Introduced in House Passed House Introduced in Senate Passed Senate Became Law
05/04/2020        

Climate Change Response (Emissions Trading Reform) Amendment Bill

This bill amends the Climate Change Response Act 2002 to improve certainty for businesses, make the New Zealand Emissions Trading Scheme more accessible, and improve its administration.

Date Version PDF TXT
05/04/2020 Draft Open
10/24/2019 Draft Open

            Climate Change Response (Emissions Trading Reform)
Amendment Bill

Government Bill

As reported from the Environment Committee

Commentary

Recommendation
The Environment Committee has examined the Climate Change Response (Emissions
Trading Reform) Amendment Bill and Supplementary Order Paper No 413. The com-
mittee recommends (by majority) that the bill be passed with the amendments shown.

Introduction
The New Zealand Emissions Trading Scheme (NZ ETS) was established in 2008,
through amendments to the Climate Change Response Act 2002. This bill and sup-
plementary order paper (SOP) would reform the NZ ETS by further amending the
Climate Change Response Act.
The bill and SOP would:
• update the purpose of the Climate Change Response Act to include the Paris

Agreement, and remove redundant references to the Kyoto Protocol
• enable a cap to be placed on emissions covered by the NZ ETS
• provide for a cost containment reserve, rather than a fixed price option, to

allow the Government to manage the supply of units in the NZ ETS
• improve the process for the auctioning of units in the NZ ETS
• allow for the phase-down of industrial allocation from 2021, with greater

reductions from 2030
• strengthen the compliance regime by introducing new infringement offences

for low-level offending, restructuring the excess emissions penalty system, and
making information about significant non-compliance publicly available

186—2



• make more data publicly available about the emissions and removals of indi-
vidual businesses

• make a number of operational and technical improvements to the NZ ETS, par-
ticularly in the way it relates to forests

• introduce averaging accounting to the NZ ETS for post-1989 forests
• introduce a new “permanent forestry” activity into the NZ ETS, and disestab-

lish the existing Permanent Forest Sink Initiative (PFSI) from the Forests Act
1949

• give effect to decisions to price agricultural livestock emissions at farm level,
and fertiliser emissions at processor level, from 2025, and provide a fall-back
option if there is insufficient progress on an alternative pricing mechanism by
2022.

Proposed amendments
This commentary covers the main amendments we recommend (by majority) to the
bill as introduced. They include:
• introducing activity-specific reduction of the general phase-out rate
• enabling more data collection
• improving options for the backing of units
• taking into consideration future emissions budgets and targets
• clarifying the membership of the Climate Change Commission, and its report-

ing on industrial allocation
• introducing advance notice of publication of emissions data
• providing the possibility of voluntary reporting for agriculture before reporting

became mandatory
• providing the possibility of voluntary participation for farm-level agriculture
• changing the commencement of many of the forestry-related policy changes
• extending the timeframe for participants to opt in to averaging accounting,

before averaging becomes mandatory for post-1989 forests
• clarifying the penalties for permanent forestry non-compliance
• improving the design of the pre-1990 offsetting regime
• clarifying the rules and liabilities for transmissions of interest.
We do not discuss all minor, technical, or consequential amendments that are pro-
posed.

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Updating the purpose of the Act to include domestic emissions
targets and budgets
Clause 7 of the bill would amend section 3 of the Act. It would update the Act’s pur-
pose to include supporting New Zealand’s international obligations under the Paris
Agreement. The Paris Agreement would be included in Schedule 2A of the Act.
We recommend amending clause 7 so that the purpose of the Act in section 3 includes
assisting New Zealand to meet its 2050 target and emissions budgets, as set pursuant
to the Act.
This would involve consequentially repealing existing parts of the purpose statement
in section 3 that refer to reducing New Zealand’s net emissions of greenhouse gases
to below business-as-usual levels.

Clarifying some matters following the Climate Change Response
(Zero Carbon) Amendment Act 2019
This bill was introduced to the House before the passing of the Climate Change
Response (Zero Carbon) Amendment Act 2019 (Zero Carbon Act). As a consequence
of that Act, we propose some changes to this bill.
First, we recommend amending section 5D to provide that the membership of the Cli-
mate Change Commission would comprise a chairperson, deputy chairperson, and
between three and seven other members (new clause 10A).
Sections 5ZG and 5ZI of the Act set out the process for the Minister to prepare and
make emissions reduction plans publicly available. The Minister must make a plan
publicly available 12 months before a period commences. We recommend amending
section 5ZI to allow, for the first emissions budget period, the first emissions reduc-
tion plan to be published at any time before the first period commences. We recom-
mend inserting clause 10E accordingly.
We recommend inserting clause 10F to require the Climate Change Commission’s
report at the end of an emissions budget period to relate to the emissions budget
period just completed. Our change would amend section 5ZL of the Act.
Under the bill’s proposed new section 84D (inserted by clause 77), the Climate
Change Commission would be required to provide reports on the phase-out of indus-
trial allocation. Those reports would need to be tabled in the House within 16 weeks
after the end of an emissions budget period. We recommend amending the bill to
instead provide that the general process for tabling and publishing the Commission’s
reports would apply to its advice on regulations setting the phase-out rates for indus-
trial allocation. The general process, as amended by the Zero Carbon Act, would
require the reports to be tabled and published within 10 working days after being pro-
vided to the Minister. This process is set out in section 5L of the Act. We recommend
inserting clause 10G, new section 5ZOB, to reflect this change.
To clarify, if a Minister were to make decisions that deviate from the recommenda-
tions in the Commission’s report, the bill would require the Minister to present a

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report to the House (within 16 weeks of receiving the Commission’s report) setting
out the reasons for the deviation. We propose that these provisions be moved to new
clause 77 of the bill, new sections 84C(4) and (5).

Treaty of Waitangi
Section 3A of the Act sets out the Crown’s responsibilities to give effect to the prin-
ciples of the Treaty of Waitangi.
As mentioned, this bill was introduced to the House before the passing of the Zero
Carbon Act. The Zero Carbon Act inserted paragraphs (ab), (ac), (ad), and (ae) into
section 3A of the Act.
As introduced, clause 8 of the bill would amend section 3A of the Act, and the para-
graphs referred to above would be repealed. This was unintentional.
We recommend amending clause 8 of the bill so that these provisions are not repealed
from the Act.

Managing unit supply and price controls
The bill would introduce a limit on the supply of New Zealand units (NZUs) in the
NZ ETS. This would enable a cap to be placed on total emissions allowed within the
NZ ETS. NZUs could be sold through auctions, which would result in a dynamic
emissions price. Unit supply would be announced on a rolling five-year basis.
There would also be price controls within the NZ ETS. The Government would have
mechanisms to manage unacceptably low or high prices. For maximum prices, there
is currently a $25 fixed price option for NZUs. The bill would replace this with a cost
containment reserve, which would provide the Government with reserve units it could
auction if the trigger price was reached.

Regulations for auctions to sell NZUs
Clause 41 would insert new section 30GA to update the provisions that allow for
regulations to enable the sale of NZUs by auction. Regulations made under the new
section would need to prescribe relevant matters, such as the timing, schedule, format,
and rules for running auctions.
Clause 12 of the bill would amend section 6A of the Act to clarify the powers for the
Minister for Climate Change to sell NZUs by auction under new section 30GA.
Clause 13 would amend section 7 of the Act to allow the Minister of Finance to direct
the Registrar to transfer NZUs between holding accounts in certain circumstances
(including for auctioning).
The majority of us think that also allowing the Minister for Climate Change to direct
the transfer of units to holding accounts for auctioning purposes would improve the
workability of the new auction system.

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Therefore, we recommend amending clause 12 to enable the Minister for Climate
Change to direct the Registrar to transfer any units to any holding account in the
registry for the purpose of selling any units by auction.

Enabling a cap on emissions covered by the scheme
The bill would introduce a decision-making framework to enable the supply of units
to be restricted, thus capping allowable emissions under the NZ ETS.
As mentioned above, new section 30GA would enable the Minister to make regula-
tions for the auction of units.
Clause 41 of the bill would also insert new section 30GB into the Act. This would
require the Minister, if making such regulations, to also make regulations prescribing
an overall limit on the supply of units. This limit would have the effect of setting the
cap on emissions under the scheme.
Under new section 30GB(2)(b)(ii), quantities of units that are allocated for free can-
not be restricted.
In the bill as introduced, any units sold through the cost containment reserve would
need to be backed by matching emission reductions, whereas industrial allocation
units exceeding the cap would not.
The majority of us think that the obligation under section 30IA to obtain equivalent
emission reductions to back cost containment reserve units should also apply to any
free allocation that exceeds the cap in an emissions budget. We recommend amending
new sections 30IA and 30GB accordingly.

Requirements for decisions on annual unit supply and price controls
The Minister would be required to consider a range of matters when making decisions
each year on settings for unit supply and the price controls.

Considering the effects on future budgets and the 2050 target
New section 30GC(2) would require the Minister to be satisfied that their decisions
accord with the relevant emissions budget and with New Zealand’s commitment
under the Paris Agreement, although there is some discretion.
New section 30GC(2) is not intended to limit the Minister’s consideration to only the
current emissions budget and the nationally determined contribution under the Paris
Agreement. If it were, this could lead to short-term decision-making that slows down
long-term emissions reductions.
We recommend that new section 30GC(2) be amended to specifically include the con-
sideration of future emissions budgets set under the Act, as well as the 2050 target set
under the Act.

Changing “carbon price path” to “emissions price path”
New section 30GC(5) would set out the “main matters” the Minister must consider
when making certain decisions under new section 30GB.

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As introduced, new section 30GC(5)(e) refers to “carbon price path”. We recommend
changing this term to refer to “emissions price path” to ensure that the Climate
Change Commission’s advice is not constrained in respect of the other greenhouse
gases. We recommend that the wording throughout the bill be amended accordingly.
For example, this is relevant to our proposed new section 5ZOA.

Backing auction reserve amounts with emissions reductions or removals
Under clause 44, new section 30IA, if the cost containment reserve were triggered,
the Minister would be required to obtain emissions reductions to match any reserve
units sold at auction. New section 30IA would require the Minister to ensure that
greenhouse gas emissions are reduced, or removals are increased, by 1 tonne for each
NZU sold as a reserve unit. The Minister would be required to “back” the units in
such a way as soon as reasonably practicable after the end of the emissions budget
period.
We recommend the following amendments:
• As we discussed earlier, we recommend requiring any units allocated for free

that result in the cap being exceeded to also be backed by equivalent emissions
reductions or removals, in the same manner as reserve units. We recommend
amending new subsection (1) accordingly.

• The majority of us think that the Minister should be allowed to “back” reserve
units sold through the cost containment reserve before the end of the budget
period if desired, not just after the end of the emissions budget period. This
would increase flexibility and allow better access to overseas carbon markets.
We recommend amending new subsection (3) accordingly.

• The majority of us think that reserve units auctioned through the cost contain-
ment reserve or units freely allocated should be “backed” only where they
exceed the emissions budget. This would help preserve the net emissions
budget while avoiding unnecessary cost for the Crown. We recommend amend-
ing subsection (1) accordingly.

• We recommend making it clear that the emissions reductions or removals
required to back the reserve can be obtained from outside the NZ ETS. We rec-
ommend amending subsection (2) accordingly.

Phase-out of industrial allocation
The bill would provide for the phasing out of industrial allocation. Industrial alloca-
tion was intended as a transitional measure in the NZ ETS, as the risk of “emissions
leakage” was expected to reduce over time. There are provisions in the Act that
would enable industrial allocation to start to be phased out, but they have not been
used.
The current levels of allocation for emissions-intensive, trade-exposed activities have
not changed since they were established in 2009. The current rates in the Act are set
at 0.9 for highly emissions-intensive activities, and 0.6 for moderately emissions-
intensive activities. The bill would amend sections 81 and 83 of the Act to implement

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a general phase-out of industrial allocation for all activities by reducing the levels
each year from 2021. As introduced, the minimum phase-out rate would be: 0.01 per
year from 2021 to 2030; 0.02 per year from 2031 to 2040; and 0.03 per year from
2041 to 2050. Rather than needing to be initiated by regulation, the reduction would
happen automatically under the Act, unless the Minister regulates for a lower phase-
down rate on the recommendation of the Climate Change Commission.

Regulations that may reduce the general phase-out rate after 2030
Clause 77 of the bill would insert new section 84A into the Act. This would allow the
Minister to make regulations to reduce the rate of the phase-out that is set in the Act
after 2030 across all activities to certain specified levels. As mentioned above, the
Minister could only do this if the Climate Change Commission advised that there was
an ongoing and substantial risk of emissions leakage. The emissions leakage could be
in just one of the eligible activities, but any regulation made to reduce the general
phase-out rate would have to apply to all eligible activities.
The majority of us think there should be greater flexibility, and that the Minister
should instead be able to reduce the phase-out rate for a specific eligible industrial
activity that was deemed at risk of emissions leakage, while maintaining or increasing
the set phase-out rates for other eligible industrial activities.
This would mean industrial activities at less risk of emissions leakage would be
phased out more quickly, and better consideration could be given to the risks as they
relate to each industrial activity.
We recommend amending new section 84A accordingly.

