New Zealand Climate Change Minister Unveils Carbon Removals Framework and Legislative Enhancements

Climate Change Minister Simon Watts has released a new Assessment Framework for Carbon Removals, alongside a range of improvements to New Zealand’s climate change legislation.

The Carbon Removals Assessment Framework is a crucial step toward recognising and rewarding non-forestry carbon removals in New Zealand, unlocking new opportunities for landholders and businesses, Mr Watts says.

This new framework delivers a priority action from the second Emissions Reduction Plan, showcasing the Government’s commitment to climate action that grows the economy and supporting emissions reductions. It also delivers an election promise to investigate biodiversity credits to reward the creation of new wetlands, recognising their enormous potential.

We have been clear on the important role that nature-based solutions and credible markets play in our climate response, Mr Watts says.

The framework will support any landholder, project owner, or group interested in accessing a carbon market, to understand whether their project or activity has the environmental and scientific rigour needed to enter those markets.

Forestry is already a critical part of our climate response, but we also want to enable businesses and organisations to explore other ways to reduce emissions. We are progressing work to help farmers and landholders access pathways for recognition and reward for activities that remove carbon from the atmosphere on farm, including opportunities around rewetting peatlands.

Alongside the Framework, the Government is making targeted changes to the Climate Change Response Act (CCRA) to ensure it is working efficiently and as intended.

New Zealand’s climate change system can be unnecessarily complex and duplicative in parts, which creates high compliance costs and slows effective action, Mr Watts says.

We have been clear in our commitment to look into the CCRA to see where we can make improvements.

Key changes to the CCRA include: Removing or fixing unnecessary, complex or duplicative requirements in the Climate Change Response Act. This includes removing the need for the Climate Change Commission to provide advice on policy direction prior to an emissions reduction plan being developed by the Government and removing duplicative consultation requirements, for both the Commission and the Government.

Improving functions of the NZ ETS, including: amendments to Industrial Allocation settings to provide more certainty for the market and reduce disincentives to invest in decarbonisation projects changing the annual ETS settings process to a biennial one.

removing the requirement for ETS Settings to accord with Nationally Determined Contributions Expanding opportunities for other types of carbon removals to be recognised in the NZ ETS in the future.

Other technical updates to make it easier for stakeholders to comply with the requirements of the CCRA.

These proposed changes will reduce costs to government and business and provide greater certainty, enabling us to make meaningful reductions more efficiently. They do not lower our ambition, Mr Watts says.

The Government intends to introduce an amendment bill to the Climate Change Response Act to make these changes next year.

The Government has also decided to change the neutrality goal for the Carbon Neutral Government Programme from 2025 to 2050.

This change acknowledges that the original 2025 deadline was too soon for organisations to reduce their emissions enough to meet carbon neutrality, Mr Watts says.

The new deadline also aligns with New Zealand’s broader, legislated 2050 net zero target.

Additional detail on the changes being made and the Assessment Framework for Carbon Removals can be found on the Ministry for the Environment’s website https://environment.govt.nz/publications/assessment-framework-for-carbon-removals/.