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Talking points for Cabinet paper Progressing
updates to industrial allocation in the emissions
trading scheme
1. Attached to this aide memoire are talking points for the Cabinet paper
Progressing
updates to industrial allocation in the emissions trading scheme.
2. The Cabinet paper has two parts. The first seeks Cabinet approval for you to make
decisions and issue drafting instructions on updates to rates of industrial allocation in
Emissions Trading Scheme regulations.
3. The second part relates to NZ Steel’s use of cogenerated electricity. You are seeking
Cabinet’s decision on how this is counted under industrial allocation.
4. The Cabinet paper provides three options in relation when your recommended changes
come into effect:
i.
All allocative baseline updates come into force from 1 January 2024 including for
the NZ Steel cogeneration change
ii.
The allocative baseline updates come into force from 1 January 2024, but the NZ
Steel cogeneration change comes into force from 1 January 2025
iii. All allocative baseline updates come into force from 1 January 2025 including for the
NZ Steel cogeneration change
5. The talking points expand on the pros and cons of each option. The talking points also
give more information on previous communications and firm-by-firm impacts.
6. Following Cabinet decisions, we will seek your approval to final decisions and issuance of
drafting instructions for updates to allocative baselines and industrial allocation activity
descriptions, as delegated by the Cabinet paper. We will also seek your approval for
proactive release of the Cabinet paper.
7. The final step wil be presentation of the amendment regulations to Cabinet’s Legislation
Committee in November.
Signatures
Mark Vink
Hon Simon WATTS
General Manager, Markets
Minister of Climate Change
23 September 2024
Date
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Appendix 3: Indicative impacts on firms
Impacted firm
Financial
impact
($m)
9(2)(b)(ii)
Note: The table excludes 67 firms who are impacted by less than $100,000 (i.e. would
appear as $0.0 in the column).
Note: Assumes $60 per emission unit and 2024 production is the same as 2023
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