Reviewing or changing allocative baselines
Each industrial activity that is emissions-intensive and trade-exposed has one or more
allocative baselines prescribed in regulations. As introduced, the bill does not propose
to review or change the allocative baselines; rather, the bill would change the rate of
assistance provided to those industrial activities. We do not recommend any changes
to the bill relating to allocative baselines. However, we recognise that in the future a
review of allocative baselines could be desired, and better data would be required to
carry out any review.
The regulations for allocative baselines are currently based on data from 2006 to
2009. There is a risk that the current baselines no longer reflect actual emissions
intensities from the industrial activities.
Under section 161D of the Act, the Minister has powers to require firms to provide
data for the purposes of determining the need for industrial allocation. Section 161E
of the Act limits the data that can be sought to that from the financial years between
2006 and 2009.
We therefore recommend amending section 161E (clause 139 of the bill) so that the
Minister could collect data from other years to assist in carrying out reviews of the
NZ ETS under section 160.

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ETS-wide operational improvements
The bill would make several changes to the compliance regime and operational
aspects of the NZ ETS. This would include the replacement of the excess emissions
penalty system with new penalties, provision for new infringement offences, and pub-
lication requirements. We discuss some of these below.

New infringement regime for low-level offending

Strict liability offences
Clause 46 of the bill would insert new sections 30L to 30V into the Act, to introduce
a regime for the creation of new infringement offences for low-level offending.
Infringement offences (with strict liability) could be created by the Minister through
regulation.
We recommend the bill be amended to ensure that the strict liability infringement
offences made by regulations under the Act do not include reference to mental culpa-
bility (such as “without reasonable care”), as such wording would not be consistent
with strict liability. Accordingly, we recommend amending clause 46, new section
30M. We note that strict liability offences do allow for instances where there is an
absolute lack of fault.

Procedure for regulations about infringement offences
The Regulations Review Committee wrote to us about new section 30N(4) which sets
out the procedure for making regulations about infringement offences. New section
30N(4) provides that failure by the Minister to consult with certain persons would not
affect the validity of the regulations about infringement offences.
The ministries advised us that the wording is copied from existing sections of the Act,
and is designed to prevent an attack on the validity of the regulations due to a minor
or technical error in consultation. We were told that such a provision does not gener-
ally protect against a deliberate decision not to consult in accordance with a statutory
obligation. As the provision in the bill does not involve a change in intent, and for
consistency throughout the Act, we do not recommend changing the wording.
We recommend inserting clause 8A, new section 3B to consolidate in one place the
procedures for consultation when making various regulations.

Replacing the excess emissions penalty system
The excess emissions penalty system is the current penalty system that applies when a
person fails to surrender or repay units. New sections 134 to 134D would restructure
this penalty into two new types of penalties: the surrender/repayment penalty (new
section 134), and the reporting penalties (new sections 134A to 134D). A surrender/
repayment penalty would apply if a person failed to pay units by a due date. Report-
ing penalties would cover situations where there is non-reporting or an error in a
report, and would be determined based on the Environmental Protection Authority
(EPA) assessing the person’s culpability.

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Comment on penalty design
We were advised that the Ministry of Justice was consulted in the development of
proposals to replace the excess emissions penalty system. Penalty regimes in which
determinations of guilt are made by non-judicial bodies are highly irregular and
should be strongly discouraged. An exception to this is the taxation model.
The Ministry for the Environment advised us that the taxation model is what the
reporting penalty regime is modelled on. It also advised that, on balance, it recom-
mends this approach, as proposed in the bill. It said that the NZ ETS penalty regime
should be aligned with the tax system because of the scale, complexity, and self-
reporting nature of the NZ ETS, and the high public interest in accuracy.
Additional information on the culpability factors in the proposed new reporting penal-
ties would be beneficial for participants. We understand work on this can be pro-
gressed outside the legislation.
We were advised that the Government is considering the impact of the surrender/
repayment penalty on smaller forestry participants.

Clarifying the $1,000 penalty in certain circumstances
New sections 134A to 134D would impose a $1,000 reporting penalty for inaccurate
reporting that results in an under-claim of an allocation or entitlement, or an over-
statement of emissions. This is to encourage accurate reporting. In those situations,
we consider that the penalty should instead be calculated using the formula as pro-
posed in the bill, and only then have a $1,000 maximum applied.
We recommend amending new sections 134A to 134D accordingly.
We note that if reporting were to result in an over-claim of an allocation or entitle-
ment, no maximum amount would apply to the penalty. If there were no change in the
person’s liability or entitlement, then no penalty should apply.

Time bar for amendment of returns
Late emissions returns would be allowed under new section 134. New section 127
would impose a time bar for the EPA to correct emissions returns. The time bar would
prevent the EPA from correcting a return that covered an obligation to surrender or
receive units for a period earlier than certain dates set out in the section.
However, as introduced, the EPA would be prevented from correcting historic non-
compliance if the participant had submitted a late return. This is because the time bar
for correcting returns is based on the time period that the obligation relates to, not the
date the return was submitted.
We recommend clarifying that the time bar for amending emissions returns under new
section 127 would not prevent the EPA from amending a late return submitted under
new section 134A. The time bar would apply from when the return was actually sub-
mitted rather than when it was due.
We recommend that this change be extended to new section 91A, so that the EPA
could also correct approvals of unique emissions factors. Otherwise, it is possible that

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the EPA would be prevented from correcting returns that were based on incorrect
unique emissions factors.

Enactment date for penalties
We recommend that the new penalties regime should apply from 1 January 2021,
rather than the enactment date of the bill. This would ensure that the regime aligns
with the reporting years and allow sufficient time for preparation. We recommend
amending clause 2 of the bill accordingly.

Transitional provisions for farm-level participants’ surrender obligations
SOP No 413 provides that farm-level participants would not face penalties for failure
to comply with surrender obligations in the first year the obligations are due.
The majority of us note that the policy intent is for no financial enforcement mechan-
isms to apply in the first year of surrender obligations for farm-level participants. The
majority of us therefore think it should be made clear that the new infringement
offences and reporting penalties would also not apply in the first year for farm-level
participants. We recommend reflecting this in our proposed new clause 223N, by
amending section 217 of the Act.

Notices given to participants and compliance due dates
As discussed earlier, the bill would introduce a new infringement and compliance
regime. As part of this, it would set various timeframes and deadlines for notices and
payments.
One of these timeframes is for the period from when the Environmental Protection
Authority notifies a person of their failure to submit an emissions return (or an annual
or closing allocation adjustment) by the due date, and the time that subsequent penal-
ties would apply. Under proposed new sections 134A and 134B, the notice period for
this would be 10 working days. We think this should be extended to 20 working days,
to give people more time to provide accurate information.
We recommend that this change be reflected in our proposed new clause 223E.

Publication of participants’ non-compliance
As introduced in clause 86(3) (which we propose to move to new clause 223), amend-
ments to section 89 of the Act would require the EPA to publish serious cases of indi-
vidual non-compliance. Publication would include relevant details relating to the non-
compliance, including the account holder’s name, penalty type, penalty amount, due
date, and payment date.

What types of non-compliance would be published
We consider that there would be benefit in clarifying what constitutes significant non-
compliance that would be subject to publication under the amendments to section 89.
As introduced, the bill would require penalties at culpability levels of “grossly care-
less” and “knowing” to be published. Simply not taking “reasonable care” would not
result in publication. However, we understand that more information could be provi-

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ded to participants outside the legislation so that there is a better understanding of the
culpability bands.

New permanent forestry penalties
The bill would enable permanent forests (that are post-1989 forests) to be registered
as a permanent forest under the NZ ETS, where the participant commits to remain in
the NZ ETS for 50 years.
Under new sections 194EF and 194EI, the bill would also establish two new penalties
for non-compliance with the requirements for permanent forests (relating to clear-fell-
ing and deforestation). The maximum penalties and defences would be set out in the
Act and regulations. However, the amount of any penalty applied would be deter-
mined by the court.
Under the bill as introduced, the EPA would not report details about individual penal-
ties for non-compliance with permanent forestry requirements. That is, those penalties
would not be covered by the new section 89 provisions for publication.
We think that, for consistency, new permanent forestry penalties should be covered by
the section 89 publication provisions. We recommend inserting clause 223ZF into the
bill to reflect this.

Consolidated groups
We recommend that members of a consolidated group should also be liable for penal-
ties and interest imposed on the group. We recommend amending clause 126 by
inserting new section 153(5B) accordingly.

Publication of participant-level emissions and removals data
Under current law, the EPA publishes emissions and removals data at an aggregated
level by sector and activity. It does not publish emissions and removals data at the
participant level, for confidentiality reasons. However, participants’ names and
addresses are publicly available on the New Zealand Emissions Trading Register.
Under clause 87 of the bill, new section 89A would require the EPA to publish par-
ticipant-level emissions and removals data each year.
We think participants should get advance notice of publication. We propose that the
EPA should be required to publish (on its website) the intended publication date of
emissions and removals data no less than 10 working days before publication. We
recommend inserting section 89A(4) accordingly.
Additionally, we recommend some minor changes to clarify the provisions:
• The EPA should still publish emissions returns in cases where it creates a

default assessment or amended return. In the bill as introduced, the EPA would
simply have to “receive” a return.

• The reporting should be able to be broken down by participant and by activity
if the return relates to more than one participant or activity.

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• The EPA should be able to report NZ ETS participants’ emissions and remov-
als in tonnes of carbon dioxide equivalent, and forestry participants’ net emis-
sions and net removals in tonnes of carbon dioxide equivalent.

We recommend amending new section 89A accordingly.

Consequential changes to the Income Tax Act 2007
The bill would introduce a new permanent forestry category to replace the Permanent
Forest Sink Initiative. It has been identified that these proposed changes in the bill as
introduced would require some consequential amendments to the Income Tax Act
2007. We recommend amending Schedules 3 and 4 of the bill accordingly.

Animal and fertiliser emissions

Animal emissions—reporting and surrender obligations
Under the bill and SOP 413 as introduced, sections 2A and 2C of the Act would be
amended to introduce mandatory reporting and unit surrender obligations under the
NZ ETS for agricultural farmers undertaking activities outlined in subpart 4 of Part 5
of Schedule 3 of the Act (being persons who farm, raise, grow, or keep ruminant ani-
mals, pigs, horses, or poultry).
Under the SOP, the first year for farm-level mandatory reporting would commence
from 1 January 2024, with returns due to the EPA by 31 March 2025. The first year
for farm-level unit surrender obligations would commence from 1 January 2025, with
returns due to the EPA by 31 March 2026. However, both of those dates could be
deferred by Order in Council.
Since 2011, mandatory reporting obligations exist for agricultural animal processors,
including dairy factories, abattoirs, and live animal exporters. Agricultural animal
processors would cease reporting in the NZ ETS when farm-level participants face
unit surrender obligations from 2025 (unless deferred by Order in Council). The bill
would continue to allow the introduction of surrender obligations for agricultural ani-
mal processors. Under the Act, agricultural animal processors could be subject to sur-
render obligations if an Order in Council was made requiring this.

Interim measure for voluntary reporting and participation
We think it could be beneficial to encourage voluntary farm-level reporting and par-
ticipation prior to mandatory reporting and participation.
We propose allowing regulations to be set to enable voluntary farm-level reporting for
animal or fertiliser emissions. We also propose allowing for regulations to be made to
enable voluntary farm-level participation (such as reporting allocations and surrender
obligations) for animal or fertiliser activities.
We recommend inserting clause 186B, new section 216 accordingly.

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Allocation applications for eligible agricultural activities—netting off
The SOP would insert new sections 86BAA and 86BB into the Act. The intention is
for agricultural allocations to be calculated at the same time as unit surrenders, so that
a net surrender return is determined. However, as introduced, there would be no spe-
cific requirement for the applications for allocations and emissions returns to be cal-
culated at the same time. It is considered unlikely that there would be an overall net
positive allocation in these circumstances. We recommend amending new section
86BAA to make it clear that the EPA could not make decisions on allocation applica-
tions (for eligible agricultural activities) until an emissions return was also submitted.
We also recommend amending new section 86BB to make it clear that an application
for allocation could not satisfy the entire surrender obligation.
We recommend amending new clause 81 new sections 86BAA and 86BB, accord-
ingly.

Review of progress on the Primary Sector Climate Change Commitments by the
Climate Change Commission
The SOP would set out the primary sector climate change commitments as new
Schedule 5 to the Act. It would also introduce a requirement for the Climate Change
Commission to report on the progress toward the primary sector climate change com-
mitments (set out in new Schedule 5) by June 2022.
If the Government considered that insufficient progress (through the Joint Action Plan
on Primary Sector Emissions, known as He Waka Eke Noa) was made towards ani-
mals-farmer participants being ready to start complying with reporting and surrender
obligations under the Act, the Minister for Climate Change, in consultation with the
Minister of Agriculture, could choose to make an order under new section 219 to start
processor-level pricing by recommending surrender obligations for agriculture in the
NZ ETS earlier than 2025.
The current wording in new Schedule 5 would require the He Waka Eke Noa Steering
Group to “approve” farm-level emissions reporting methods and definitions. We rec-
ommend changing “approved” to “accepted”, as it is not intended that an extensive
approval process would be undertaken. Rather, it is expected that known and reliable
methods and definitions for New Zealand farms would be published.
The He Waka Eke Noa progress report by the Climate Change Commission would
cover both animal emissions and fertiliser emissions. The rationale for including fer-
tiliser emissions is to keep animal and fertiliser emissions pricing in step, to send a
consistent price signal. Therefore, we consider that the order-making power that
would be created under new section 219 should include fertiliser emissions, as well as
animal emissions. We recommend amending new sections 219(1) and 2A(5) accord-
ingly.

