Guide to Registering as a Participant - SEIP and LFF sectors

December 2011

This guide is for persons who:

carry out Stationary Energy (SE) and Industrial Processes (IP) or Liquid Fossil Fuels (LFF) activities and must register as a participant; or
wish to voluntarily participate in the New Zealand Emissions Trading Scheme (NZ ETS).

A participant is someone who carries out a greenhouse gas-producing activity detailed in Schedules 3 and 4 of the Climate Change Response Act 2002 (the Act).

The Environmental Protection Authority (EPA) is responsible for administering the NZ ETS.

Participants in the New Zealand ETS

There are two types of participants in the NZ ETS.

(1) Mandatory Participants

Most People conducting SE, IP and LFF activities have already signed up as mandatory participants in the ETS. People who start conducting these activities as detailed in Schedule 3 of the Act, or have reached the threshold, are also required to participate in the NZ ETS. These people are known as mandatory participants and they must register as a participant and give notice to the EPA within 20 working days of becoming a participant. Please note that there are offences and penalties under the Act for failure to notify the EPA when required to do so.

Mandatory participation in the SE, IP and LFF sectors include the following activities:

Stationary Energy (entered NZ ETS from 1 January 2010)	Industrial Processes (entered NZ ETS from 1 January 2010)	Liquid Fossil Fuels (entered NZ ETS from 1 January 2009 for voluntary reporting)
Importing coal more than 2,000 tonnes in a year; or Mining more than 2,000 tonnes of coal in a year, or mining coal (in the form of peat) more than 10,000 tonnes in a year	Producing iron or steel	Owning more than 50,000 litres of obligation fuel in a year at the time it is removed for home consumption
Mining natural gas other than for export; or Importing more than 10,000 litres of natural gas in a year	Producing aluminium
Using geothermal fluid for the purpose of generating electricity or industrial heat where the level of CO₂e emissions are more than 4,000 tonnes in a year	Producing clinker or burnt lime, resulting in calcinations of limestone, or calcium carbonates
Combusting used oil or waste oil for the purpose of generating electricity or industrial heat where the level of used or waste oil is more than 1,500 tonnes in a year. Combusting used tyres, or waste for the purpose of generating electricity or industrial heat	Producing glass using soda ash
Refining petroleum	Producing gold where the level of CO₂e emissions are more than 5,000 tonnes in a year

A “year” means a calendar year from 1 January to 31 December. For mandatory participants, if you exceed the threshold during a year then your obligations as a participant apply from 1 January of that same year.

(2) Voluntary Participants

Those persons conducting SE and LFF activities listed in Schedule 4 of the Act may choose to register at any time as a participant in the NZ ETS and are known as voluntary participants.

While voluntary participants have a choice about whether or not to participate in the NZ ETS, once they become a participant (through registering) all the relevant requirements of the Act and Regulations become mandatory for them to follow. Voluntary participation in the SE and LFF sectors is specific to the activities listed in the table below:

Stationary Energy (entered NZ ETS from 1 January 2009)	Liquid Fossil Fuels (entered NZ ETS from 1 January 2008 for voluntary reporting)
Purchasing more than 250,000 tonnes of coal in a year, from one or more participants who mine coal	Purchasing more than 10 million litres of obligation jet fuel in a year, from one or more participants who own obligation fuel
Purchasing more than 2 petajoules of natural gas in a year, from one or more participants who mine natural gas

How Do I Register as a Participant?

The Act sets out the requirements to be followed for registering as participants where activities are carried out:

jointly with one or more persons; or
under a permit for mining coal or natural gas; or
on your own.

The Act also provides for related companies who carry out activities to form a consolidated group for reporting and compliance purposes under the NZ ETS.

No fees are payable for processing registration of participants in the SE, IP and LFF sectors.

Before you complete the participant registration process it is important to determine how you carry out any of these activities as this will determine the way in which your obligations will be accounted for under the NZ ETS and the registration process you will have to follow to complete your notification or application to the EPA.

(a) Do you jointly carry out any of these activities?

With the exception of mining coal or natural gas, if you jointly carry out any of these activities with one or more other persons (including but not limited to in partnership, through a joint venture or as the trustees of a trust), then you must together notify the EPA. In this case, all the people jointly carrying out the activity are treated as a member of an “Unincorporated Body” and the Unincorporated Body is registered as the participant (see section 157).

Each member of an Unincorporated Body is:

jointly and severally liable for the obligations of the Unincorporated Body as a participant in respect of the activity; and
jointly entitled to the benefits of the Unincorporated Body as a participant in respect of the activity.

