New Zealand’s revamped carbon market starts trading

Enhanced system covers half of the country’s emissions to support its climate ambitions

New Zealand held its first auction of emissions allowances this week, heralding a major revamp of its carbon market and putting a hard cap on greenhouse gas pollution for the first time. Launched in 2008, New Zealand’s emissions trading system (ETS) did not initially have a binding cap but merely required emitters to buy any allowances they needed in excess of  free allocations issued every year. The government carried out consultations over possible reforms in 2015, which led to significant changes that took effect at the start of this year. The regulator has set an overall cap on the emissions covered by its ETS of an average 40mn t/yr from 2021 to 2025 New Zealand’s upgraded marke