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Forestry

Extending the implementation date for 14 policy changes
The bill as introduced provides that averaging accounting for newly registered
post-1989 forests would become mandatory from 1 January 2021. The bill would also
introduce a new permanent forestry category within the NZ ETS to replace the Per-
manent Forest Sink Initiative (PFSI).
The above changes would require significant amendments to the Climate Change
(Forestry Sector) Regulations 2008 to provide operational details.
Many of the new regimes in the bill as introduced would commence from 1 January
2021. We have been advised that more time is needed to develop these regulations.
We recommend deferring the implementation dates for 14 forestry policy changes to
1 January 2022. Those 14 policy changes are:
• introducing mandatory averaging accounting for newly registered standard

post-1989 forests
• introducing a new permanent forestry category within the NZ ETS
• specifying that participants with standard post-1989 forests subject to averag-

ing and permanent forestry will not be required to surrender units for emissions
liabilities from temporary adverse events, as long as the forest is replanted

• allowing post-1989 standard forestry participants using averaging accounting
to offset their deforestation liability by planting an equivalent forest elsewhere

• improving the design of offsetting for pre-1990 forests to allow greater flexibil-
ity of land use

• simplifying and standardising the types of emissions returns participants need
to submit for post-1989 forests

• simplifying the process to access exemptions from deforestation liabilities for
areas of tree weeds, and excluding post-1989 land predominantly containing
tree weeds, from the ETS

• allowing deregistration of persistently non-compliant post-1989 standard for-
estry participants

• improving and enabling enforcement of the transmission of interest process for
transferring registered post-1989 land between parties (for example, when buy-
ing and selling land)

• allowing participants to reconfigure carbon accounting areas without having to
surrender their full unit balance at the time of reconfiguration

• clarifying how emissions or removals from all forest land (including forest land
with mixed ages) in a carbon accounting area are to be included in an emis-
sions return

• clarifying what happens if a transmission of interest has occurred but the trans-
mission process is not completed before a mandatory emissions return is due

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• requiring that all post-1989 forestry participants’ emissions returns must be net
of any unit repayments/surrender obligations they may have for the activity
being reported on the relevant land (that is, either standard post-1989 forestry
or permanent forestry, which are reported separately)

• clarifying obligations around the deregistration of post-1989 forest boundaries.
We recommend amending the bill accordingly.

Amendments resulting from the change of implementation date for averaging
accounting and related provisions

Extending the option to use either averaging accounting or stock change accounting
to forests that apply to register in 2021
As introduced, the bill would require mandatory averaging accounting for post-1989
forests registering in the NZ ETS from 2021. As a transitional measure, the bill would
enable participants for post-1989 forests who are registered in the NZ ETS in 2019
and 2020 to choose whether to move to averaging accounting, or continue with stock
change accounting. As introduced, this was provided for in new clauses 23 to 26 of
Schedule 1AA (clause 202 of the bill). We note we have proposed moving these pro-
visions to new clauses 31 to 35 of Schedule 1AA (clause 223ZZ of the bill).
We recommend extending the option for NZ ETS post-1989 standard forestry partici-
pants to use either averaging accounting or stock change accounting if they apply to
register by 31 December 2021 (and have been registered by 30 June 2022), in add-
ition to those registered in 2019 and 2020.
We recommend inserting new clauses 31 and 32 into Schedule 1AA of the Act
accordingly.

Changing the Permanent Forest Sink Initiative notification period
Under proposed new clauses 20 and 21 of Schedule 1AA of the Act (which we pro-
pose moving to new clause 29 of Schedule 1AA), PFSI participants would be
required to inform the EPA in 2021 of their decision whether to move into the NZ
ETS or leave carbon forestry. Without any notification, there would be a mandatory
transfer into the permanent forestry category in the NZ ETS on 1 January 2022. We
recommend amending the bill to:
• require participants to inform the EPA of their decision to move into the NZ

ETS or leave carbon farming, by the end of 2022
• require a mandatory transfer of any remaining PFSI forests to permanent for-

estry on 1 January 2023, under new clause 29 of Schedule 1AA of the Act.
• make consequential amendments so the repeal of the PFSI under the Forests

Act 1949 would take effect on 1 January 2023 (as set out in Schedule 6 of the
bill).

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Amendment Bill 15



Clarifying the start of the deforestation stand-down period
The bill would introduce an empowering provision for a stand-down period during
which land previously forested must have remained deforested to qualify as a first
rotation forest. As introduced, new section 194FD provides that the stand-down
period could not take into account any deforestation that took place prior to Royal
assent.
We recommend amending new section 194FD to specify that the stand-down period
would not consider deforestation that occurs prior to 1 January 2021. On balance, we
believe this would provide greater operational clarity.

Three forestry provisions that should be implemented on 1 January 2021
As introduced, the following three provisions would come into effect on the com-
mencement date. We recommend that the bill be amended to provide for these provi-
sions to commence on 1 January 2021:
• proposed amendments to section 181—which would clarify when pre-1990 for-

est land is considered to be deforested
• proposed amendments to section 192—which would make the transfer of NZ

ETS participation over post-1989 forest land (when a forestry right or lease is
granted) optional

• proposed amendments to section 179—which would clarify that cleared land
re-established in forest by a combination of planting and natural regeneration is
not considered deforesting.

Permanent forestry

New permanent forestry activity in the NZ ETS
To lower the risk of over- or under-crediting a participant, we recommend that:
• PFSI covenant holders who wish to transition some of their forest into

post-1989 forestry and some into permanent forestry should be able to subdi-
vide it into a number of carbon accounting areas after calculating the unit bal-
ance for the forest, but before completing the registration into the ETS forestry
activities.

• Forests moving from the PFSI into post-1989 forestry under averaging would
surrender units for the difference between a higher current carbon stock and the
average for that forest type.

Compliance for clear-fell harvest and deforestation
In the bill as introduced, forests registered as permanent forestry would not be permit-
ted to be clear-fell harvested or deforested for 50 years. Any excess clear-fell would
be subject to penalties based on the timber value.
We think it needs to be clearer how the penalties would be calculated. Therefore, we
recommend proceeding with new sections 194EE to 194EI, but specifying in section

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194EF(4) that the maximum penalty for non-compliant harvesting of permanent for-
estry would be equal to the value of 30% of the timber found in a fully stocked hec-
tare.

Supporting provisions for forests using averaging and permanent forestry

Carbon equivalent forest land swaps for post-1989 forests using averaging
We recommend that, throughout the bill, post-1989 Carbon Equivalent Forest Land
Swaps (CEFLS) be renamed as “P89 offsetting”, with consequential changes. We
consider that “offsetting” is the more widely used terminology for this process, is
more clearly identifiable, and also reflects the number of conceptual similarities to
pre-1990 offsetting.

Supporting forestry operational improvements

Improving the process for offsetting pre-1990 forests
The bill would make changes to the offsetting process for pre-1990 forests, and pro-
vide more flexibility for forest owners.
We recommend amending the bill to:
• align the eligibility criteria for non-forest land to be included in the offset

application between post-1989 and pre-1990 offsetting
• allow established eligible forest land to be added to an existing application
• redraft the new sections of the bill relating to pre-1990 offsetting to correct

process issues.
We recommend sections 186A to 186J of the Act be replaced by new sections 186AA
to 186FC accordingly.

Ability to deregister a participant for persistent non-compliance
The bill would enable the EPA to deregister standard post-1989 forestry participants
who are persistently non-compliant in meeting their obligations. New section
57(4)(bb) would allow the EPA to consider any previous non-compliance with out-
standing obligations, and to not be required to register the applicant as a participant.
As introduced, the new section could be construed as incorporating any persistent
non-compliance in the ETS, in areas other than post-1989 forest land.
We propose amending the bill to ensure that a person who has been deregistered for
persistent non-compliance would not be registered as a participant in respect of either
standard post-1989 or permanent forestry, if they have not met outstanding obliga-
tions from a previous registration in post-1989 forestry.
We recommend inserting new clause 223W to amend new section 57(4)(bb) accord-
ingly.

Commentary
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Amendment Bill 17



Transmission of interest
Clauses 175, 176, and 178 would amend the Act to set out processes for the transmis-
sion of interests in post-1989 forest land. The provisions in the bill would address
single non-compliant transmissions of interest. However, where there are multiple
non-compliant transmissions of interest, there could be significant costs for the
Crown.
We recommend amending the bill to require the EPA to impose any stock change
liability or entitlements on the most recent transferee, where there have been multiple
non-compliant transmissions of interest. We were advised that information contained
in the notice of each title is going to be improved, so that participants will have better
information when conducting due diligence prior to purchase.
We recommend inserting new sections 194AA to 194AC accordingly.
We also recommend ensuring that estate administrators can act on behalf of each
deceased participant separately. We recommend amending new section 192 accord-
ingly.

Powers to make forestry regulations—best practice forest management
Under new section 168(1)(nc), inserted by clause 144, a new regulation-making
power would be created to determine the meaning of “best practice forest manage-
ment” in the context of section 179A of the Act. Currently, the definition is deter-
mined by administrative policy, whereas the bill would require it to be provided for in
regulations.
The Regulations Review Committee queried whether the definition should instead be
stipulated in the Act. We were advised that the definition would need to apply to a
broad set of circumstances that are expected to undergo continual change due to the
changing nature of forest management.
We propose that the regulations about best practice forest management (in the context
of section 179A) be added to the regulations that must be consulted on. To do this, we
recommend amending clause 144 to insert new section 168(3). We note we have also
recommended that consultation requirements are consolidated into new section 3B,
which we discussed earlier.

Powers to make forestry regulations—retrospective regulations for averaging
As introduced, new section 194LA would allow regulations to be made about averag-
ing methodology. We note that we propose separating that proposed section into new
sections 194LA and 194FE. Subsection (3) of each new section would allow these
regulations to have limited retrospective effect:
• A regulation could apply from the commencement of the mandatory emissions

return period (MERP) in which the regulation is made or from a later date in
that period.

• A regulation made under subsection 194FE(1)(d)(i), which is about prescribing
the stand-down period after deforestation before a new forest may be consid-

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ered a first rotation forest, may prescribe a stand-down period that begins
before the regulation is made.

The Regulations Review Committee queried this retrospectivity.
It is not intended that the retrospectivity could apply to participants that have already
registered into the NZ ETS. Therefore, we recommend clarifying that a change in the
stand-down period made under new section 194FE(3)(b) would not extend to forests
already registered in the NZ ETS as a first rotation forest. We recommend inserting
new section 194FE(4) so that any changes to regulations to increase the stand-down
period would not apply retrospectively to change the stand-down period for land
already registered.

New Zealand National Party minority view
This bill was introduced to the House in October 2019 at a time when the COVID-19
crisis confronting the world could not have been contemplated.
At first reading the bill had significant and important policy details yet to be included.
Those policy gaps were filled by way of the Minister’s SOP 413 during the select
committee’s process, but many of the specific policy aspects were not finalised until
very late in the committee’s work on the bill.
This is a long, complex, multifaceted, administratively complicated bill that upon
enactment will have widespread and costly implications for every sector of the New
Zealand economy.
Much of the Environment Committee’s work on the bill has been conducted in the
shadow of COVID-19 but without consideration of or reference to it.
National members objected to the bill being advanced during the COVID-19 adjourn-
ment of Parliament. We do not believe the committee has had an adequate or suffi-
ciently robust opportunity to conduct a full and detailed analysis of the bill’s impacts
let alone upon a post-COVID-19 domestic and global economic environment.
National members are concerned that this bill will add further cost, uncertainty and
inhibitors to economic recovery at a time when we are facing the greatest economic
challenge of our lifetime.
The National Party believes that progressing a bill that significantly increases the cost
of living at a time when we are unable to even begin to quantify the negative impact
of COVID-19 on the New Zealand economy is irresponsible.
National opposes this bill proceeding at present. Instead, we propose that the passage
of this bill be postponed for 12 months when we will have more certainty around the
economic position New Zealand will be in post-COVID-19. Consideration in terms of
the impacts of the bill’s enactment in light of COVID-19 could take place while at the
same time providing an opportunity for a more detailed and robust analysis of the cli-
mate change policy tools the bill seeks to implement.

Commentary
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Amendment Bill 19



Appendix

Committee process
The Climate Change Response (Emissions Trading Reform) Amendment Bill was
referred to the committee on 5 November 2019. The closing date for submissions was
17 January 2020. We received and considered 171 submissions from interested
groups and individuals. We heard oral evidence from 62 submitters at hearings in
Auckland and Wellington.
We received advice from the Ministry for the Environment, the Ministry for Primary
Industries, and Te Uru Rākau (Forestry New Zealand).
The Regulations Review Committee reported to the committee on the powers con-
tained in the bill and Supplementary Order Paper No 413.

