoked under subsection (4), this Act applies as if the application had never been made.

(6)

However, despite subsection (5), the effect of subsection (2)(b)(ii) is not reversed (so the person is not reinstated as a participant for the carbon accounting area).

181D Effect of P90 offset application being declined

(1)

This section applies if—

(a)

the EPA declines a P90 offset application; and

(b)

an activity listed in Part 1 of Schedule 3 was carried out on any of the land in area 1 (the affected land) on a date (date D) that was on or after the P90 offset application date but before the application was declined.

(2)

The owner of the affected land on date D—

(a)

is liable to surrender the number of units they would have been required to surrender when that activity was carried out if the application had not been made; and

(b)

must comply with sections 56 and 65 in relation to that liability.

(3)

The emissions return required under subsection (2)(b) must cover the period starting on the P90 offset application date and ending on date D, as if that period were all part of the immediately preceding year.

Liability to surrender allocation

181E Allocations for pre-1990 forest land to be surrendered when application approved

(1)

This section applies in relation to pre-1990 forest land if—

(a)

the land becomes area 1 (approved) land; and

(b)

an allocation was made in respect of the land as part of the second tranche (whether or not the units were actually transferred when allocated).

(2)

The owner of the land must,—

(a)

if they do not have a holding account under section 18A, open a holding account; and

(b)

surrender or repay the number of units equal to the number allocated as part of the second tranche by transferring them to a Crown holding account.

(3)

The owner must do so within 30 working days after the EPA gives them a notice requiring them to do so.

(4)

The notice must specify—

(a)

the number of units to be surrendered or repaid; and

(b)

the Crown holding account to which the units must be transferred.

(5)

In this section, second tranche means the allocation of units under the pre-1990 forest land allocation plan that were transferred on or after 1 January 2013.

Offsetting on P90 offset date

181F P90 offset release criteria

(1)

The P90 offset release criteria in respect of area 1 (approved) land and its area 2 (approved) land are that, on the P90 offset date,—

(a)

the area of the area 2 (forested) land and any area 2 (damaged) land is equal to or greater than the area of the area 1 (offset) land; and

(b)

the expected carbon stock of the area 2 (forested) land and any area 2 (damaged) land is equal to or greater than the baseline carbon stock for the area 1 (offset) land; and

(c)

any other criteria prescribed in regulations made under section 181W are met.

(2)

The baseline carbon stock for area 1 (offset) land is the carbon stock that the land had on the baseline date, determined in accordance with regulations made under section 181W.

(3)

The baseline date, for area 1 (approved) land, is—

(a)

if, on the P90 offset application date, every hectare of land in area 1 had forest species on it that had tree crown cover of more than 30%, the P90 offset application date; or

(b)

if not, the date on which the clearing of area 1 started most recently before the P90 offset application date.

(4)

The expected carbon stock,—

(a)

of area 2 (forested) land, is the carbon stock that the land is expected to have achieved on the required equivalence date determined in accordance with regulations made under section 181W; and

(b)

of area 2 (damaged) land, is the carbon stock that the land would have been expected to have achieved on the required equivalence date had it not been affected by the adverse natural event determined in accordance with regulations made under section 181W.

(5)

The P90 offset date, in relation to area 1 (approved) land, is—

(a)

the date 4 years after the baseline date (the default P90 offset date); or

(b)

if a P90 release criteria notice is given before the default P90 offset date, the date on which the notice is given.

(6)

The required equivalence date is the last day of the period that—

(a)

starts when the forest species on area 2 (approved) land are first established; and

(b)

ends at the end of the usual rotation period prescribed in regulations made under section 181W for the forest species that were on the area 1 (approved) land on the baseline date.

181G P90 release criteria notice

(1)

The owners of the land in area 1 and area 2 must give notice (P90 release criteria notice) to the EPA under this section identifying the status of all land in area 1 and area 2 (including any additional land in relation to which an application is being made under section 181H) on the P90 offset date.

(2)

The P90 release criteria notice—

(a)

may be given before the default P90 offset date (under section 181F(5)(a)); but

(b)

if not given before that date, must be given within 60 working days after the default P90 offset date.