If you carry out activities jointly then you must notify the EPA by using the "Persons Jointly Carrying Out Activities" registration form.

(b) Do you mine coal or natural gas jointly with other persons?

If you hold a permit to mine coal or natural gas jointly with one or more other persons under terms that entitle you to a proportion of the coal or natural gas mined under the permit, then each person named on the permit will be registered separately as a participant and entered on the Participant Register (see section 204). In this case each person notifies the EPA they mine coal or natural gas by using the “Participant Notification Form – Part 3 of Schedule 3: Stationary Energy – Importing and mining coal or natural gas” or “Registration and Election form: Persons as participants in a consolidated group” (if you would like to be treated as a consolidated group for the purposes of the NZ ETS). Section 157 relating to “Unincorporated Bodies” does not apply.

If no permit is required to carry out the mining, then the owner of the mine will be treated as the participant.

As part of registering as a participant who mines coal or natural gas you will be required to provide for each permit held: the permit number; operation/mine/gas field name; % holding of permit; and the expiry date of the permit.

(c) Do you carry out these activities on your own?

If you carry out any of these activities on your own and cannot, or do not want to give notice of an election to form a consolidated group at the same time that you notify the EPA that you are a participant then you must use the relevant “Participant Notification Form”. The following Participant Notification Forms based on the sector and nature of activities are available:

Form type	Schedule Reference	Activity
Participant Notification Form	Part 2 of Schedule 3	Liquid Fossil Fuels – Owning Obligation Fuel
Participant Application Form	Part 3 of Schedule 4	Liquid Fossil Fuels – Purchasing Obligation Jet Fuel
Participant Notification Form	Part 3 of Schedule 3	Stationary Energy – Importing and Mining Coal or Natural Gas
Participant Notification Form	Part 3 of Schedule 3	Stationary Energy: Using Geothermal Fluid, or Combusting Used Oil, Waste Oil, Used Tyres or Waste, or Refining Petroleum
Participant Application Form	Part 4 of Schedule 4	Stationary Energy Purchasing Coal; or Natural Gas
Participant Notification Form	Part 4, Subpart 1 of Schedule 3	Industrial Processes, producing: Iron or Steel Aluminium Clinker, or Burnt Lime Glass Gold
Registration - Persons carrying out joint activities	All	For all joint activities
Registration and Election - Persons as participants in a consolidated group	All	For all group activities

(d) Do you carry out any of these activities as a member of a Group and wish to be treated as a member of a Consolidated Group?

When registering as participants, companies that are in a "Group" (a Group means a reporting entity and its subsidiaries as defined by section 2(1) of the Financial Reporting Act 1993) can elect to be treated as a consolidated group by giving notice to the EPA. This allows these members to consolidate their emissions reporting and surrender obligations (or receive unit entitlements) for the purposes of the NZ ETS.

Key requirements of consolidated groups:

Participant members must be members of a Group. A Group means a reporting entity and its subsidiaries.
A consolidated group must have at least two participant members.
Participant members are registered in their own right on the Participant Register and elect to form a consolidated group.
A nominated entity acts as an agent for the consolidated group. It is responsible for filing a single emissions return covering the multiple activities that are carried out by participant members.
The nominated entity must have a Holding Account for the consolidated group. The Holding Account will also record the
names of all the members of the consolidated group.
A consolidated group may, in addition to the participants who are members of the Group, include a member of the Group that is not a participant, if that entity is to act as the nominated entity. Alternatively, one of the participant members can also act as the nominated entity.
Every member of the consolidated group, including the nominated entity agrees to be jointly and severally liable for any obligations or entitlements under the NZ ETS.

Notice to form a consolidated group

Two options are available for giving notice to the EPA in respect to forming a consolidated group.

(i) Give notice to form a consolidated group at the same time as you register as a participant

Members of a Group can give notice of their election to form a consolidated group at the same time that they notify the EPA that they register as a participant by using the “Registration and Election form: Persons as participants in a consolidated group”. If this is the case, then the individual members of the Group are not required to open a holding account in the New Zealand Emission Unit Register in their own name, as long as the nominated entity has opened or has applied to open a holding account for the consolidated group. The consolidated group will be able to start accounting for their emissions as a group from the 1 January 2010. Each participant member will still be recorded on the participant register in their own right.

