Emissions Reduction Plan

New Zealand is on the path to a low emissions, climate resilient future. Government has set into law a target for net zero greenhouse gas emissions by 2050 (other than for biogenic methane). The Emissions Reduction Plan is one mechanism we are using to focus our collective efforts toward transitioning to a more resilient, low emissions economy.

The Emissions Reduction Plan will set out policies and strategies to decarbonise every sector of the economy, including the Energy and Industry sectors.

Why is Government setting Emissions Budgets and an Emissions Reduction Plan?

New Zealand has committed to both international and domestic emissions reduction targets.

Greenhouse gas emissions targets and reporting(external link) — Ministry for the Environment

The Climate Change Response Act 2002 requires the Climate Change Commission to provide recommendations to Government on emissions budgets. An emissions budget is a total quantity of emissions that is allowed during an emissions budget period. Emissions budgets will operate as ‘stepping stones’ that keep us on track to meeting our long-term emissions reductions targets. Each emissions budget covers a period of 5 years (except for the first emissions budget which will cover the period 2022 – 2025).

The Climate Change Commission has released its final advice on the first 3 emissions budgets and on policy direction for the Government’s first emissions reduction plan.

Ināia tonu nei: a low emissions future for Aotearoa(external link) — Climate Change Commission

Government will need to consider the Commission’s advice before setting the first 3 emissions budgets and publishing an Emissions Reduction Plan, setting out policies and strategies to meet the first budget, by 31 May 2022, following the process set out in legislation.

Climate Change Response Act 2002(external link) — New Zealand Legislation

The Emissions Reduction Plan will include sector specific policies, a multi-sector strategy to meet emissions budgets and a strategy to address distributional impacts across different communities.

Visit the climate change work programme page for more information on the Emissions Reduction Plan.

About New Zealand’s climate change programme(external link) — Ministry for the Environment

What are the Energy and Industry sectors?

The range of activities included in the Energy and Industry (E&I) chapter of the Emissions Reduction Plan are extremely diverse. Formally, this sector covers emissions from three areas:

  • Combustion of fuels such as coal and gas for electricity generation and industrial heat
  • Fugitive emissions, for example from gas production and geothermal fields
  • Industrial processes (such as production of cement, steel and aluminium)

Our work on this area of the Emissions Reduction Plan asks us to consider everything from the manufacturing, construction and electricity sector through to emissions related to natural gas treatment plants, geothermal fields, and the production of necessary materials like steel, cement, aluminium and glass.

Whilst the E&I sectors play an important role in the New Zealand economy they also have a significant emissions profile. In 2019, emissions from the energy and industry sectors made up 26 per cent of New Zealand’s total gross GHG emissions. It’s fair to say that transition in these sectors will take a lot of effort from a range of different players in the energy ecosystem.

What will the Energy & Industry component of the Emissions Reduction Plan contain?

The Emissions Reduction Plan will reflect current and future work that will contribute to achieving emissions reductions over the first emissions budget period, and will set a direction for emissions reductions in the second and third budget period. It will take into account recommendations made by the Climate Change Commission.

We are also progressing initiatives that will help address the distributional impacts of decarbonisation, so that we can ensure an equitable transition for New Zealanders.

The New Zealand Emissions Trading Sceme (NZ ETS) is a key mechanism to drive emissions reductions in the Energy and Industry sectors. A rising carbon price creates an incentive to reduce fossil fuel use through energy efficiency improvements and fuel switching opportunities. The Energy and Industry part of the plan will set out other measures in the E&I sectors that are complementary to the NZ ETS, and aim to drive emissions reductions in areas that are not responsive to emissions pricing due to market or other barriers, to unlock co-benefits, and to address the distributional impacts of the transition.

Read more about the New Zealand Emissions Trading Scheme at the Ministry for the Environment webpage.

New Zealand Emissions Trading Scheme(external link) – Ministry for the Environment

Government already has a significant work programme underway focused on reducing emissions in the energy and industry sectors

Work already underway in the E&I sectors includes:

We are reviewing the National Policy Statement for Renewable Electricity Generation and other national direction instruments.

Learn more about the Government’s Resource Management Act reform at the Ministry for the Environment webpage.

Resource Management Act reform(external link) — Ministry for the Environment

The Gas Industry Company is investigating the role of gas in supporting the energy transition and the fitness of current market, commercial and regulatory settings.

Read more on the Gas Industry Company work on their website.

Gas Market Settings Investigation Paper(external link) – Gas Industry Company

Additionally, Government is developing additional measures to reduce emissions in the energy and industry sectors and support the transition – you can find out more by following the links below.

Next steps in the development of the Emissions Reduction Plan: Energy and Industry

We are currently developing the energy and industry component of the emissions reduction plan, which will draw together complementary measures in the E&I sectors, and consider the recommendations made by the Climate Change Commission which relate to these sectors. This chapter will form part of the wider Emissions Reduction Plan for 2022-2025.

Consultation Opportunities

Consultation on complementary policies

The Energy and Industry chapter of the first Emissions Reduction Plan will consist of some policies currently being developed – consultation was recently held for the following complementary policies:

The Electricity Authority also recently sought feedback on a range of regulatory options that may be needed for distribution networks to support New Zealand’s transition to a low emissions economy.

Read more about the Electricity Authority’s work programme on their website.

Evolving technologies and business models(external link) — Electricity Authority

Consultation on Emissions Reduction Plan as a whole

You can view the discussion document, Te hau mārohi ki anamata – Transitioning to a low-emissions and climate-resilient future at the Ministry for the Environment website.

Transitioning to a low-emissions and climate-resilient future: emissions reduction plan discussion document(external link) — Ministry for the Environment

The Ministry for the Environment is the lead agency responsible for co-ordinating the Emissions Reduction Plan, and as such submissions should be made through the Ministry for the Environment submissions portal.

Have your say and shape the Emissions Reduction Plan(external link) — Ministry for the Environment

A formal consultation period on the whole ERP will take place from Wednesday 13 October 2021 to Wednesday 24 November 2021. This will occur online and involve a series of webinars and stakeholder events.

You can find out more information about consultation opportunities at the Ministry for the Environment webpage.

Climate Change Engagement(external link) — Ministry for the Environment

How to get in touch

If you wish to contact the Ministry for the Environment you can do so by emailing climateconsultation2021@mfe.govt.nz.

If you have any Energy and Industry specific questions, you can contact us at energytransition@mbie.govt.nz.