(3)

The P90 release criteria notice must—

(a)

identify all of the land in area 1 as one of the following:

(i)

area 1 (offset) land, being all the land in area 1 (other than any area 1 (damaged) land) that, on the P90 offset date,—

(A)

has ceased to be forest land; or

(B)

has been cleared with the intention that it will cease to be forest land:

(ii)

area 1 (forested) land, being all the land in area 1 that is still forest land on the P90 offset date, other than any land that is area 1 (offset) land under subparagraph (i)(B):

(iii)

area 1 (damaged) land, being any land in area 1 that has been affected by a natural event that permanently prevents re-establishing a forest on the land:

(iv)

area 1 (not offset) land, being any land in area 1 that section 181L requires to be identified as area 1 (not offset) land; and

(b)

identify all of the land in area 2 as one of the following:

(i)

area 2 (forested) land, being all the land in area 2 that is qualifying forest land on the P90 offset date, other than any land that is area 2 (excess) land or area 2 (non-ETS) land:

(ii)

area 2 (unforested) land, being all the land in area 2 that is not qualifying forest land on the P90 offset date, other than land that is area 2 (damaged) land:

(iii)

area 2 (damaged) land, being any land in area 2 that, before the P90 offset date, was affected by a natural event that permanently prevents establishing a forest on the land:

(iv)

area 2 (excess) land, being any land in area 2 that—

(A)

is qualifying forest land on the P90 offset date (but see subsection (4)); and

(B)

does not need to be included in the area 2 (forested) land in order for the P90 offset release criteria to be met; and

(C)

the owners want to be excluded from the area 2 (forested) land and to be available for re-use under section 181B(2)(b)(iii) or 192B(2)(c)(iii):

(v)

area 2 (non-ETS) land, being any land in area 2 that—

(A)

is qualifying forest land on the P90 offset date (but see subsection (4)); and

(B)

does not need to be included in the area 2 (forested) land in order for the P90 offset release criteria to be met; and

(C)

the owners want to be excluded from the area 2 (forested) land but not to be available for re-use under section 181B(2)(b)(iii) or 192B(2)(c)(iii); and

(c)

specify—

(i)

the baseline carbon stock for the area 1 (offset) land; and

(ii)

the expected carbon stock of the area 2 (forested) land; and

(d)

include any information prescribed in regulations made under section 181W.

(4)

If an application is made under section 181H to add additional land, the additional land must be identified as area 2 (forested) land.

(5)

The P90 release criteria notice must—

(a)

be made jointly by all of the persons who, on the P90 offset date, own land in area 1 or area 2 (including any additional land in relation to which an application is made under section 181H); and

(b)

be signed by all of the owners; and

(c)

be given within 60 working days after the P90 offset date; and

(d)

be given—

(i)

in the prescribed manner and format; and

(ii)

together with the prescribed fee (if any); and

(iii)

together with the prescribed information (if any).

(6)

Land is qualifying forest land if—

(a)

each hectare of the land has forest species on it that have, or are likely to have, tree crown cover of more than 30%; and

(b)

those forest species were established by direct planting activities, including direct seeding but excluding natural forest regeneration; and

(c)

each individual parcel that makes up the land has an area of at least 1 hectare and has an average width of at least 30 metres.

181H Application to add area 2 (approved) land

(1)

An application to add more land (additional land) to the area 2 (approved) land may be made when the P90 release criteria notice is given to the EPA.

(2)

The application must—

(a)

be made jointly by all of the persons who own land in area 1, area 2, or the additional land; and

(b)

be signed by all of the applicants; and

(c)

be given—

(i)

in the prescribed manner and format; and

(ii)

together with the prescribed fee (if any); and

(iii)

together with the prescribed information (if any).

181I Criteria for adding area 2 (approved) land

(1)

If an application is made under section 181H, the EPA,—

(a)

if satisfied that the criteria in subsection (2) are met, must approve the application; or

(b)

otherwise, may decline the application.

(2)

The criteria are that—

(a)

the additional land—

(i)

is land of a kind specified in section 181B(2)(b)(ii), (iii), or (iv); and

(ii)

is qualifying forest land (as defined in section 181G(6)); and

(b)

if the application is not approved, on the P90 offset date the P90 offset release criteria in section 181F(1)(a) or (b) (or both) will not be met; and

(c)

the area of the additional land is not more than is necessary to enable the P90 offset release criteria to be met; and

(d)

any other criteria prescribed in regulations made under section 181W are met.