Committee membership
Dr Duncan Webb (Chairperson)
Dr Liz Craig
Hon Jacqui Dean (from 19 February 2020)
Sarah Dowie (until 19 February 2020)
Hon Nathan Guy
Jenny Marcroft
Hon Scott Simpson
Erica Stanford
Chlӧe Swarbrick
Angie Warren-Clark

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Key to symbols used in reprinted bill

As reported from a select committee
text inserted by a majority
text deleted by a majority

Climate Change Response (Emissions Trading Reform)
Amendment Bill





Hon James Shaw

Climate Change Response (Emissions Trading Reform)
Amendment Bill

Government Bill

Contents
Page

1 Title 28
2 Commencement 28
3 Principal Act 29

Part 1
Amendments to principal Act

Subpart 1—Amendments that commence on day after Royal assent
4 Section 2A amended (Application of Schedules 3 and 4) 29
5 Section 2B amended (Orders in Council in relation to Part 5 of

Schedule 3)
30

6 Section 2C amended (Effect of Orders in Council in relation to
Part 5 of Schedule 3)

30

5 Sections 2B and 2C replaced 31
2B Orders in Council in relation to subparts 2 and 4 of Part 5

of Schedule 3 (Agriculture)
31

2C Effect of overlapping application of subparts of Part 5 of
Schedule 3 (Agriculture)

32

7 Section 3 amended (Purpose) 33
8 Section 3A amended (Treaty of Waitangi (Te Tiriti o Waitangi)) 34
8 Section 3A amended (Treaty of Waitangi (Te Tiriti o Waitangi)) 35
8A New section 3B inserted (Consultation about certain regulations,

orders, and notices)
36

3B Consultation about certain regulations, orders, and
notices

36

9 Section 4 amended (Interpretation) 38

186—2 1



10 New sections 4A and 4B inserted section 4AA inserted
(Greenhouse gas definition may be amended to add gases)

44

4A4AA Greenhouse gas definition may be amended to add gases 44
4B Transitional, savings, and related provisions 44

10A Section 5D amended (Membership of Commission) 44
10B Section 5J amended (Commission’s functions) 44
10C Section 5N amended (Consultation) 44
10D Section 5ZG amended (Requirement for emissions reduction plan) 45
10E Section 5ZI amended (Minister to prepare and make emissions

reduction plan publicly available)
45

10F Section 5ZL amended (Commission to report at end of emissions
budget period)

45

10G New subpart 6 of Part 1B inserted 45
Subpart 6—Recommendations about making regulations

5ZOA Recommendations about limits and price control settings
for units

46

5ZOB Recommendations about decreased or increased phase-
out rates

46

11 Section 6 amended (Minister of Finance may direct Registrar
regarding establishment of Crown holding accounts and carry out
trading activities with respect to units)

46

12 Section 6A amended (Minister’s power to sell by auction) 47
13 Section 7 amended (Minister of Finance may give directions to

Registrar regarding accounts and units)
47

14 Section 9 amended (Minister of Finance may obtain information
from inventory agency and Registrar)

47

15 Section 10 replaced (Purpose of Registry) 47
10 Purpose of Registry 47

16 Section 13 amended (Registrar may refuse access to, or suspend
operation of, Registry)

48

17 Section 14 amended (Registrar must give effect to directions) 48
18 Section 15 amended (Registrar to allocate unique numbers) 48
19 Sections 16 and 17 repealed 48
20 Section 18 amended (Form and content of unit register) 48
21 Section 18B amended (Closing holding accounts) 48
22 Section 18C amended (Transfer of units) 48
23 Section 18CA amended (Effect of surrender, retirement,

cancellation, and conversion)
48

23 Section 18CA replaced (Effect of surrender, retirement,
cancellation, and conversion)

49

18CA Effect of surrender and cancellation 49
24 Sections 18CB, 18CC, and 18CD repealed 49
25 Section 18D amended (Succession) 49
26 Section 19 repealed (Retirement of Kyoto units by the Crown) 49

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27 Section 20 amended (Transactions must be registered) 49
28 Section 21 repealed (Registration procedure for Kyoto units) 50
29 Section 21AA amended (Registration procedure for New Zealand

units and approved overseas units)
50

30 Section 21A amended (Electronic registration) 50
31 Section 21B amended (Defective applications) 50
32 Section 23 repealed (Receiving Kyoto units from overseas

registries)
51

33 Section 23A amended (Receiving New Zealand units and approved
overseas units from overseas registries)

51

34 Section 24 amended (Priority of registration) 51
35 Section 25 amended (Correction of unit register) 51
36 Section 27 amended (Information accessible by search) 51
37 Section 30A amended (The Crown or Registrar not liable in

relation to searches in certain cases)
52

38 Sections 30B to 30D and cross-heading repealed 52
39 Section 30E repealed (Conversion of New Zealand units into

designated assigned amount units for sale overseas or cancellation)
52

40 Section 30G amended (Regulations relating to Part 2) 52
41 Sections 30GA and 30GB to 30H replaced 53

30GA Regulations for auctions to sell New Zealand units 53
30GB Regulations about overall limits and price control settings

for units
54

30GC Requirements for regulations about overall limits and
price control settings for units

57

30GD Regulations for auction monitor 59
30GE Sharing information with auction monitor 60
30GF Obligation of confidentiality on auction monitor 60
30GG Offence for breach of auction monitor’s obligation of

confidentiality
61

30H Consultation and commencement for certain regulations
about units and auctions

61

42 Section 30H amended (Procedure for certain regulations relating to
units)

61

43 Section 30I amended (Incorporation by reference in regulations
made under section 30G)

62

44 New section 30IA inserted (Minister must obtain emission
reductions to match reserve amounts of units released)

62

30IA Minister must obtain emission reductions to match
reserve amounts of units released

62

44 New section 30IA inserted (Minister must obtain greenhouse gas
reductions to match certain excess units)

62

30IA Minister must obtain greenhouse gas reductions to match
certain excess units

62

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45 Section 30J amended (Signing false declaration with respect to
regulations made under section 30G)

63

46 New subparts 3 and 4 subpart 3 of Part 2 inserted 63
Subpart 3—Infringement offences

30L Meaning of infringement offence and infringement fee 63
30M Regulations about infringement offences 63
30N Procedure for regulations about infringement offences 64
30N Consultation and commencement for regulations about

infringement offences
65

30O Proceedings for infringement offences 65
30P Appointment of enforcement officers 65
30Q When infringement notice may be issued 65
30R Infringement notice may be revoked 65
30S What infringement notice must contain 66
30T How infringement notice may be served 66
30U Payment of infringement fees 67
30V Reminder notices 67

Subpart 4—Regulations setting price of carbon
30W Regulations setting price of carbon 67

47 Section 31 amended (Meaning of greenhouse gas) 68
48 Section 32 amended (Primary functions of inventory agency) 68
49 Section 35 amended (Publication) 68
50 Section 36 amended (Authorisation of inspectors) 68
50A Section 48 amended (Signing false declaration in respect of

regulations made under section 50)
68

51 Section 49 amended (Reporting) 68
52 Section 50 amended (Regulations) 68
53 Section 51 amended (Incorporation by reference in regulations

made under section 50)
69

54 Section 52 amended (Inventory agency must report to Minister on
certain matters before certain regulations are made)

69

55 Section 53 repealed (Consequential amendments) 69
56 Section 54 amended (Participants) 69
57 Section 55 amended (Associated persons) 70
58 Section 56 amended (Registration as participant in respect of

activities listed in Schedule 3)
70

59 Section 57 amended (Applicant to be registered as participant in
respect of activities listed in Schedule 4)

70

60 Section 58 amended (Removal from register of participants in
respect of activities listed in Schedule 4)

70

61 Section 59 amended (Removal from register of participants in
respect of activities listed in Schedules 3 and 4)

70

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62 New sections 59A and 59B inserted section 59B inserted (Removal
from register if participant never carried out activity)

71

59A Removal from register for persistent non-compliance
(standard forestry participants only)

71

59B Removal from register if participant never carried out
activity

72

63 Section 60 amended (Exemptions in respect of activities listed in
Schedule 3)

72

64 New sections 60A and 60B inserted 72
60A Exemption for participants in standard forestry or

permanent forestry activity listed in Part 1 of Schedule 4
73

60B Incorporation by reference in order made under section
60 or 60A

74

65 Section 61 amended (Requirement to have holding account) 74
66 Section 62 amended (Monitoring of emissions and removals) 74
67 Section 63 amended (Liability to surrender units to cover

emissions)
75

67 Section 63 amended (Liability to surrender units to cover
emissions)

75

68 Section 64 amended (Entitlement to receive New Zealand units for
removal activities)

75

68 Section 64 amended (Entitlement to receive New Zealand units for
removal activities)

76

68A New section 64A inserted (Transfer of units allocated, or entitled
to be received or reimbursed, less any units that must be
surrendered or repaid)

76

64A Transfer of units allocated, or entitled to be received or
reimbursed, less any units that must be surrendered or
repaid

76

69 Section 65 amended (Annual emissions returns) 77
70 Section 67 amended (Retention of emissions records) 78
71 Section 68 amended (Issuing New Zealand units) 78
72 Section 69 repealed (Notification of intention regarding New

Zealand units)
79

73 Cross-heading above section 70 amended 79
74 Sections 70 to 79 replaced 79

70 Allocation plan issued 79
75 Section 81 amended (Entitlement to provisional allocation for

eligible industrial activities)
79

76 Section 83 amended (Annual allocation adjustment) 80
77 New sections 84A to 84D inserted 80

84A Regulations reducing general phase-out rate 80
84B Regulations increasing phase-out rate for specific

activities
81

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84C Procedure for regulations setting phase-out rates 82
84D Climate Change Commission to advise on regulations

setting phase-out rates
83

77 New sections 84A to 84C inserted 83
84A Regulations setting decreased phase-out rates 83
84B Regulations setting increased phase-out rates 84
84C Procedure for regulations setting phase-out rates 85

78 Section 85 amended (Allocation of New Zealand units in relation
to agriculture)

86

79 Section 85A amended (Temporary suspension of phase-out rates
for assistance under sections 81, 83(2), and 85(2))

86

79A Section 86 amended (Applications for allocation of New Zealand
units for industry and agriculture)

87

79B Section 86A amended (Provisional allocation to industry in and
after 2013)

87

80 Section 86B amended (Decisions on applications for allocations of
New Zealand units to industry and agriculture)

87

81 New section 86BA inserted (Transfer of allocated units, less any
units that must be surrendered or repaid)

87

86BA Transfer of allocated units, less any units that must be
surrendered or repaid

88

81 New sections 86BAA to 86BB inserted 88
86BAA Decisions on applications for allocations of New Zealand

units to agriculture
88

86BA Transfer of allocated units to industry, less any units that
must be surrendered or repaid

89

86BB Transfer of allocated units to agriculture, less any units
that must be surrendered or repaid

89

82 Section 86C amended (Reconsideration of allocation decisions) 90
83 Section 86E amended (Minister or EPA or chief executive may

require further information for purpose of carrying out functions
under subpart)

90

84 Section 87 amended (Functions of EPA) 91
85 Section 88 amended (Directions to EPA) 91
86 Section 89 amended (EPA to publish certain information) 91
87 New section 89A inserted (EPA to publish participant data on

emissions and removals)
92

89A EPA to publish participant data on emissions and
removals

92

88 Section 90 amended (EPA may prescribe form of certain
documents)

93

89 Section 91 amended (Approval of unique emissions factors) 94
90 New section 91A inserted (Correction of unique emissions factors) 94

91A Correction of unique emissions factors 94

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91 Section 92 amended (Recognition of verifiers) 94
92 Section 93 amended (Appointment of enforcement officers) 94
93 Section 94 amended (Power to require information) 94
94 Section 95 amended (Power to inquire) 95
95 Section 96 amended (Inquiry before District Court Judge) 95
96 Section 99 amended (Obligation to maintain confidentiality) 95
97 Section 100 amended (Power of entry for investigation) 95
98 Section 104 amended (Information obtained under section 100 or

101 only admissible in proceedings for alleged breach of
obligations imposed under this Part and Part 5)

95

99 Section 107 amended (Applications for emissions rulings) 95
100 New section 107A inserted (Insufficient information provided for

ruling on entire application)
96

107A Insufficient information provided for ruling on entire
application

96

101 Section 108 amended (Matters in relation to which EPA may
decline to make emissions rulings)

97

102 Section 109 amended (Making of emissions rulings) 97
103 Section 116 amended (Effect of emissions rulings) 97
104 Section 117 amended (EPA may publish certain aspects of

emissions rulings)
97

105 Section 118 amended (Submission of final emissions returns) 98
106 Section 120 amended (Amendment to emissions returns by EPA) 98
107 Section 123 amended (Effect of amendment or assessment) 98
108 Section 124 amended (Reimbursement of units by EPA) 98
109 Section 125 replaced (Repayment of units by persons in case of

error)
98

125 Repayment of units by persons in case of error 98
110 Section 127 amended (Time bar for amendment of emissions

returns)
99

111 New sections 128A and 128B and cross-heading inserted 100
Notices required from participants

128A EPA may act if participant fails to give notice 100
128B Effects of EPA acting after participant fails to give notice 101

112 Section 129 amended (Offences in relation to failure to comply
with various provisions)

101

113 Section 132 amended (Other offences) 101
114 Section 133 amended (Evasion or similar offences) 101
115 Sections 134 to 136 replaced 102

