Guides
Guide to Emissions Returns - SEIP and LFF sectors
December 2011
This guide is for Stationary Energy and Industrial Processes (SEIP) and Liquid Fossil Fuel (LFF) Participants in the New Zealand Emissions Trading Scheme (NZ ETS) who are obliged to account for emissions from their activities from 1 January 2010.
Forestry Participants should refer to the Ministry of Agriculture and Forestry (MAF) website (www.maf.govt.nz) rather than this guide. Emissions Returns for the forestry sector are submitted to MAF.
Emissions Returns - 1 January to 31 March of each year following the reporting year
The online emissions reporting tool for the Liquid Fossil Fuels, Other Removal Activities and Stationary Energy and Industrial Processes sectors will be available to participants in these sectors on 1 January of each year following the reporting period.
Participants must use this tool to complete their emissions return for each reporting year, see Key Dates below. If you have any queries please contact 0800 CLIMATE (254 628). Guides for preparing and submitting an emission return using the online emissions reporting tool are available for each of the sectors here.
Key Dates
| Key Dates | Details |
|---|---|
| 1 January - 31 December | Reporting period. Must report total emissions for the year |
| 1 January - 31 March of the following year | Emissions return for the previous year must be submitted in this quarter
|
| 31 May | Deadline for meeting surrender obligations either through the surrender of units and/or paying $25 for each unit that is required to be surrendered
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| 31 December 2012 | Transitional Provision in respect to unit surrender obligations SEIP and LFF sectors are only liable to surrender 1 unit for each 2 whole tonnes of emissions from an activity during the period 1 July 2010 to 31 December 2012 |
Key Terms
Terms you need to be familiar with before submitting an emissions return:
| Term | Definition |
|---|---|
Participant | The person who is registered in the NZ ETS and who must submit an emissions return. |
Primary Representative | The person authorised to make transactions and operate a Holding Account on behalf of the account holder, including the Participant Holding Account, where the unit surrender transaction will be performed. |
Activity | Designated activities under the NZ ETS as set out in Schedules 3 and 4 of the Climate Change Response Act 2002 that cause either emissions or removals of greenhouse gases. |
Surrender | Participants are required to surrender one eligible unit for each whole tonne of emissions from each activity as assessed in the Participant’s emissions return. The units must be transferred to a designated Crown Surrender Account. Important: During the period 1 July 2010 to 31 December 2012 the SEIP and LFF sectors are only liable to surrender 1 unit for each 2 whole tonnes of emissions from an activity. |
Eligible units | Types of units that can be used to meet surrender obligations in the NZ ETS. The surrender of units takes place following the submission of an emissions return. See the table in the Common Questions and Answers section below. |
Reimbursement | Reimbursement of units happens when a participant surrenders too many units. |
Payment of money | A participant may meet their surrender obligations in the NZ ETS by paying the Government $25 for each unit they are required to surrender. |
Default emissions factor | The emissions factor that is listed in the schedules of the Climate Change (Stationary Energy and Industrial Processes) Regulations 2009 or the Climate Change (Liquid Fossil Fuels) Regulations 2008 that is used by default in emissions return calculations. |
Unique emissions factor | An emissions factor that is unique to a Participant for a specified period and specified class of fuel that has been approved for use instead of the default emissions factors set out in regulations. |
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Common Questions and Answers
I am a new participant in the ETS. Where do I get more information about emissions reporting for my sector? The Ministry for the Environment has emissions reporting guides specific to each of the following sector activities:
Why do I need a holding account? Participants in the NZ ETS are required to open a holding account for the purposes of receiving or surrendering emissions units.
When do I have to submit an emissions return? You must submit a return in the period from 1 January to 31 March immediately following a calendar year in which emissions reporting is required. For example, you must submit a return in the period from 1 January 2012 to 31 March 2012 for the calendar reporting period of 2011.
How will I know when I have a return due? An emissions return is due in the first quarter of each year. A reminder notice is emailed by the NZEUR before and during each submitting period.
What can I do if I know that I cannot submit my emissions return before 31 March? You can apply for an extension before the emissions return due date of 31 March. The Environmental Protection Authority (EPA) may grant you an extension of a period of no more than 20 working days if satisfied that you are unable to submit your emissions return by this due date. Any extension granted will relate only to the submitting of the emissions return and not the surrender due date.
Who do I submit my emissions returns to? You need to submit your emissions return to the EPA, who is responsible for administering the NZ ETS.
Do I have to verify my emissions before submitting the emissions return? You don’t need to have your emissions returns verified before you submit them. However, it is recommended, but not required, that participants undertake a third party verification process, following similar standards and processes for verifying data to those already used in-house, for example with financial auditing. This will assist in providing rigour and credibility to information reported.