181J Effect of approval of application to add area 2 (approved) land

(1)

This section applies if the EPA approves an application under section 181H to add land to the area 2 (approved) land.

(2)

On the P90 offset date (but before section 181N takes effect),—

(a)

if any of the additional land is a carbon accounting area, the participant for that land—

(i)

is liable to surrender the number of units equal to the unit balance of that carbon accounting area; and

(ii)

ceases to be a participant in the relevant activity on that carbon accounting area; and

(b)

the additional land becomes part of the area 2 (approved) land (and is therefore part of area 2 and becomes area 2 (forested) land (see section 181G(3)(b)(i) and (4)).

(3)

If subsection (2)(a) applies, the EPA must amend the register kept under section 57, and the records of carbon accounting areas kept under section 182C(2), to record the effects of this section.

(4)

If subsection (2)(a)(i) applies,—

(a)

the notice requiring those units to be surrendered (referred to in section 63(4)) must also set out the effect of paragraph (b); and

(b)

if the units are not surrendered by the due date, the EPA may revoke the approval by giving written notice to the participant.

(5)

If an approval is revoked under subsection (4), this Act applies as if the application had never been made, except that—

(a)

the effect of subsection (2)(a)(ii) is not reversed (so the person is not reinstated as a participant for the carbon accounting area); and

(b)

section 181M does not apply.

181K Effect of application to add area 2 (approved) land being declined

(1)

This section applies if the EPA declines an application under section 181H to add land to the area 2 (approved) land.

(2)

The EPA must notify the applicants of—

(a)

the decision and the reasons for it; and

(b)

the owners’ right under section 144 to seek a review of that decision; and

(c)

the effect of subsection (3) and section 128A.

(3)

If the EPA gives a notice under subsection (2),—

(a)

the P90 release criteria notice that was accompanied by the application is taken not to have been given; and

(b)

the owners must give the EPA—

(i)

a revised P90 release criteria notice for area 1 and area 2; and

(ii)

if they wish to do so, another application under section 181H to add additional land; and

(c)

the deadline for giving the P90 release criteria notice under section 181G(2)(b) is extended to 60 working days after the notice was given under subsection (2).

(4)

However, if the owners have previously given a revised notice under subsection (3)(b)(i) that was accompanied by an application under section 181H,—

(a)

subsection (3)(b)(ii) does not apply and the owners cannot make another application under section 181H; and

(b)

section 181M does not apply.

181L Land that must be identified as area 1 (not offset) land

(1)

Land in area 1 must be identified as area 1 (not offset) land if, in the absence of this section,—

(a)

the land would be identified as area 1 (offset) land; and

(b)

either or both of the following would apply:

(i)

the area of the area 1 (offset) land would be greater than the area of the area 2 (forested) land and any area 2 (damaged) land:

(ii)

the baseline carbon stock for the area 1 (offset) land would be greater than the expected carbon stock of the area 2 (forested) land and any area 2 (damaged) land.

(2)

The area of any land identified as area 1 (not offset) land must be the minimum area necessary to result in the P90 offset release criteria being met.

181M Extension of time to add area 2 (approved) land

(1)

This section applies if—

(a)

a P90 release criteria notice is given to the EPA within the time required by section 181G(2); and

(b)

an application under section 181H was not made when the P90 release criteria notice was given; and

(c)

the P90 release criteria notice is not a revised notice given under section 181K(3)(b); and

(d)

the EPA is not satisfied that the P90 release criteria notice identifies the land in a way that results in the P90 offset release criteria being met.

(2)

The EPA may, by giving a notice to the owners of area 1 and area 2, offer them an opportunity to submit a revised P90 release criteria notice with an application under section 181H.

(3)

The EPA’s notice must set out—

(a)

the reasons for the EPA’s decision that the P90 release criteria notice is not correct; and

(b)

the owners’ right under section 144 to seek a review of that decision; and

(c)

the effect of subsection (4) and section 128A.

(4)

If the EPA gives a notice under subsection (2),—

(a)

the P90 release criteria notice referred to in subsection (1)(a) is taken not to have been given; and

(b)

the owners must give the EPA—

(i)

a revised P90 release criteria notice for area 1 and area 2; and

(ii)

if they wish to do so, an application under section 181H to add additional land; and

(c)

the deadline for giving the P90 release criteria notice under section 181G(2)(b) is extended to 60 working days after the notice was given under subsection (2).

