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Changing the surrender/repayment penalty for small forestry participants in the New Zealand Emissions Trading Scheme

Have your say

In the New Zealand Emissions Trading Scheme (ETS), a penalty applies if a participant (such as a forester) fails to surrender or repay New Zealand Units (NZUs or "units") to the Crown by the due date.

Read more about penalties and the New Zealand ETS

Compliance in the ETS – Environmental Protection Authority

There is a risk that serious financial hardship could result from these penalties for foresters with small liabilities. We are proposing alternatives which reduce this risk while still encouraging people to meet their obligations. We want your feedback on these options to make sure the penalty will work in practice.

Submissions open on 2 August and close at 5pm on 30 August 2022.

We will hold 2 webinars which you can attend to discuss these options. 

Consultation documents

Discussion document: Changing the surrender/repayment penalty for small forestry participants in the New Zealand Emissions Trading Scheme [PDF, 1.3 MB]

Interim regulatory impact statement: Consultation on options to amend the surrender/repayment penalty for small forestry participants in the New Zealand ETS [PDF, 838 KB]

What's being proposed?

The New Zealand ETS compliance and penalty regime is intended to encourage participants to comply with the rules of the scheme. A surrender/repayment penalty applies when participants fail to surrender or repay units by the due date. This is a cash penalty set at 3 times the price of carbon (set in Regulations) for each overdue unit. This penalty took effect on 1 January 2021 but was deferred for small foresters to avoid a risk of serious financial hardship while new options were developed.

In the short term, we are proposing to extend the deferral to allow time to educate participants and develop a new penalty. To reduce the risk of serious financial hardship for small foresters, MPI and the Ministry for the Environment are consulting on 2 alternative options for the surrender/repayment penalty:

  • A strict liability penalty which would consist of a cash penalty based on the price of carbon (set in Regulations) and the volume of the overdue units. The penalty would not apply if the participant can prove total absence of fault.
  • A discretionary penalty which would involve a cash penalty set at the price of carbon (set in Regulations). The Environmental Protection Authority (the Regulator) would have discretion to reduce the penalty based on the participant’s culpability.

The discussion document provides information on these 2 options.

Making your submission

Send us your submission by 5pm on Tuesday, 30 August 2022. Our preference is for you to make a submission electronically – either by completing the online form or by email. However, we will also accept written submissions sent by post.

Online submission form

Online submission form – Alchemer

By email

If you are sending us a submission by email, we encourage you to use the submission template which has the same questions as the online form:

Submission template [DOCX, 81 KB]

When you have completed your submission, email it to

By post

If you prefer to make your submission in writing, send it to:

NZ ETS Small Foresters Surrender/Repayment Penalty Consultation
Operational policy – Forestry incentives
Te Uru Rākau – New Zealand Forest Service
PO Box 2526
Wellington 6140
New Zealand.

Make sure you tell us in your submission:

  • the title of the consultation document: "Changing the surrender/repayment penalty for small forestry participants in the New Zealand ETS"
  • your name and title
  • your organisation's name (if you are submitting on behalf of an organisation, and whether your submission represents the whole organisation or a section of it)
  • your contact details (such as phone number, address, and email).

Submissions are public information

Note that any submission you make becomes public information. People can ask for copies of submissions under the Official Information Act 1982 (OIA). The OIA says we have to make submissions available unless we have a good reason for withholding it.  That is explained in sections 6 and 9 of the OIA.

Tell us if you think there are grounds to withhold specific information in your submission. Reasons might include that it's commercially sensitive or it's personal information. However, any decision MPI makes to withhold information can be reviewed by the Ombudsman, who may tell us to release it.

MPI may post all or parts of any written submission on its website. We will consider that you have consented to its publication, unless clearly stated otherwise in your submission. We cannot reply to individual submitters.

Next Steps

After this consultation we will make final recommendations on the proposed options based on your submissions.