Industries that are emissions intensive and trade exposed (EITE) can seek financial assistance for loss of their competitiveness in international markets or face domestic competition from international products.
Transitional assistance will only apply to specifically defined activities of the business. This means that eligible businesses will need to understand the emissions profile and financial metrics associated with distinct parts of their operations.
Emissions monitoring and reporting has not historically been the domain of the finance department. Robust information flows between the monitoring and finance teams will be imperative.
New Zealand Emissions Intensive And Trade Exposed Industries
The amount of allocations available will depend on the emissions intensity of specific activities and whether they are deemed "moderately emissions intensive" or "highly emissions intensive".
Moderately Emissions Intensive Activities - A moderately emissions intensive activity emits between 800 tonnes of CO2-e per 1 million New Zealand dollars of revenue and 1600 tonnes of CO2-e per 1 million New Zealand dollars of revenue. These activities will initially receive assistance at the rate of 60 per cent of the relevant allocative baseline.*
Highly Emissions Intensive Activities - A highly emissions-intensive activity emits more than 1600 tonnes of CO2-e per 1 million New Zealand dollars of revenue. These activities will initially receive assistance at the rate of 90 per cent of the relevant allocative baseline.*
Allocations will be gradually phased out after the transitional period ends (January 1, 2013).
The Ministry for Economic Development has undertaken a preliminary analysis that suggests firms in the following industries may be eligible for assistance:
- food, beverage, and tobacco
- non metallic mineral products
- petroleum, coal, and chemical manufacturing
- machinery and equipment manufacturing
- aluminium drawing, rolling, and extruding
- basic iron and steel manufacturing
Further information including specifics on effected industries and tests to determine if an organisation is emissions intensive or trade exposed is available here.
* Development of Industrial Allocation Regulations under the New Zealand Emissions Trading Scheme Consultation Document - Ministry for the Environment