181N Effect on P90 offset date

(1)

This section applies if a P90 release criteria notice is given to the EPA in accordance with section 181G.

(2)

With effect on the P90 offset date,—

(a)

the area 1 (offset) land—

(i)

ceases to be area 1 (approved) land; and

(ii)

is the land against which the area 2 (forested) land and area 2 (damaged) land are compared to determine whether the P90 offset release criteria are met; and

(b)

the area 1 (forested) land—

(i)

ceases to be area 1 (approved) land; and

(ii)

is not part of the land used to determine whether the P90 offset release criteria are met; and

(c)

the area 1 (damaged) land—

(i)

ceases to be area 1 (approved) land; and

(ii)

is not part of the land used to determine whether the P90 offset release criteria are met; and

(d)

the area 1 (not offset) land—

(i)

ceases to be area 1 (approved) land; and

(ii)

is not part of the land used to determine whether the P90 offset release criteria are met; and

(e)

the area 2 (forested) land—

(i)

is part of the land used to determine whether the P90 offset release criteria are met; and

(ii)

becomes P90 offsetting land (then see sections 181P to 181T and Part 1A of Schedule 3); and

(iii)

ceases to be area 2 (approved) land; and

(f)

the area 2 (unforested) land—

(i)

is not part of the land used to determine whether the P90 offset release criteria are met; and

(ii)

ceases to be area 2 (approved) land; and

(g)

the area 2 (damaged) land—

(i)

is part of the land used to determine whether the P90 offset release criteria are met; and

(ii)

ceases to be area 2 (approved) land; and

(h)

the area 2 (excess) land—

(i)

is not part of the land used to determine whether the P90 offset release criteria are met; and

(ii)

ceases to be area 2 (approved) land, but remains area 2 (excess) land subject to subsection (5); and

(i)

the area 2 (non-ETS) land—

(i)

is not part of the land used to determine whether the P90 offset release criteria are met; and

(ii)

ceases to be area 2 (approved) land and area 2 (non-ETS) land.

(3)

Starting on the P90 offset date, the owner of the area 1 (not offset) land on the P90 offset date—

(a)

is liable to surrender units as a result of the deforestation of the land as if that deforestation had occurred on the P90 offset date (see also section 180A(7)(b)); and

(b)

must comply with sections 56 and 65 in relation to that liability.

(4)

To avoid doubt,—

(a)

the owner of the area 1 (offset) land incurs no liability under section 63 for the deforestation (because of section 179A(1)(b)); and

(b)

the owner of the area 1 (forested) land is not liable to surrender any units (because the land has not been deforested); and

(c)

the owner of the area 1 (damaged) land is not liable to surrender any units (because the land is excluded from Part 1 of Schedule 3).

(5)

Land ceases to be area 2 (excess) land if the land—

(a)

becomes area 2 (approved) land as a result of being included in a P90 offset application under section 181B(2)(b)(iii); or

(b)

becomes P89 offsetting (approved) land as a result of being included in a P89 offset application under section 192B(2)(c)(iii); or

(c)

becomes part of a carbon accounting area as a result of an application under section 182C(1) or (3).

(6)

The EPA must update the register kept under section 181U to record the effect of this section.

181O Reimbursement of surrendered allocation

(1)

This section applies if—

(a)

a person surrendered units in respect of area 1 (approved) land in accordance with section 181E(2); and

(b)

on the P90 offset date, any of that land is area 1 (forested) land or area 1 (damaged) land.

(2)

Starting on the P90 offset date, the EPA is liable to reimburse to that person (whether or not they still own the land) the number of units surrendered under section 181E(2) in respect of that area 1 (forested) land or area 1 (damaged) land.

P90 offsetting land

181P Participant in respect of P90 offsetting land

If an activity listed in Part 1A of Schedule 3 is carried out on P90 offsetting land, the landowner is to be treated as the person carrying out the activity.

181Q Clearing or deforestation before required equivalence date

(1)

This section applies if—

(a)

a P90 offset application was approved; and

(b)

on the P90 offset date, the area 2 (approved) land became P90 offsetting land for the area 1 (offset) land; and

(c)

before the required equivalence date, either or both of the following occur on some or all of the P90 offsetting land (the affected land):

(i)

the land is cleared:

(ii)

an activity listed in Part 1A of Schedule 3 (a Part 1A activity) is carried out on the land.