134 Penalty for failing to surrender or repay units by due date 102
134A Penalty for failing to submit emissions return by due date 102
134B Penalty for failing to submit annual or closing allocation

adjustment by due date
104

134C Penalty for submitting incorrect emissions return 105

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134D Penalty for providing incorrect information in allocation
application or adjustment

106

135 Due dates for payment of penalties 107
135A Deferred payment arrangements for payments of

penalties
107

136 Penalties are debt due to Crown 108
116 Section 137 amended (Interest for late payment) 108
117 Section 138 amended (Obligation to pay penalty not suspended by

appeal)
109

118 Section 138A replaced (Penalties to be paid into Crown account) 109
138A Penalties to be paid into Crown account 109

119 Section 143 amended (Evidence in proceedings) 109
120 Section 144 amended (Request for review of decisions) 109
121 Section 148 amended (Giving of notices to EPA) 110
122 Section 150 amended (Formation of consolidated group) 111
123 Section 151 amended (Changes to consolidated groups) 111
124 Section 151A amended (Addition of activities to consolidated

groups)
112

125 Section 152 amended (Nominated entities) 112
126 Section 153 amended (Effect of being member of consolidated

group)
112

127 Section 154 repealed (Emissions returns by consolidated group in
respect of activities in Part 1 of Schedule 4)

114

128 Section 155 amended (Ceasing to be member of consolidated
group)

114

129 Section 156 replaced (Effect of ceasing to be member of
consolidated group)

114

156 Effect of ceasing to be member of consolidated group 114
130 Section 156A amended (Removal of activities from consolidated

groups)
114

131 Section 157 amended (Unincorporated bodies) 115
132 Section 159 amended (Recovery of costs) 115
133 Section 160 amended (Review of operation of emissions trading

scheme)
115

134 Section 161 amended (Appointment and conduct of review panel) 115
135 Section 161A amended (Regulations in relation to eligible

industrial activities)
115

136 Section 161B repealed (Australian eligible industrial activities) 116
137 Section 161C amended (Other eligible industrial activities) 116
138 Section 161D amended (Power to require information for purposes

of allocation to industry)
116

139 Section 161E amended (Requirements in respect of notice given
under section 161D)

116

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140 Section 161F amended (Consultation on activities that may be
prescribed as eligible industrial activities)

116

140 Section 161F repealed (Consultation on activities that may be
prescribed as eligible industrial activities)

116

140A Section 161G amended (Regulations in relation to eligible
agricultural activities)

117

140B Section 162 amended (Regulations adding further activity to Part 2
of Schedule 4)

117

141 Section 163 amended (Regulations relating to methodologies and
verifiers)

117

142 Section 166 amended (Procedure for regulations relating to
methodologies, verification, unique emissions factors, and
offsetting)

118

142 Section 166 replaced (Procedure for regulations relating to
methodologies, verification, unique emissions factors, and
offsetting)

118

166 Consultation and commencement for regulations about
methodologies, verifiers, and unique emissions factors

118

143 Section 167 amended (Regulations relating to fees and charges) 118
144 Section 168 amended (Other regulations) 119
145 Section 169 amended (Incorporation by reference in regulations

made under section 163, 164, 167, or 168)
119

146 Section 170 replaced (Effect of amendments to, or replacement of,
material incorporated by reference in regulations)

120

170 Effect of amendments to, or replacement of, material
incorporated by reference in regulations

120

147 Section 172 replaced (Effect of expiry of material incorporated by
reference)

120

172 Effect of expiry of material incorporated by reference 120
148 Section 173 amended (Requirement to consult) 120
149 Section 174 amended (Public access to material incorporated by

reference)
121

150 Section 175 amended (Application of Legislation Act 2012 to
material incorporated by reference)

121

151 Section 178A amended (Option to pay money instead of
surrendering units to cover emissions)

121

152 Section 178B amended (Issuing New Zealand units to meet
surrender obligations)

121

153 Section 178C repealed (Prohibition on ability to export New
Zealand units)

121

154 Part 5 divided into Parts 5 to 5D and new Part 5 divided into
subparts

122

155 Section 179 amended (Forest land to be treated as deforested in
certain cases)

123

Climate Change Response (Emissions Trading Reform)
Amendment Bill

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156 Section 179A amended (Forest land may not be treated as
deforested in certain cases)

123

157 Section 181 amended (When deforestation to be treated as
occurring in respect of pre-1990 forest land)

124

158 Section 183 amended (Applications for exemption for land
holdings of less than 50 hectares of pre-1990 forest land)

124

159 Section 183A amended (Certain applications not otherwise
permitted by section 183)

124

160 New section 183B inserted (Applications for exemption for some
Maori land or land with 10 or more owners)

125

183B Applications for exemption for some Maori land or land
with 10 or more owners

125

161 Section 184 amended (Exemptions for deforestation of land with
tree weeds)

126

162 New section 185A inserted (Regulations about exemptions for
deforestation of land with tree weeds)

127

185A Regulations about exemptions for deforestation of land
with tree weeds

127

163 Section 186 amended (Methodology for pre-1990 forest land
cleared in 8 years or less)

128

164 Section 186B amended (Criteria for approving offsetting forest
land applications)

128

165 Section 186C amended (Conditions applicable to offsetting forest
land)

129

166 New section 186CA inserted (Variation to approved offsetting
forest land application)

129

186CA Variation to approved offsetting forest land application 129
167 Section 186D amended (Requirements relating to offsetting forest

land)
130

168 Section 186F amended (Regulations relating to offsetting) 130
168 Section 186F amended (Regulations relating to offsetting) 130
169 Section 186H amended (Treatment of allocations in respect of

pre-1990 forest land that is offset)
130

170 Section 186J amended (Methodology for pre-1990 offsetting forest
land cleared after usual rotation period is completed)

131

171 New section 186K inserted (Standard and permanent forestry on
post-1989 forest land)

131

186K Standard and permanent forestry on post-1989 forest land 131
172 Section 187 amended (Conditions on registration as participant in

respect of certain activities relating to post-1989 forest land)
131

172 Section 187 amended (Conditions on registration as participant in
respect of certain activities relating to post-1989 forest land)

132

173 Section 188 amended (Registration as participant in respect of
post-1989 forest land)

132

Climate Change Response (Emissions Trading Reform)
Amendment Bill

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173 Section 188 amended (Registration as participant in respect of
post-1989 forest land)

133

174 Sections 188A to 191 replacedNew sections 188AC and 188AD
inserted

133

188AA Removing registration as participant in standard or
permanent forestry

134

188AB Removing registration as participant in standard or
permanent forestry in certain natural events or clearance
for forest management

135

188AC Notice to forestry participant if their registration added or
removed

135

188AD Notice to interested party if forestry participant’s
registration added or removed

136

Provisional and final forestry emissions returns
189AA Provisional forestry emissions return in any year 136
189AB Final forestry emissions return at end of mandatory

emissions return period
136

189BA Preparing provisional or final forestry emissions return 137
Calculations for provisional and final forestry emissions

returns
189CA Gross liability or entitlement for each CAA1 in emissions

return
138

189CB Net liability or entitlement for each CAA1 in final
forestry emissions return

139

189CC Unit balance calculation for each CAA1 in emissions
return

139

189CD Total liability or entitlement for all CAA1s in emissions
return

140

Total liability or entitlement and unit balance has effect
for all emissions returns

189DA Total liability or entitlement has effect, and unit balance
updated, when emissions return submitted

140

New unit balance report for certain applications or
notices

189EA New unit balance report 141
Maximum liability is unit balance of carbon accounting

area
190 Maximum liability is unit balance of carbon accounting

area
142

Ceasing participation in standard or permanent forestry
191AA Ceasing participation for whole carbon accounting areas 142

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191AB Effect of ceasing participation for whole carbon
accounting areas

143

191BA Ceasing participation for part carbon accounting areas 143
191BB Effect of ceasing participation for part carbon accounting

areas
144

191CA If participant has never carried out activity in carbon
accounting area

145

Transmission of interest relating to standard or
permanent forestry

174A Section 189 amended (Emissions returns for post-1989 forest land
activities)

145

174B Section 191 amended (Ceasing to be registered as participant in
respect of post-1989 forest land)

145

174C New section 191CA inserted (If participant has never carried out
activity in carbon accounting area)

146

191CA If participant has never carried out activity in carbon
accounting area

146

175 Section 192 amended (Effect of transmission of interest in
post-1989 forest land)

146

176 Section 193 replaced (Effect of transmission of interest in
post-1989 forest land)

148

193 Effect of transmission of interest in post-1989 forest land 148
176 Section 193 amended (Emissions returns in relation to transmitted

interests)
148

177 New cross-heading above section 194 inserted 148
Information about status of forest land

178 New sections 194AA to 194EL and cross-headings inserted 149
Non-compliance for transmitted interests

194AA EPA may act if persons fail to give notice of transmitted
interest

149

Application to reconfigure carbon accounting areas for
standard or permanent forestry

194CA Application to reconfigure carbon accounting areas for
standard or permanent forestry

150

194CB Criteria to reconfigure carbon accounting areas for
standard or permanent forestry

151

194CC Approval of application to reconfigure carbon accounting
areas for standard or permanent forestry

151

194CD Restriction start date of reconfigured carbon accounting
area for permanent forestry

151

Application to change activity on post-1989 forest land
194DA Application to change activity on post-1989 forest land 152

Climate Change Response (Emissions Trading Reform)
Amendment Bill

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194DB Criteria to change activity on post-1989 forest land 154
194DC Approval of application to change activity on post-1989

forest land
154

194DD Emissions return for application to change from PFSI
activity

155

194DE New unit balance report for application to change from
PFSI activity

155

194DF Liability to surrender units on transfer from permanent
forestry to standard forestry in carbon accounting area
(averaging)

156

194DG Liability to surrender units on transfer from standard
forestry in carbon accounting area (averaging) to
permanent forestry

157

Restrictions for permanent forestry land
194EA Permanent forestry period for land 158
194EB Restriction on ceasing to be registered for permanent

forestry
159

194EC Minister may approve removal of land from permanent
forestry

160

194ED Exception from prohibition on clear-felling and
deforestation

161

194EE Permanent forestry land must not be clear-felled 161
194EF Pecuniary penalty for clear-felling of permanent forestry

land
161

194EG Regulations for pecuniary penalty for clear-felling 162
194EH Permanent forestry land must not be deforested 163
194EI Pecuniary penalty for deforestation of permanent forestry

land
163

194EJ Due dates for payment of penalties and recovery of EPA’s
costs

164

194EK Option must be chosen at end of permanent forestry
period

164

194EL Removal of carbon accounting area from permanent
forestry

165

179 New subparts 5 and 6 of Part 5 inserted 165
Subpart 5—Averaging accounting methodology

General provisions
194FA Interpretation for subpart 5 166
194FB Averaging accounting methodology 167
194FC Averaging accounting applies to carbon accounting areas

(averaging)
167

194FD First rotation forest and subsequent rotation forest 168

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Amendment Bill

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Carbon equivalent forest land swaps: applications
194GA Application for carbon equivalent forest land swap 169
194GB Criteria for carbon equivalent forest land swap 170
194GC Effect of approval of application to swap land 171

Carbon equivalent forest land swaps: approved swap
land

194HA Duration of approved swap land status 172
194HB Effect of being approved swap land 173
194HC Subsequent rotation forest 173
194HD Reconfiguration restrictions 173
194HE No transfers to permanent forestry 173

Carbon equivalent forest land swaps: release of approved
swap land

194JA Release criteria 174
194JB Notice of compliance with release criteria 175
194JC Liability to surrender units if release criteria not met 176
194JD Maximum liability and apportionment 177
194JE Release date unit balance report 177
194JF Effect on release date 178

Carbon equivalent forest land swaps: action if original
criteria not met

194KA EPA may take action if original criteria not met 179
194KB Effect of declaration after release date 180
194KC Remedial action: land substitution 180
194KD Criteria for land substitution 181
194KE Effect of land substitution 182

Regulations
194LA Regulations for averaging 183

Subpart 6—Temporary adverse events
194MA Interpretation for subpart 6 185

Application
194NA Application for temporary adverse event suspension 186
194NB Criteria of temporary adverse event suspension 187
194NC Approval of temporary adverse event suspension 187

Temporary adverse event land
194PA Duration of temporary adverse event land status 188
194PB Effect of being temporary adverse event land 189
194PC No liability or entitlement 189
194PD First rotation forest 189
194PE Reconfiguration restrictions 189

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194PF Damage to land turns out to be permanent 190
Re-establishment

194QA Re-establishment criteria 190
194QB Notice of achievement of re-establishment 190
194QC Effect on re-establishment date 192

Carbon recovery
194RA Carbon recovery criteria 193
194RB Notice when land achieves carbon recovery 193

Ceasing to be temporary adverse event land before
recovery

194SA Cancellation for breach of conditions 193
194SB Other circumstances causing land to cease to be

temporary adverse event land
194

194SC Consequences if land ceases to be temporary adverse
event land

194

Regulations
194TA Regulations for temporary adverse events 195

180 New sections 194UA to 194UC and cross-headings inserted 196
Input returns may be submitted before actual emissions

returns
194UA Input returns may be submitted for certain emissions

returns for forestry activities
197

194UB EPA may do calculations based on input return 197
194UC Regulations for input returns 197

