The Environmental Protection Authority (EPA) has confirmed that AAUs will be cancelled at some point in 2016, and that holders of NZ AAUs will receive replacement NZUs at a rate of one NZU for every one NZ AAU after the cancellation.

The EPA has also confirmed that NZUs replacing AAUs from Permanent Forest Sink Initiative forests will be marked as PFSI NZUs in the NZ EUR registry.

Read more at the EPA website here.

​​Official documents recently released by the Environmental Protection Authority to Carbon Forest Services reveal that 96.3 million ERUs have been used to meet surrender obligations in the NZ Emissions Trading Scheme since it started. Of this 95.3 million ERUs originated from Ukraine and Russia.

​The use of so many ERUs from Russia and Ukraine has serious implications for the NZ ETS and adds to ongoing concerns that the scheme has been a failure in achieving real greenhouse gas reductions.

The Stockholme Environment Institute study claims 73% of ERUs from mainly Russia and Ukraine are questionable and may not be linked to any real emission cuts. Many of these units are likely to have ended up in New Zealand. Since 2012 at least 70% of units surrendered in the NZ ETS have been ERUs.
Read more about the Stockholme report at Carbon Pulse.

Government figures just released show 4.5 million NZUs were gifted to industry in 2014, valued at $30.6m at the current carbon price of $6.80. During the same period 97% units surrendered under the ETS were overseas Kyoto units at an average price of 10 cents. The total given to 'trade exposed' industry since 2010 stands at 14.1 million, valued at $95.9m. Read more at Radio NZ.

CFS talks to Carbon Pulse about implications of Kyoto cancellation process on holders of overseas Kyoto Units. 

Read more at Carbon Pulse here: http://carbon-pulse.com

MPI is seeking feedback on a range of proposed changes to the Permanent Forest Sink Initiative (PFSI) they hope will improve administrative efficiency, lower the cost of participation, enhance permanence, and increase economic returns to participants, with the overall goal of increasing an uptake of participation in the scheme.

The last two months has seen NZUs break through the $7 level for the first time since May 2012.

Yesterday NZUs close at around $6.90 after reaching earlier $7 earlier in the day. This is an increase of 35% in price for the same time last year. Most of this lift can be attributed to a lack of liquidity at low prices coupled with the prohibition of international credits in the NZ ETS which came into effect in June.

After a hurried and much criticised public consultation the Government has tabled New Zealand's 2030 emissions target in preparation for the UNFCCC meetings to be held later this year in Paris, where countries intend to establish the framework for the next international climate change agreement.

At first glance the Government's 30% reduction target appears to align with the majority of submitters who urged in the consultation for ambitious cuts of up to 40% below 1990 levels to prevent dangerous climate change. However, the baseline year for the 30% reduction is 2005, which equates to a target of only reducing emissions to 11% below 1990 levels.

The Government has released a statement on developing a supply and management strategy for NZUs including possible auctioning of NZUs in the ETS. The announcement has few details and is focused on suppy issues rather than demand. However it does clarify that auctioning is a medium-long term option and will take at least 18 months to develop. This should alleviate fear from forest owners that Government could intervene in the short term to bolster supply of NZUs and drive prices lower.


Read the Ministry for Environment statement here.