(2)

If the affected land is cleared, section 181R applies in relation to the clearing of the land.

(3)

If a Part 1A activity is carried out on the affected land, section 181S applies in relation to that activity.

(4)

If the affected land is cleared and later (but still before the required equivalence date) a Part 1A activity is carried out on the affected land,—

(a)

if, before the Part 1A activity is carried out, the owner submits an emissions return as required by section 181R(1)(b)(ii),—

(i)

section 181R applies in relation to the clearing of the land; and

(ii)

section 181S does not apply in relation to the Part 1A activity; or

(b)

if the owner does not submit an emissions return as required by section 181R(1)(b)(ii) before the Part 1A activity is carried out,—

(i)

section 181R does not apply in relation to the clearing of the land; and

(ii)

section 181S applies in relation to the Part 1A activity.

(5)

For the purposes of this section and section 181R, a hectare of P90 offsetting land that has been cleared is to be treated as having been cleared on the first date on which any part of that hectare was cleared.

181R Clearing before required equivalence date

(1)

If this section applies in relation to the clearing of affected land, starting on the date on which the clearing occurred,—

(a)

the affected land ceases to be P90 offsetting land; and

(b)

the owner of the affected land—

(i)

is liable to surrender the units as if the affected land were deforested on the date on which it was cleared; and

(ii)

must submit an emissions return as required by section 65 in relation to that deemed deforestation; and

(iii)

if they do not have a holding account under section 18A, must open a holding account.

(2)

However, the number of units the owner is liable to surrender under subsection (1)(b)(i) is the number calculated under subsection (3) instead of the number of units they would otherwise be liable to surrender under section 63.

(3)

The number of units to be surrendered (s) is calculated as follows:

s = (d ÷ a) × n

where—

d

is the area of the affected land (in hectares)

a

is the total area of all of the area 1 (approved) land referred to in section 181Q(1)(b) (in hectares)

n

is the baseline carbon stock of the area 1 (offset) land, as recorded under section 181U(2)(d) (in tonnes).

(4)

In the emissions return required under subsection (1)(b)(ii), the relevant portion of the emissions from the area 1 (offset) land is to be recorded as if it were the emissions from deforestation of the affected land.

(5)

The liability under subsection (1)(b)(i) is to be treated as a liability to surrender units for emissions from the deemed deforestation on the P90 offsetting land.

(6)

The EPA must update the register under section 181U to record the effect of this section.

(7)

To avoid doubt, the affected land is not to be treated as having been deforested other than as required by this section.

181S Deforestation before required equivalence date

(1)

If this section applies in relation to the carrying out of a Part 1A activity on affected land, starting on the date on which the activity was carried out,—

(a)

the affected land ceases to be P90 offsetting land; and

(b)

the owner of the affected land—

(i)

must submit an emissions return as required by section 65 as a result of the carrying out of the activity; but

(ii)

is liable to surrender the number of units calculated under subsection (2) instead of the number of units they would otherwise be liable to surrender under section 63 for the emissions from the carrying out of the activity.

(2)

The number of units to be surrendered (s) is calculated as follows:

s = (d ÷ a) × n

where—

d

is the area of the affected land (in hectares)

a

is the total area of all of the area 1 (approved) land referred to in section 181Q(1)(b) (in hectares)

n

is the baseline carbon stock of the area 1 (offset) land, as recorded under section 181U(2)(d) (in tonnes).

(3)

In the emissions return required under subsection (1)(b)(i), the relevant portion of the emissions from the area 1 (offset) land is to be recorded as if it were the emissions from the carrying out of the activity.

(4)

The liability under subsection (1)(b)(ii) is to be treated as a liability to surrender units for emissions from the carrying out of the activity on the P90 offsetting land.

(5)

The EPA must update the register under section 181U to record the effect of this section.

181T P90 offsetting land becomes pre-1990 forest land

(1)

On the required equivalence date, the P90 offsetting land—

(a)

ceases to be P90 offsetting land; and

(b)

becomes pre-1990 forest land.

(2)

The EPA must update the register under section 181U to record the effect of this section.