Notification of status of forest land
181 Section 195 amended (Notification of status of forest land) 199
182 Sections 196 and 197 and cross-heading replaced 199

Forestry classifications of land
196A Meaning of forestry classification 199
196B EPA may give forestry classifications to areas of land 200
196C Effect of forestry classifications 200
196D Change of forestry classification to correct error 201
196E Change of forestry classification to update for changes 201
196F Forestry classification with effect before date

classification given
201

196G Regulations for forestry classifications 202
Grant-funded forests

197 Entitlement to units for removals from grant-funded
forests

203

197A Regulations for grant-funded forests 203

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183 Section 198 amended (Registration as participant by purchasers of
obligation fuel)

204

184 Section 202 amended (Activities added to Part 2 of Schedule 3) 204
185 Section 209 amended (Registration as participant by purchasers of

coal or natural gas)
204

186 New section 211A inserted (Effect of stockpiling coal by coal
importer or miner)

205

211A Effect of stockpiling coal by coal importer or miner 205
186A Section 213 amended (Participant in respect of subpart 4 of Part 5

of Schedule 3)
205

186B New sections 215 and 216 inserted 206
215 Ministers to report on alternative pricing system for farm-

level agriculture emissions
206

216 Regulations for voluntary reporting or surrender for
animals–farmer or fertiliser–farmer activity

206

187 Section 217 amended (Transitional provision for penalties) 207
187 Section 217 amended (Transitional provision for penalties) 207
188 Section 218 amended (Transitional provision for voluntary

reporting)
208

189 Section 219 amended (Transitional provision for mandatory
reporting by certain participants)

208

190 Sections 220 to 222 repealed 209
190 Sections 219 to 222 replaced 209

219 Transitional provision for surrender obligations of certain
participants

209

220 Commission to report on progress towards meeting farm-
level obligations

210

191 Section 222H amended (Transitional provision for unincorporated
bodies)

210

192 Section 233 amended (Rate of synthetic greenhouse gas levy) 210
192 Section 233 amended (Rate of synthetic greenhouse gas levy) 210
193 Sections 234 and 236 repealed 210
193 Section 234 repealed (Transitional provision for synthetic

greenhouse gas levy)
211

193A Section 236 amended (Maximum price of carbon for purpose of
levy calculation)

211

194 Section 243 amended (Circumstances where levy may be
refunded)

211

194A Section 244 amended (Exemptions from payment of synthetic
greenhouse gas levy)

211

194B Section 245 amended (Regulations specifying levy rates) 211
195 Section 246 amended (Regulations relating to synthetic greenhouse

gas levy)
211

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Amendment Bill

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195 Section 246 amended (Regulations relating to synthetic greenhouse
gas levy)

211

196 Section 247 amended (Process for making orders and regulations) 212
196 Section 247 repealed (Process for making orders and regulations) 212
197 Section 249 amended (Application of section 88 (Directions to

EPA))
212

198 Section 252 amended (Enforcement officers) 212
199 Section 257 amended (Power of entry for investigation, warrants,

etc)
212

200 Section 258 amended (Regulations relating to verifiers) 212
200 Section 258 amended (Regulations relating to verifiers) 212
200A Section 269 amended (Review of operation and effectiveness of

levy)
212

201 Section 270 amended (Appointment and conduct of independent
panel)

212

202 New Schedule 1AA inserted 212
202 Schedule 1AA amended 213
203 New Schedule 2A inserted 215
204 Schedule 3 amended 215
205 Schedule 4 amended 216
205A New Schedule 5 inserted 217

Subpart 2—Amendments that commence on 30 November 2020
206 Section 30G amended (Regulations relating to Part 2) 217
207 Section 183A amended (Certain applications not otherwise

permitted by section 183)
218

208 Section 186B amended (Criteria for approving offsetting forest
land applications)

218

209 Section 186H amended (Treatment of allocations in respect of
pre-1990 forest land that is offset)

218

209A Section 189 amended (Emissions returns for post-1989 forest land
activities)

218

209B Section 191 amended (Ceasing to be registered as participant in
respect of post-1989 forest land)

218

210 Section 189DA amended (Total liability or entitlement has effect,
and unit balance updated, when emissions return submitted)

218

211 Section 191AB amended (Effect of ceasing participation for whole
carbon accounting areas)

218

212 Section 191BB amended (Effect of ceasing participation for part
carbon accounting areas)

218

213 Section 194AA amended (EPA may act if persons fail to give
notice of transmitted interest)

219

214 Section 194DF amended (Liability to surrender units on transfer
from permanent forestry to standard forestry in carbon accounting
area (averaging))

219

Climate Change Response (Emissions Trading Reform)
Amendment Bill

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215 Section 194DG amended (Liability to surrender units on transfer
from standard forestry in carbon accounting area (averaging) to
permanent forestry)

219

216 Section 194EL amended (Removal of carbon accounting area from
permanent forestry)

219

217 Section 194FC amended (Averaging accounting applies to carbon
accounting areas (averaging))

219

218 Section 194GC amended (Effect of approval of application to swap
land)

219

219 Section 194JC amended (Liability to surrender units if release
criteria not met)

219

220 Section 194KB amended (Effect of declaration after release date) 219
221 Section 194KE amended (Effect of land substitution) 219
222 Schedule 1AA amended 219
222 Schedule 1AA amended 220

Subpart 3—Amendment that commences on 31 December 2020
223 Section 89 amended (EPA to publish certain information) 220

Subpart 3—Amendments that commence on 1 January 2021
222A Section 3A amended (Treaty of Waitangi (Te Tiriti o Waitangi)) 221
222B Section 3B amended (Consultation about certain regulations,

orders, and notices)
221

222C Section 4 amended (Interpretation) 221
222D New subpart 4 of Part 2 inserted 221

Subpart 4—Regulations setting price of carbon
30W Regulations setting price of carbon 221

223 Section 89 amended (EPA to publish certain information) 222
223A Section 120 amended (Amendment to emissions returns by EPA) 222
223B Section 123 amended (Effect of amendment or assessment) 223
223C Section 129 amended (Offences in relation to failure to comply

with various provisions)
223

223D Section 132 amended (Other offences) 223
223E Sections 134 to 136 replaced 223

134 Penalty for failing to surrender or repay units by due date 223
134A Penalty for failing to submit emissions return by due date 224
134B Penalty for failing to submit annual or closing allocation

adjustment by due date
226

134C Penalty for submitting incorrect emissions return 227
134D Penalty for providing incorrect information in allocation

application or adjustment
230

135 Date for payment of penalty 232
135A Deferred payment arrangements for payments of

penalties
232

136 Penalties are debt due to Crown 233

Climate Change Response (Emissions Trading Reform)
Amendment Bill

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223F Section 137 amended (Interest for late payment) 233
223G Section 138 amended (Obligation to pay penalty not suspended by

appeal)
233

223H Section 138A replaced (Penalties to be paid into Crown account) 234
138A Penalties to be paid into Crown account 234

223I Section 159 amended (Recovery of costs) 234
223J Section 179 amended (Forest land to be treated as deforested in

certain cases)
234

223K Section 181 amended (When deforestation to be treated as
occurring in respect of pre-1990 forest land)

235

223L Section 189 amended (Emissions returns for post-1989 forest land
activities)

235

223M Section 192 amended (Effect of transmission of interest in
post-1989 forest land)

235

223N Section 217 amended (Transitional provision for penalties) 236
223O Section 233 amended (Rate of synthetic greenhouse gas levy) 236
223P Section 236 repealed (Maximum price of carbon for purpose of

levy calculation)
236

223Q Schedule 1AA amended 236
Subpart 3A—Amendments that commence on 1 January 2022

223R Section 3A amended (Treaty of Waitangi (Te Tiriti o Waitangi)) 237
223S Section 3B amended (Consultation about certain regulations,

orders, and notices)
237

223T Section 4 amended (Interpretation) 238
223U Section 54 amended (Participants) 240
223V Section 56 amended (Registration as participant in respect of

activities listed in Schedule 3)
240

223W Section 57 amended (Applicant to be registered as participant in
respect of activities listed in Schedule 4)

241

223X Section 58 amended (Removal from register of participants in
respect of activities listed in Schedule 4)

241

223Y New section 59A inserted (Removal from register for persistent
non-compliance (standard forestry participants only))

241

59A Removal from register for persistent non-compliance
(standard forestry participants only)

241

223Z Section 60A amended (Exemption for participants in activity listed
in Part 1 of Schedule 4)

242

223ZA Section 62 amended (Monitoring of emissions and removals) 242
223ZB Section 63 amended (Liability to surrender units to cover

emissions)
242

223ZC Section 64 amended (Entitlement to receive New Zealand units for
removal activities)

243

223ZD Section 65 amended (Annual emissions returns) 243
223ZE Section 67 amended (Retention of emissions records) 243

Climate Change Response (Emissions Trading Reform)
Amendment Bill

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223ZF Section 89 amended (EPA to publish certain information) 244
223ZG Section 91 amended (Approval of unique emissions factors) 244
223ZH Section 92 amended (Recognition of verifiers) 244
223ZI Section 107 amended (Applications for emissions rulings) 244
223ZJ Section 109 amended (Making of emissions rulings) 244
223ZK Section 118 amended (Submission of final emissions returns) 244
223ZL Section 127 amended (Time bar for amendment of emissions

returns)
244

223ZM New section 128A and cross-heading inserted 244
Notices required from participants

128A EPA may act if participant fails to give notice 244
223ZN Section 134A amended (Penalty for failing to submit emissions

return by due date)
245

223ZO Section 134C amended (Penalty for submitting incorrect emissions
return)

245

223ZP Section 135A amended (Deferred payment arrangements for
payments of penalties)

246

223ZQ Section 136 amended (Penalties are debt due to Crown) 246
223ZR Section 137 amended (Interest for late payment) 246
223ZS Section 138 amended (Obligation to pay penalty not suspended by

appeal)
246

223ZT Section 138A amended (Penalties to be paid into Crown account) 246
223ZU Section 159 amended (Recovery of costs) 246
223ZV Section 163 amended (Regulations relating to methodologies and

verifiers)
246

223ZW Section 168 amended (Other regulations) 246
223ZX Section 169 amended (Incorporation by reference in certain

regulations)
247

223ZY Part 5 replaced 247
Part 5

Sector-specific provisions: forestry
Subpart 1—Deforestation

179 Forest land to be treated as deforested in certain cases 247
179A Forest land may not be treated as deforested in certain

cases
248

Subpart 2—Pre-1990 forest land
180 Participant in respect of pre-1990 forest land 249
181 When deforestation to be treated as occurring in respect

of pre-1990 forest land
249

183 Applications for exemption for land holdings of less than
50 hectares of pre-1990 forest land

250

Climate Change Response (Emissions Trading Reform)
Amendment Bill

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183A Certain applications not otherwise permitted by section
183

252

183B Applications for exemption for some Maori land or land
with 10 or more owners

253

184 Exemptions for deforestation of land with tree weeds 254
185 Effect of exemption 255
185A Regulations about exemptions for deforestation of land

with tree weeds
255

186 Methodology for pre-1990 forest land cleared in 8 years
or less

256

Subpart 3—P90 offsetting land
186AA Interpretation 257

P90 offset application
186BA Application to offset land for pre-1990 forest land 258
186BB Criteria for P90 offset application 258
186BC Effect of approval of P90 offset application 260
186BD Effect of P90 offset application being declined 260

Liability to surrender allocation
186CA Allocations for pre-1990 forest land to be surrendered

when application approved
261

Offsetting on P90 offset date
186DA P90 offset release criteria 261
186DB P90 release criteria notice 262
186DC Application to add area 2 (approved) land 264
186DD Criteria for adding area 2 (approved) land 265
186DE Effect of approval of application to add area 2 (approved)

land
265

186DF Effect of application to add area 2 (approved) land being
declined

266

186DG Land that must be identified as area 1 (not offset) land 267
186DH Extension of time to add area 2 (approved) land 267
186DI Effect on P90 offset date 268
186DJ Reimbursement of surrendered allocation 269

P90 offsetting land
186EA Participant in respect of P90 offsetting land 270
186EB Clearing or deforestation before required equivalence

date
270

186EC Clearing before required equivalence date 271
186ED Deforestation before required equivalence date 271
186EE P90 offsetting land becomes pre-1990 forest land 272

Climate Change Response (Emissions Trading Reform)
Amendment Bill

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Administrative matters
186FA P90 offsetting land register 272
186FB EPA to give information on request 273
186FC Regulations for P90 offsetting 273

Subpart 4—Post-1989 forest land (standard and
permanent forestry)

186K Standard and permanent forestry on post-1989 forest land 274
187 Conditions on registration as participant in certain

activities of standard or permanent forestry in respect of
post-1989 forest land

274

187A EPA to give public notice of criteria for assessing risk of
tree weed spread

276

188 Registration as participant in standard or permanent
forestry

276

188AC Notice to forestry participant if their registration added or
removed

278

188AD Notice to interested party if forestry participant’s
registration added or removed

278

188AA Removing registration as participant in standard or
permanent forestry

278

188AB Removing registration as participant in standard or
permanent forestry in certain natural events or clearance
for forest management