(ii) Give notice to form a consolidated group at a later date

Alternatively, the election to form a consolidated group can be made at a later date. In this case, each member of a Group will have to register individually as a participant and open an account in their own name. The date the consolidated group can start accounting for their emissions as a group will depend on the date that the notice is received by the EPA. If the notice is received:

before 30 September, then the election takes effect on 1 January of that year
after 30 September, then the election takes effect on 1 January of the following year.

Agreement to joint and several liability

Every member of the consolidated group, including the nominated entity, must agree to:

be jointly and severally liable with other members of the consolidated group for any obligations under Parts 4 and 5 of the Climate Change Response Act 2002 in respect of emissions and removals resulting from the activities specified by any member.
the transfer of any units to the consolidated group’s Holding Account to which any member of the
consolidated group may become entitled to in relation to that member’s removal activities.

This agreement will be contained in the notice to form a consolidated group.

What do I have to do to Register as a SE, IP or LFF Mandatory Participant?

(1) Register as an NZ ETS participant and open a holding account from the New Zealand Emission Unit Register.

To take part in the NZ ETS, each participant must have a Holding Account in the New Zealand Emission Unit Register (NZEUR). This Holding Account is your Participant Holding Account for the purposes of:

Receiving emission units either as an entitlement from the Crown or as a result of private emissions trading
Surrendering emission units from the holding account to meet a participant obligation under the NZ ETS

A participant involved in more than one activity can use a single Holding Account for all of their activities.
If you do not already have a Holding Account, becoming a Registered User is the first step to opening a Holding Account. Registered Users have approved access rights to the NZEUR (that is, username and password). Apply at www.eur.govt.nz to become a Registered User.
Applications to be approved as a Registered User of the NZEUR will normally be processed within two business days.
Once the NZEUR Registrar approves your user registration, you can then proceed with opening a Holding Account at www.eur.govt.nz. On submitting your online application, you will be provided the account number for the pending Holding Account.
You must include this Holding Account number in your NZ ETS application for registering as a participant in the NZ ETS.
The last step is to complete the Account Holder Declaration form, which contains certain declarations that are required to be made by Account Holders under the Climate Change (Unit Register) Regulations 2008. When you submit your online application to open a Holding Account, you will receive an email from the NZEUR containing this form. This form must be signed by each and every Account Holder for that Holding Account, and returned to the NZEUR Registrar. Once the NZEUR Registrar is satisfied that you have met all of the account opening requirements (including providing any additional information such as identification documents) your Holding Account will be opened.
An email will be sent by the NZEUR Registrar to each Primary Representative’s email address advising them that the Holding Account has been opened.
It is recommended that you contact the administering agency for more information on the requirements of opening a Holding Account for consolidated groups under the NZ ETS or if you have any questions about the Holding Account application process. Please call 0800 CLIMATE (254 628).

(2) Register in the NZ ETS by completing the notification process to the EPA.

All mandatory participants in the SEIP and LFF sectors must notify the EPA within 20 working days of carrying out any of the previously listed activities.
It is important that you complete your notification by this date as it is an offence under the Act if you fail to do so. Please contact us if you are unable to meet this date.
The EPA has prescribed forms to enable you to complete this notification. These forms are available at www.eur.govt.nz and require you to provide such information as:

the full legal name of the person who is required to be registered as a participant
the participants holding account number in the NZEUR
description of the activities that are being registered in the NZ ETS
contact details for notices issued by the EPA
signature of a company director or executive officer (or equivalent for other incorporated bodies)

A participant will be notified that they have been entered in (or removed) from the Participant Register.
Participants in the NZ ETS will be entered into a publicly available Participant Register. The Register shows:

the participant’s name
the ETS-related activity they undertake, and
for voluntary participants, the date that its registration as a participant will take effect

If you are unsure as to any of the requirements or which form to use please contact 0800 CLIMATE (254 628).

What do I have to do to Register as a SE or LFF Voluntary Participant?

Voluntary participants must also have a Holding Account in the NZEUR. Please refer to paragraphs 1 to 7 of Step (1) above for requirements.
Voluntary participants can register at any time to participate in the NZ ETS by completing the relevant Participant Application Form. After registering as a participant, NZ ETS obligations become mandatory.
For voluntary participants in the SE sector, your registration takes effect 12 months after the date the EPA notifies you that you have been entered on the Participant Register.
For voluntary participants in the LFF sector your registration takes effect 12 months after the date the EPA notifies you that you have been entered on the Participant Register.

Important Note: Voluntary participants are released from their obligations four years after they are deregistered.

The EPA notifies you when your participant registration has been completed. The EPA, at the same time, notifies mandatory participants in the SE and LFF sectors that you have registered as a participant.

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.