Administrative matters

181U P90 offsetting land register

(1)

The EPA must keep a register of the following:

(a)

P90 offsetting land:

(b)

land that has become pre-1990 forest land under section 181T and has not been recorded in the register under section 56:

(c)

area 2 (excess) land.

(2)

The register must include the following information about the registered land:

(a)

whether it is P90 offsetting land, pre-1990 forest land, or area 2 (excess) land:

(b)

a description of the land:

(c)

the area of the land (in hectares):

(d)

for P90 offsetting land, the baseline carbon stock of the relevant area 1 (offset) land (in tonnes):

(e)

for pre-1990 forest land, the date on which it became pre-1990 forest land:

(f)

for area 2 (excess) land, the date on which it became area 2 (excess) land.

181V EPA to give information on request

(1)

The EPA must, on request, give a copy of the information on the register under section 181U about P90 offsetting land to the owner of that land or the relevant area 1 (offset) land.

(2)

The EPA must, on request, give the owner of pre-1990 forest land a statement of the number of units (if any) the owner would be liable to surrender under section 181E if that section were to apply in relation to the land.

(3)

In this section,—

owner, in relation to land, means a person who owns the land, or has previously owned it, or is a prospective transferee of it

request means a written request from the person to whom the information is to be given.

181W Regulations for P90 offsetting

(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:

(a)

prescribing the information to be included in, and other requirements for,—

(i)

P90 offset applications (section 181A):

(ii)

P90 release criteria notices (section 181G):

(iii)

applications to add land to area 2 (approved) land (section 181I):

(b)

prescribing re-use periods for area 2 (excess) land or P89 offsetting (excess) land (section 181B(2)(b)(iii) and (iv)):

(c)

prescribing additional criteria for approval of—

(i)

P90 offset applications (section 181B(2)(h)):

(ii)

applications to add land to area 2 (approved) land (section 181I):

(d)

prescribing additional P90 offset release criteria (section 181F(1)(c)):

(e)

prescribing the methodology for determining—

(i)

baseline carbon stock (section 181F(2)):

(ii)

expected carbon stock (section 181F(4)):

(f)

prescribing usual rotation periods for forest species (section 181F(6)):

(g)

providing for any other matters contemplated by this subpart, necessary for its administration, or necessary for giving it full effect.

(2)

See sections 3A and 3B for consultation requirements that apply to the making of the regulations.

(3)

The regulations come into force 3 months after the date of their notification in the Gazette or on any later date specified in the regulations.

Subpart 4—Post-1989 forest land (standard and permanent forestry)

182 Standard and permanent forestry on post-1989 forest land

(1)

In this subpart,—

final forestry emissions return means an emissions return that is prepared under section 183B and is not a provisional forestry emissions return

permanent forestry means an activity listed in Part 1A of Schedule 4

provisional forestry emissions return means an emissions return submitted under section 183

standard forestry means an activity listed in Part 1 of Schedule 4.

(2)

To avoid doubt, standard forestry and permanent forestry comprise the same list of activities carried out in respect of post-1989 forest land, but the difference is that the person carrying out the activity has chosen the relevant Part of Schedule 4 to apply to the land.

182A Conditions on registration as participant in certain activities of standard or permanent forestry in respect of post-1989 forest land

(1)

A person may not be registered as a participant under section 57 in respect of an activity of standard forestry or permanent forestry that relates to—

(a)

owning any post-1989 forest land, unless the person is the landowner of the post-1989 forest land and—

(i)

there is no forestry right or lease registered in respect of that land; or

(ii)

the person has the written agreement of any holder of a registered forestry right or registered lease in respect of that land to the person registering as a participant; or

(b)

holding a registered forestry right or being the leaseholder under a registered lease in respect of any post-1989 forest land, unless the person—

(i)

is the holder of the registered forestry right or the leaseholder of the registered lease; and

(ii)

has the written agreement of the landowner of the land to the forestry right holder or leaseholder, as the case may be, registering as a participant.

(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 that has been deforested 8 or less years ago unless the person—

(a)

has submitted an emissions return to the EPA that—

(i)

records the emissions from the deforestation of the land—

(A)

that would have been required to have been recorded in an annual emissions return under section 65, had the land not been declared to be exempt land; and

(B)

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

(ii)

contains an assessment of the liability to surrender units that would have arisen in relation to the deforestation had the land not been declared to be exempt land; and

(iii)

is accompanied by the prescribed fee (if any) and any other prescribed information; and

(iv)

is signed by the person submitting the application; and

(b)

has surrendered, within 60 working days after the EPA gives the person a notice requiring the surrender, the number of units listed in the assessment under paragraph (a)(ii); and

(c)

complies with subsection (1), if applicable.