280

Provisional and final forestry emissions returns
189AA Provisional forestry emissions return in any year 280
189AB Final forestry emissions return at end of mandatory

emissions return period
281

189BA Preparing provisional or final forestry emissions return 281
Calculations for provisional and final forestry emissions

returns
189CA Gross liability or entitlement for each CAA1 in emissions

return
283

189CB Net liability or entitlement for each CAA1 in final
forestry emissions return

283

189CC Unit balance calculation for each CAA1 in emissions
return

284

189CD Total liability or entitlement for all CAA1s in emissions
return

284

Total liability or entitlement and unit balance has effect
for all emissions returns

189DA Total liability or entitlement has effect, and unit balance
updated, when emissions return submitted

284

Climate Change Response (Emissions Trading Reform)
Amendment Bill

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New unit balance report for certain applications or
notices

189EA New unit balance report 285
Maximum liability is unit balance of carbon accounting

area
190 Maximum liability is unit balance of carbon accounting

area
286

Ceasing participation in standard or permanent forestry
191AA Ceasing participation for whole carbon accounting areas 286
191AB Effect of ceasing participation for whole carbon

accounting areas
287

191BA Ceasing participation for part carbon accounting areas 287
191BB Effect of ceasing participation for part carbon accounting

areas
288

191CA If participant has never carried out activity in carbon
accounting area

289

Transmission of interest relating to standard or
permanent forestry

192 Transmission of interest in post-1989 forest land 289
193 Effect of transmission of interest in post-1989 forest land 294

Information about status of forest land
194 Information about status of forest land 294

Non-compliance for transmitted interests
194AA EPA may act if person fails to give notice of transmitted

interest
295

194AB How EPA may act 296
194AC EPA may attribute liability and entitlement to final

transferee after earlier non-compliant transmission
298

Application to reconfigure carbon accounting areas for
standard or permanent forestry

194CA Application to reconfigure carbon accounting areas for
standard or permanent forestry

299

194CB Criteria to reconfigure carbon accounting areas for
standard or permanent forestry

299

194CC Approval of application to reconfigure carbon accounting
areas for standard or permanent forestry

300

194CD Restriction start date of reconfigured carbon accounting
area for permanent forestry

300

Application to change activity on post-1989 forest land
194DA Application to change activity on post-1989 forest land 300

Climate Change Response (Emissions Trading Reform)
Amendment Bill

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194DB Criteria to change activity on post-1989 forest land 302
194DC Approval of application to change activity on post-1989

forest land
303

194DD Emissions return for application to change from PFSI
activity

304

194DE New unit balance report for application to change from
PFSI activity

304

194DEA Liability to surrender units on transfer from PFSI activity
to standard forestry in carbon accounting area (averaging)

305

194DF Liability to surrender units on transfer from permanent
forestry to standard forestry in carbon accounting area
(averaging)

306

194DG Liability to surrender units on transfer from standard
forestry in carbon accounting area (averaging) to
permanent forestry

306

Restrictions for permanent forestry land
194EA Permanent forestry period for land 307
194EB Restriction on ceasing to be registered for permanent

forestry
309

194EC Minister may approve removal of land from permanent
forestry

309

194ED Exception from prohibition on clear-felling and
deforestation

310

194EE Permanent forestry land must not be clear-felled 311
194EF Pecuniary penalty for clear-felling of permanent forestry

land
311

194EG Regulations for pecuniary penalty for clear-felling 312
194EH Permanent forestry land must not be deforested 312
194EI Pecuniary penalty for deforestation of permanent forestry

land
313

194EJ Due dates for payment of penalties and recovery of EPA’s
costs

314

194EK Option must be chosen at end of permanent forestry
period

314

194EL Removal of carbon accounting area from permanent
forestry

314

Subpart 5—Averaging accounting methodology
194FA Interpretation 315
194FB Averaging accounting methodology 315
194FC Averaging accounting applies to carbon accounting areas

(averaging)
316

194FD First rotation forest and subsequent rotation forest 317
194FE Regulations for averaging 318

Climate Change Response (Emissions Trading Reform)
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Subpart 6—P89 offsetting
194GAAInterpretation 319

P89 offset applications
194GA Application to offset land for land in carbon accounting

area (averaging)
320

194GB Criteria for P89 offset application 321
194GC Effect of approval of P89 offset application 322

P89 offsetting (approved) land
194HA Duration of P89 offsetting (approved) land status 323
194HB Effect of being P89 offsetting (approved) land 324
194HC Subsequent rotation forest 324
194HD Reconfiguration restrictions 324
194HE No transfers to permanent forestry 325

Offsetting on P89 offset date
194JA P89 offset release criteria 325
194JB P89 release criteria notice 326
194JC Liability to surrender units if P89 offset release criteria

not met
328

194JD Maximum liability and apportionment 328
194JE P89 offset date unit balance report 329
194JF Effect on P89 offset date 330

Action if criteria for initial P89 offset application not met
194KA EPA may take action if original criteria not met 331
194KB Effect of declaration after P89 offset date 332
194KC Remedial action: land substitution 332
194KD Criteria for land substitution 333
194KE Effect of approval of land substitution 334
194KF Effect of application to add area 2 (approved) land being

declined
335

Regulations
194LA Regulations for P89 offsetting 335

Subpart 7—Temporary adverse events
194MA Interpretation for this subpart 336

Application
194NA Application for temporary adverse event suspension 337
194NB Criteria of temporary adverse event suspension 339
194NC Approval of temporary adverse event suspension 339

Temporary adverse event land
194PA Duration of temporary adverse event land status 339
194PB Effect of being temporary adverse event land 340

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194PC No liability or entitlement 340
194PD First rotation forest 341
194PE Reconfiguration restrictions 341
194PF Damage to land turns out to be permanent 341

Re-establishment
194QA Re-establishment criteria 342
194QB Notice of achievement of re-establishment 342
194QC Effect on re-establishment date 343

Carbon recovery
194RA Carbon recovery criteria 344
194RB Notice when land achieves carbon recovery 344

Ceasing to be temporary adverse event land before
recovery

194SA Cancellation for breach of conditions 345
194SB Other circumstances causing land to cease to be

temporary adverse event land
345

194SC Consequences if land ceases to be temporary adverse
event land

346

Regulations
194TA Regulations for temporary adverse events 347

Subpart 8—General
Input returns may be submitted before actual emissions

returns
194UA Input returns may be submitted for certain emissions

returns for forestry activities
348

194UB EPA may do calculations based on input return 348
194UC Regulations for input returns 349

Notification of status of forest land
195 Notification of status of forest land 350

Forestry classifications of land
196A Meaning of forestry classification 351
196B EPA may give forestry classifications to areas of land 351
196C Effect of forestry classifications 352
196D Change of forestry classification to correct error 352
196E Change of forestry classification to update for changes 352
196F Forestry classification with effect before date

classification given
352

196G Regulations for forestry classifications 353

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Grant-funded forests
197 Entitlement to units for removals from grant-funded

forests
354

197A Regulations for grant-funded forests 354
223ZZ Schedule 1AA amended 355
223ZZA Schedule 3 amended 364
223ZZB Schedule 4 amended 364

Subpart 4—Amendments that commence by Order in Council or
on 1 January 2023

224 Section 2A amended (Application of Schedules 3 and 4) 364
225 Section 27 amended (Information accessible by search) 364
226 Section 89 amended (EPA to publish certain information) 364
227 Sections 178A and 178B repealed 365
228 Section 233 amended (Rate of synthetic greenhouse gas levy) 365
229 Schedule 1AA amended 365

Subpart 5—Amendments that commence on 1 January 2023
229A Schedule 4 amended 366

Part 2
Consequential amendments to other enactments

Subpart 1—Consequential amendments that commence on day
after Royal assent

230 Climate Change (Fishing Allocation Plan) Order 2010 revoked 366
231 Consequential amendments 366

Subpart 2—Consequential amendments that commence on
30 November 2020

232 Consequential amendments 366
Subpart 3—Consequential amendments that commence on

1 January 2021 2022
233 Consequential amendments 366

Subpart 4—Consequential Revocation and consequential
amendments that commence on 1 January 2022 2023

233A Forests (Permanent Forest Sink) Regulations 2007 revoked 366
234 Consequential amendments 367

Schedule 1
New Schedule 1AA inserted

368

Schedule 2
New Schedule 2A inserted

379

Schedule 2A
New Schedule 5 inserted

398

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Schedule 3
Consequential amendments that commence on day after Royal

assent

399

Schedule 4
Consequential amendments that commence on 30 November

2020

406

Schedule 5
Consequential amendments that commence on 1 January 2021

2022

408

Schedule 6
Consequential amendments that commence on 1 January 2022

2023

409

Schedule 7
New Schedule 1AA inserted in Forests Act 1949

410

The Parliament of New Zealand enacts as follows:

1 Title
This Act is the Climate Change Response (Emissions Trading Reform)
Amendment Act 2019.

2 Commencement 5
(1) This Act comes into force as follows:

(a) subpart 1 of Part 1 and subpart 1 of Part 2 come into force on the
day after Royal assent:

(b) subpart 2 of Part 1 and subpart 2 of Part 2 come into force on
30 November 2020: 10

(c) subpart 3 of Part 1 comes into force on 31 December 2020:
(d) subpart 3 of Part 2 comes into force on 1 January 2021:
(c) subpart 3 of Part 1 comes into force on 1 January 2021:
(d) subpart 3A of Part 1 and subpart 3 of Part 2 come into force on

1 January 2022: 15
(e) subpart 4 of Part 2 comes into force on 1 January 2022:
(f) subpart 4 of Part 1 comes into force—

(i) on a single date set by Order in Council; or
(ii) otherwise, on 1 January 2023.
(ii) on 1 January 2023, if an earlier date has not been set: 20

(g) subpart 5 of Part 1 and subpart 4 of Part 2 come into force on
1 January 2023.

cl 1
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(2) If an auction is to be conducted under section 6A of the principal Act in the
period starting on the day after Royal assent and ending on 31 December 2022,
the Minister must recommend the making of an Order in Council that sets the
single date on which subpart 4 of Part 1 comes into force as the date of that
first auction. 5

3 Principal Act
This Act amends the Climate Change Response Act 2002 (the principal Act).

Part 1
Amendments to principal Act

Subpart 1—Amendments that commence on day after Royal assent 10

4 Section 2A amended (Application of Schedules 3 and 4)
(1AA) In section 2A(1)(a)(ii), after “Schedule 3”, insert “(for fertiliser–farmer or ani-

mals–farmer activities)”.
(1) In section 2A(1)(b), replace “221” with “219”.
(2) In section 2A(3), delete “Subpart 1 of”. 15
(3) In section 2A(4), before “Part 3”, insert “Subpart 1 of”.
(4) Replace section 2A(5) with:
(5) Subpart 1 of Part 5 of Schedule 3 applies—

(a) on and after 1 January 2011, except in relation to surrender obligations;
and 20

(b) on and after 1 January 2025 in relation to surrender obligations.
(4) Replace section 2A(5) and (6) with:
(5A) Subpart 1 of Part 5 of Schedule 3 (for fertiliser–processor activities)—

(a) applies on and after 1 January 2011; but
(b) is affected by section 219, which provides that emissions released dur- 25

ing the following excluded period do not require units to be surrendered:
the period—
(i) starting on 1 January 2011; and
(ii) ending on a date determined by that section (which may be

31 December 2024 or another date as early as 1 July 2022). 30
(5B) Subpart 2 of Part 5 of Schedule 3 (for fertiliser–farmer activities)—

(a) applies on and after a date appointed by the Governor-General by Order
in Council (see section 2B); but

(b) is affected by section 219, which provides that emissions released dur-
ing the following excluded period do not require units to be surrendered: 35

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29



the first year in which that subpart applies to the persons, or class of per-
sons, carrying out that activity.

(5C) Subpart 3 of Part 5 of Schedule 3 (for animals–processor activities)—
(a) applies on and after 1 January 2011; but
(b) is affected by section 219, which provides that emissions released dur- 5

ing the following excluded period do not require units to be surrendered:
the period—
(i) starting on 1 January 2011; and
(ii) ending on a date determined by that section (which may be

31 December 2024 or another date as early as 1 July 2022). 10
(5D) Subpart 4 of Part 5 of Schedule 3 (for animals–farmer activities)—

(a) applies on and after 1 January 2024 or a later date appointed by the
Governor-General by Order in Council (see section 2B); but

(b) is affected by section 219, which provides that emissions released dur-
ing the following excluded period do not require units to be surrendered: 15
the first year in which that subpart applies to the persons, or class of per-
sons, carrying out that activity.

(5) Replace section 2A(9) with:
(9) Subpart 4 of Part 5 of Schedule 3 applies—

(a) on and after 1 January 2024, except in relation to surrender obligations; 20
and

(b) on and after 1 January 2025 in relation to surrender obligations.
(5) Replace section 2A(8) and (9) with:
(8) Part 1A of Schedule 4 applies on and after 1 January 2022.

5 Section 2B amended (Orders in Council in relation to Part 5 of Schedule 3) 25
In section 2B(3)(c)(ii), replace “greenhouse gas emissions trading scheme
established under this Act” with “emissions trading scheme”.