Do I have to do an emissions return electronically? Yes, you must submit an online emissions return through the NZEUR.
Can I surrender units before submitting an emissions return? No, units can only be surrendered following the submitting of an emissions return. The emissions return will assess the number of units required to be surrendered or entitled to be received. The due date for surrendering units is 31 May of each year.
What will happen if I do not surrender units by the due date of 31 May? It is important that you meet your surrender obligations by 31 May of each year; otherwise you may be subject to a penalty of $30 for each emission unit not surrendered.
How do I surrender units? Primary representatives will transfer the number of units required to be surrendered to a designated Crown Surrender Account. The due date for the surrender of units is 31 May of each year.
What if I choose to pay $25 per unit, for some or all of the units I need to surrender to meet my obligations in the NZ ETS? You will be required to pay $25 per unit by the due date of 31 May of each year to a designated Crown bank account.
What information should my emissions return contain? Your emissions return will contain the information set out in the regulations in respect to the Liquid Fossil Fuels, Other Removal Activities, Stationary Energy and Industrial Processes sectors which set out the methodologies for calculating emissions in respect of each activity. The regulations also specify information participants are required to collect to use in these emissions calculation methodologies. Further guidance on reporting on emissions in respect of each sector is available at www.climatechange.govt.nz
What emissions factor is used? Default emissions factors are used in calculating total emissions. Default emissions factors are set out in the Schedule to the Climate Change (Liquid Fossil Fuels) Regulations 2008 or Schedule 2 of the Climate Change (Stationary Energy and Industrial Processes) Regulations 2009. Some activities are eligible for a unique emissions factor. These eligible activities are set out in the Climate Change (Unique Emissions Factors) Regulations 2009.
What happens if I identify a mistake in a submitted emissions return? You are obliged to provide correct information in an emissions return. The administering agency may reduce any financial penalty arising from the mistake by up to 100% if you voluntary disclose that you have a made a mistake before the administering agency makes it apparent that it is looking into your emissions return.
What information do I need to keep for reporting my emissions and removals? You need to keep sufficient records for the administering agency for the NZ ETS to be able to verify; the greenhouse gas-producing or removing activities carried out; the emissions and/or removals resulting from those activities; the number of emission units you need to surrender; the number of emission units you are entitled to receive, if any; and other information required by regulations.
How long do I need to keep the records for? If you are conducting forestry activities, you need to keep records for at least 20 years from the end of the year they relate to. For all other activities, you need to keep records for at least seven years from the end of the year they relate to.
How do I submit an emissions return as part of a Consolidated Group? The individual participant members of a “group” can elect to form a consolidated group (A group for the purposes of the NZ ETS has the same meaning as section 2(1) of the Financial Reporting Act 1993 – it means a group comprising a reporting entity and its subsidiaries). Each consolidated group must appoint a nominated entity (who must be part of the group, but does not have to be an NZ ETS participant) who will act as an “agent” for the consolidated group and submit a single emissions return covering all of the consolidated group’s activities. It is recommended that you contact the administering agency for more information on the requirements of consolidated groups under the NZ ETS.
Which Units Can I Use to Meet Surrender Obligations?
| UNIT TYPE | ELIGIBILITY OF UNITS TO MEET FOR SURRENDER OBLIGATIONS | |
|---|---|---|
New Zealand Units (NZUs) | Yes | Units allocated from forestry removal activities or other removal activities. Units allocated under an allocation plan. |
Assigned Amount Units (AAUs)
Imported Assigned Amount Units (Imported AAUs)
| Yes
No
| AAUs originally issued to NZ under the Kyoto Protocol can be used to meet surrender obligations.
Section 18CB of the Climate Change Response Act 2002 prohibits the use of imported AAUs for compliance purposes. No imported AAUs can be surrendered for NZ ETS compliance purposes as there are no regulations creating an exception to the prohibition. Note: Imported AAUs can still be transferred to a Holding Account in the NZEUR to be used for non-NZ ETS purposes (that is, trading units outside the NZ ETS). |
Certified Emission reduction Units (CERs)
Removal Units (RMUs) | Yes | Can be used to meet surrender obligations (apart from CERs and ERUs arising from nuclear energy projects which are excluded from the NZEUR, and therefore cannot be surrendered).
Both ERUs and RMUs can be used.
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Temporary Certified Emission Reduction Units (tCERs) Long-term certified Emission Reduction Units (lCERs) | No | Both tCERS and ICERS cannot be used to meet surrender obligations. |
This guide is based on the law at the date of issuance. The information in this guide does not alter the laws of New Zealand or other official guidelines or requirements. Readers of this guide should take specific advice from qualified professional people before undertaking any action following information received from this guide.