(3)

To avoid doubt, if any person is registered as a participant carrying out an activity of standard forestry or permanent forestry in respect of any post-1989 forest land, no person (including that person) can be registered as a participant carrying out a different activity of standard forestry or permanent forestry in respect of that land.

(4)

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 post-1989 forest land unless—

(a)

any action taken by the person in respect of the post-1989 forest land since 1 January 2008 (including, but not limited to, removal of any existing vegetation before planting of a forest species on the land) complied with the Resource Management Act 1991, including any plan under that Act, or the Forests Act 1949 that was in force at the time the action was taken; and

(b)

if the post-1989 forest land is subject to a pest management plan under the Biosecurity Act 1993 that imposes requirements in respect of any forest species on the land, the person has—

(i)

complied with the requirements; or

(ii)

verified that any other person required to comply with the requirements has done so.

(5)

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 post-1989 forest land where the forest species on the land is predominantly naturally regenerated tree weeds unless the EPA is satisfied that the risk of tree weed spread from the land that is the subject of the application for registration is low.

(6)

Subsection (5) does not apply to any person who has registered as a participant before 1 January 2013.

182B EPA to give public notice of criteria for assessing risk of tree weed spread

The EPA must give public notice of the criteria for assessing the risk of tree weed spread from land that is the subject of an application for registration under section 57.

182C Registration as participant in standard or permanent forestry

(1)

An application under section 57 to be registered as a participant in respect of an activity of standard forestry or permanent forestry—

(a)

may be submitted for all post-1989 forest land in respect of which the applicant carries out the activity, or any part of the land in respect of which the applicant carries out the activity; and

(b)

must define the carbon accounting area or areas in respect of which the applicant wishes to be a participant; and

(c)

must be accompanied by a declaration, in the prescribed form, that—

(i)

any action taken by the applicant since 1 January 2008 in relation to the post-1989 forest land in respect of which the application is submitted (including, but not limited to, removal of any existing vegetation before planting of a forest species on the land) complied with the Resource Management Act 1991, including any plan under that Act or the Forests Act 1949 that was in force at the time the action was taken; and

(ii)

if the post-1989 forest land is subject to a pest management plan under the Biosecurity Act 1993 that imposes requirements in respect of any forest species on the land, the applicant has—

(A)

complied with the requirements; or

(B)

verified that any other person required to comply with the requirements has done so; and

(d)

must be accompanied by any information prescribed by regulations made under this Act.

(2)

The EPA must keep the following records for the activity of standard forestry or permanent forestry for which a person is a participant (whether by registration under section 57 or otherwise):

(a)

the carbon accounting area or areas in respect of which the person is a participant; and

(b)

for each carbon accounting area used for an activity of standard forestry, whether or not it is a carbon accounting area (averaging); and

(c)

the unit balance of each carbon accounting area in respect of which the person is a participant, as calculated under the last emissions return submitted for the area.

(3)

A person who is a participant in standard forestry or permanent forestry (whether by registration under section 57 or otherwise) may apply to the EPA to add any carbon accounting area or areas to the post-1989 forest land in respect of which the person is recorded as a participant.

(4)

An application under subsection (3) must be—

(a)

in the prescribed form; and

(b)

accompanied by any prescribed fee and any prescribed information.

(5)

The EPA may (under this section) add a carbon accounting area to the post-1989 forest land in respect of which a person is recorded as a participant only if—

(a)

the EPA is satisfied that the person would (if appropriate) qualify to be registered as a participant in respect of that land under section 182A; and

(b)

where the forest species on that land is predominantly naturally regenerated tree weeds, the EPA is satisfied that the risk of tree weed spread from the land is low.

(6)

If the EPA—

(a)

registers a person as a participant under section 57 in relation to an activity of standard forestry or permanent forestry, the EPA must notify the person under section 57(6):

(b)

receives an application to add a carbon accounting area and subsection (5) is satisfied, the EPA must—

(i)

update the participant’s record to reflect the addition of the carbon accounting area; and

(ii)

notify the participant accordingly.

