These regulations are made under section 30GB of the Climate Change Response Act 2002 (the Act). They come into force on 7 November 2020, which is 3 months after the date of their notification in the Gazette (regulation 2).

These regulations are made before the regulations for auctions to sell New Zealand units that are to be made under section 30GA of the Act (the main regulations). The purpose of making these regulations first is to give the emissions trading market advance notice of the prescribed limits and price control settings that will apply to auctions of New Zealand units.

Section 6A of the Act empowers the Minister for Climate Change, when the main regulations are made, to sell New Zealand units by auction within a prescribed individual limit and overall limit. These regulations set, for each of the 2021 to 2025 calendar years,—

• an individual limit on the New Zealand units available by auction (column 2 of the limits table in Schedule 2 (the limits table)); and

• an individual limit on the approved overseas units used (column 3 of the limits table); and

• an overall limit on the sum of the New Zealand units available by auction, the approved overseas units used, and the New Zealand units available by other means (column 4 of the limits table).

There is no individual limit for the New Zealand units available by other means in a calendar year, and the number of those units may cause an overall limit to be exceeded (regulation 5(2)).

These regulations also set, for each of the 2021 to 2025 calendar years,—

• the minimum price at which units may be sold by auction (column 2 of the price settings table in Schedule 2 (the price control settings table)); and

• the trigger price for the release for sale of the reserve amount of New Zealand units (column 3 of the price control settings table); and

• the reserve amount of New Zealand units that will be released for sale at an auction if the trigger price is reached or exceeded (column 4 of the price control settings table).