(7)

The addition of a carbon accounting area under subsection (6)(b)(i) has effect on and after the date of the notice given under subsection (6)(b)(ii).

(8)

See also sections 182D and 182E (which require notice to the participant and notice to interested parties, if any).

182D Notice to forestry participant if their registration added or removed

The EPA must give written or electronic notice to a participant, or former participant, of the following matters as soon as practicable after the EPA carries them out under any of Parts 5 to 5D:

(a)

the participant’s registration or removal from registration in respect of an activity, and the date on which this took or takes effect:

(b)

the addition or removal of any area or land for which the participant is registered, and the date on which this took or takes effect.

182E Notice to interested party if forestry participant’s registration added or removed

(1)

A participant must notify the interested party (if any) of the following matters under this section, in writing or electronically, as soon as practicable after receiving the EPA’s notice about, or becoming aware of, the matter:

(a)

the participant’s registration, or removal from registration, in respect of an activity, and the date that this took or takes effect:

(b)

the addition or removal of any area or land for which the participant is registered, and the date that this took or takes effect.

(2)

The EPA must provide the participant with any address that it has recorded for the interested party.

(3)

In this section, interested party means—

(a)

the landowner, in relation to a participant who is registered for an activity relating to—

(i)

holding a registered forestry right or registered lease over land; or

(ii)

being a party to a Crown conservation contract over land; or

(b)

any person with a registered forestry right or registered lease in respect of the land, in relation to a participant who is registered for an activity relating to owning post-1989 forest land.

182F Removing registration as participant in standard or permanent forestry

(1)

This section sets out some situations in which section 186 or 186B applies (which relate to ceasing participation for whole or part carbon accounting areas).

(2)

Section 186 applies if the EPA—

(a)

receives an application under section 58 for the removal of a person’s name from the register as a participant in standard forestry; or

(b)

is satisfied under section 59(2) that the person has ceased to carry out standard forestry or permanent forestry.

(3)

Section 186 applies if the EPA decides to remove the name of a person from the register in respect of an activity of standard forestry under section 59AA (for persistent non-compliance), or in respect of an activity of standard forestry or permanent forestry under section 59A (because the person never carried out the activity).

(4)

A person who is a participant in standard forestry or permanent forestry—

(a)

may apply to the EPA to—

(i)

remove any carbon accounting area or areas from the post-1989 forest land in respect of which the person is recorded as a participant; or

(ii)

remove post-1989 forest land from any carbon accounting area or areas in respect of which the person is recorded as a participant; and

(b)

must, as soon as practicable, notify the EPA if the person ceases to carry out the activity in respect of—

(i)

a carbon accounting area in respect of which the person is recorded as a participant; or

(ii)

any land in a carbon accounting area in respect of which the person is recorded as a participant.

(5)

An application or a notice under subsection (4) must be—

(a)

in the prescribed form; and

(b)

accompanied by any prescribed fee and any prescribed information.

(6)

Section 186 applies if the EPA—

(a)

receives and approves an application to remove a carbon accounting area for which a person is recorded as a participant; or

(b)

receives a notice that a person has ceased to carry out standard forestry or permanent forestry on all of a carbon accounting area; or

(c)

is satisfied that a person has ceased to carry out standard forestry or permanent forestry on all of a carbon accounting area.

(7)

Section 186B applies if the EPA—

(a)

receives and approves an application to remove land from a carbon accounting area for which a person is recorded as a participant; or

(b)

receives a notice that a person has ceased to carry out standard forestry or permanent forestry on part of a carbon accounting area; or

(c)

is satisfied that a person has ceased to carry out standard forestry or permanent forestry on part of a carbon accounting area.

(8)

This section is subject to section 190A (which restricts the removal of land relating to permanent forestry).

182G Removing registration as participant in standard or permanent forestry in certain natural events or clearance for forest management

(1)

A person who is a participant in standard forestry or permanent forestry may, as soon as practicable, notify the EPA if all or part of the post-1989 forest land on which the person carries out the activity—

(a)

is affected by a natural event that permanently prevents re-establishing a forest on that land; or

(b)

is cleared land to which section 179A(1)(c) applies (which is land cleared for best practice forest management that may not be treated as deforested).

(2)

The notice must—

(a)

include the prescribed information (if any