6 Section 2C amended (Effect of Orders in Council in relation to Part 5 of
Schedule 3)

(1) Replace section 2C(1) with: 30
(1) This section applies—

(a) to subparts 1 and 2 of Part 5 of Schedule 3 at any time that those sub-
parts apply at the same time (because of an Order in Council made under
section 2A(8)); and

(b) to subparts 3 and 4 of Part 5 of Schedule 3 on and from 1 January 2024. 35
(2) Replace section 2C(4) with:

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(4) If an Order in Council is made under section 2A(8) that has the effect of apply-
ing subpart 2 of Part 5 of Schedule 3 to all persons who carry out an activity
listed in that subpart from a date appointed in that order, then section 2A(5)
and subpart 1 of Part 5 of Schedule 3 expire and are repealed on the date from
which all persons carrying out an activity listed in subpart 2 of Part 5 of Sched- 5
ule 3 are liable to surrender units in respect of emissions from the activity.

(4A) Section 2A(6) and subpart 3 of Part 5 of Schedule 3 expire and are repealed on
1 January 2025.

(3) In section 2C(5), replace “or (4)(a) or (b)” with “, (4), or (4A)”.

5 Sections 2B and 2C replaced 10
Replace sections 2B and 2C with:

2B Orders in Council in relation to subparts 2 and 4 of Part 5 of Schedule 3
(Agriculture)

(1) This section relates to an Order in Council made under section 2A(5B) or
(5D), which appoints a date on and after which subpart 2 or 4 of Part 5 of 15
Schedule 3 (the subpart) applies (for fertiliser–farmer or animals–farmer
activities).

(2) The order must—
(a) be made on the recommendation of the Minister; and
(b) appoint a date that is 1 January in a year; and 20
(c) be made at least 1 year before the date appointed by the order.

(3) The order may provide that the subpart applies, on and after the date appointed
by the order,—
(a) specifically to 1 or more classes of person who carry out an activity

listed in the subpart; or 25
(b) generally to all persons who carry out an activity listed in the subpart.

(4) Before recommending the making of the order, the Minister must comply with
subsections (5) and (6).

(5) The Minister must have regard to—
(a) the need for the EPA to be able to verify information contained in emis- 30

sions returns of the persons who will become participants in an activity
listed in the subpart by operation of the order; and

(b) the likelihood that, as a result of becoming participants by operation of
the order, persons carrying out an activity listed in the subpart will
reduce their emissions; and 35

(c) the desirability of minimising—

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(i) the compliance and administration costs of persons who will
become participants in an activity listed in the subpart by oper-
ation of the order; and

(ii) the administration costs of the Crown in administering the emis-
sions trading scheme. 5

(6) The Minister must consult, or be satisfied that the chief executive has consul-
ted, the persons (or representatives of those persons) that appear to the con-
sulter likely to have an interest in the order.

2C Effect of overlapping application of subparts of Part 5 of Schedule 3
(Agriculture) 10

(1) This section applies—
(a) to the fertiliser–processor and fertiliser–farmer subparts (of Part 5 of

Schedule 3) at any time that those subparts apply at the same time
(because of an Order in Council made under section 2A(5B)); and

(b) to the animals–processor and animals–farmer subparts (of Part 5 of 15
Schedule 3) on and after—
(i) 1 January 2024; or
(ii) if an Order in Council is made under section 2A(5D), the date

appointed in that order.
(2) If this section applies, then regulations made under section 163(1) may 20

require—
(a) a person carrying out a fertiliser–processor activity and a person carrying

out a fertiliser–farmer activity to—
(i) collect data or other information relating to the same synthetic fer-

tiliser; and 25
(ii) calculate emissions relating to the same synthetic fertiliser; or

(b) a person carrying out an animals–processor activity and a person carry-
ing out an animals–farmer activity to—
(i) collect data or other information relating to the same ruminant

animals, pigs, horses, or poultry; and 30
(ii) calculate emissions relating to the same ruminant animals, pigs,

horses, or poultry.
(3) However,—

(a) on and after the first day in respect of which the person carrying out a
fertiliser–farmer activity is required to surrender units for emissions 35
relating to the fertiliser, this Act no longer applies to the person carrying
out the fertiliser–processor activity in relation to that fertiliser; and

(b) on and after the first day in respect of which the person carrying out an
animals–farmer activity is required to surrender units for emissions relat-

Part 1 cl 5
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ing to the ruminant animals, pigs, horses, or poultry, this Act no longer
applies to the person carrying out the animals–processor activity in rela-
tion to those ruminant animals, pigs, horses, or poultry.

(4) If an Order in Council is made under section 2A(5B) that has the effect of
applying the fertiliser–farmer subpart to all persons who carry out a fertiliser– 5
farmer activity, then section 2A(5A) and the fertiliser–processor subpart
expire and are repealed on the first day in respect of which emissions from all
persons carrying out a fertiliser–farmer activity may result in liability to surren-
der units.

(5) On the first day on which, under section 2A(5D), the animals–farmer subpart 10
applies to all persons who carry out an animals–farmer activity, and emissions
from all persons carrying out the activity may result in liability to surrender
units, section 2A(5C) and the animals–processor subpart expire and are
repealed.

(6) If, by operation of subsection (3), (4), or (5), this Act no longer applies to a 15
person carrying out a fertiliser–processor or animals–processor activity, then—
(a) section 54(4) applies, with any necessary modifications, to any person

who has ceased, by operation of that subsection, to be a participant in
respect of that activity; and

(b) the person is not required to comply with section 59, but the EPA may, 20
for the purposes of section 59(2), determine that the person has ceased to
carry out the activity.

(7) In this section and sections 2A, 2B, 216, and 219,—
animals–farmer subpart means subpart 4 of Part 5 of Schedule 3, and ani-
mals–farmer activity means an activity listed in that subpart 25
animals–processor subpart means subpart 3 of Part 5 of Schedule 3, and ani-
mals–processor activity means an activity listed in that subpart
fertiliser–farmer subpart means subpart 2 of Part 5 of Schedule 3, and fertil-
iser–farmer activity means an activity listed in that subpart
fertiliser–processor subpart means subpart 1 of Part 5 of Schedule 3, and fer- 30
tiliser–processor activity means an activity listed in that subpart.

7 Section 3 amended (Purpose)
(1) In section 3(1)(a), replace “and the Protocol” with “, the Protocol, and the Paris

Agreement”.
(2) In section 3(1)(a)(i), after “period”, insert “starting on 1 January 2008 and end- 35

ing on 31 December 2012”.
(3) In section 3(1)(a)(ii), replace “Article 7 of the Protocol and Article 12 of the

Convention” with “Article 12 of the Convention, Article 7 of the Protocol, and
Article 13.7 of the Paris Agreement”.

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(4) In section 3(1)(b)(i) and (c)(i), replace “and the Protocol” with “, the Protocol,
and the Paris Agreement”.

(5) Replace section 3(1)(b)(ii) with:
(ii) assisting New Zealand to meet its 2050 target and emissions

budgets; and 5
(6) In section 3(1)(c)(i), replace “and the Protocol” with “, the Protocol, and the

Paris Agreement”.
(7) Replace section 3(1)(c)(ii) with:

(ii) assisting New Zealand to meet its 2050 target and emissions
budgets. 10

(8) Repeal section 3(3).

8 Section 3A amended (Treaty of Waitangi (Te Tiriti o Waitangi))
(1) Replace section 3A(a) to (c) with:

(a) with respect to the following sections (which relate to powers to make
regulations or Orders in Council), before recommending the making of a 15
regulation or an order under those sections, the Minister must consult, or
be satisfied that the chief executive has consulted, representatives of iwi
and Māori that appear to the Minister or chief executive likely to have an
interest in the regulation or order:
(i) section 2B (Part 5 of Schedule 3): 20
(ii) section 30G(1)(b)(i), (c), (j), and (k) (Part 2—institutional

arrangements):
(iii) section 30GA (auctions to sell New Zealand units):
(iv) section 30GB (overall limits and price controls for units):
(v) section 30GD (auction monitor): 25
(vi) section 30M (infringement notices):
(vii) section 30W(1)(a) (price of carbon):
(viii) section 50(2) and (3) (Part 3—inventory agency):
(ix) section 60 (exemptions in respect of activities listed in Schedule

3): 30
(x) section 60A (exemptions for participants in standard forestry or

permanent forestry):
(xi) section 84A (phase-out rates):
(xii) section 161A (eligible industrial activities):
(xiii) section 161G (eligible agricultural activities): 35
(xiv) section 162 (adding further activity to Part 2 of Schedule 4):
(xv) section 163 (methodologies and verifiers):

Part 1 cl 8
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(xvi) section 164 (unique emissions factors):
(xvii) section 185A (exemptions for deforestation of land with tree

weeds):
(xviii) section 186F (pre-1990 offsetting forest land):
(xix) section 194EG (pecuniary penalty for clear-felling): 5
(xx) section 194LA (averaging):
(xxi) section 194TA (temporary adverse event suspensions):
(xxii) section 194UC (input returns):
(xxiii) section 196G (forestry classifications):
(xxiv) section 225 (targets): 10
(xxv) section 244 (exemptions from payment of synthetic greenhouse

gas levy):
(xxvi) section 246(1)(a) to (e) (synthetic greenhouse gas levy):
(xxvii) section 258 (verifiers):

(2) Repeal section 3A(e) to (h) and (j). 15

8 Section 3A amended (Treaty of Waitangi (Te Tiriti o Waitangi))
(1) Repeal section 3A(a).
(2) Replace section 3A(b) and (c) with:

(a) with respect to the following provisions (which relate to powers to make
regulations or Orders in Council or to give notice in the Gazette), before 20
recommending the making of regulations or an order, or giving notice in
the Gazette, under those provisions, the Minister must consult, or be
satisfied that the chief executive has consulted, representatives of iwi
and Māori that appear to the Minister or chief executive likely to have an
interest in the regulations, order, or notice: 25
(i) section 2A(5B) or (5D) (Part 5 of Schedule 3):
(ii) section 30G(1)(b)(i), (c), (j), and (k) (Part 2—institutional

arrangements):
(iii) section 30GA (auctions to sell New Zealand units):
(iv) section 30GB (limits and price controls for units): 30
(v) section 30GD (auction monitor):
(vi) section 30M (infringement offences):
(vii) section 60 (exemptions in respect of activities listed in Schedule

3):
(viii) section 60A (exemptions for participants in activity listed in Part 35

1 of Schedule 4):

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(ix) section 84A or 84B (phase-out rates for eligible industrial activ-
ities):

(x) section 161D(1)(a) (notice specifying description of activity in
relation to industrial allocations), unless the only purpose of the
notice is to require persons to provide electricity-related contracts 5
or any information related to those contracts:

(xi) section 161G (eligible agricultural activities):
(xii) section 162 (adding further activity to Part 2 of Schedule 4):
(xiii) section 163 (methodologies and verifiers):
(xiv) section 164 (unique emissions factors): 10
(xv) section 168(1)(nc) (New Zealand’s best practice forest manage-

ment):
(xvi) section 186F (pre-1990 offsetting forest land):
(xvii) section 194UC (input returns):
(xviii) section 196G (forestry classifications): 15
(xix) section 244 (exemptions from payment of synthetic greenhouse

gas levy):
(xx) section 246(1)(a) to (e) (synthetic greenhouse gas levy):
(xxi) section 258 (verifiers):

(3) Repeal section 3A(e) to (j). 20

8A New section 3B inserted (Consultation about certain regulations, orders,
and notices)
After section 3A, insert:

3B Consultation about certain regulations, orders, and notices
(1) The Minister must comply with this section before recommending the making 25

of regulations or an Order in Council, or giving notice in the Gazette, under
any of the following:
(a) section 30G(1)(b)(i), (c), (j), or (k) (dealings with units under Part 2):
(b) section 30GA (auctions to sell New Zealand units):
(c) section 30GB (limits and price controls for units): 30
(d) section 30GD (auction monitor):
(e) section 30M (infringement offences):
(f) section 60 (exemptions in respect of activities listed in Schedule 3),

unless the Crown has signed a negotiated greenhouse agreement with the
person exempted: 35

(g) section 60A (exemptions for participants in activity listed in Part 1 of
Schedule 4):

Part 1 cl 8A
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(h) section 84A or 84B (phase-out rates for eligible industrial activities):
(i) section 161D(1)(a) (notice specifying description of activity in relation

to industrial allocations), unless the only purpose of the notice is—
(i) to require persons to provide electricity-related contracts or any

information related to those contracts; or 5
(ii) to provide the Minister with the information necessary to deter-

mine whether any matter should be considered by a review under
section 160:

(j) section 161G(1)(a)(ii) (allocative baseline of eligible agricultural activ-
ity): 10

(k) section 162 (adding further activity to Part 2 of Schedule 4):
(l) section 163 (methodologies and verifiers):
(m) section 164 (unique emissions factors):
(n) section 168(1)(nc) (New Zealand’s best practice forest management):
(o) section 186F (pre-1990 offsetting forest land): 15
(p) section 194UC (input returns):
(q) section 196G (forestry classifications):
(r) section 216 (voluntary reporting or surrender for animals–farmer or

fertiliser–farmer activity):
(s) section 233(4)(a) (methodology for specifying price of carbon): 20
(t) section 244 (exemptions from payment of synthetic greenhouse gas

levy):
(u) section 246(1)(a) to (e) (synthetic greenhouse gas levy):
(v) section 258 (verifiers).

(2) The Minister must also comply with this section before recommending the 25
revocation of an Order in Council under section 60, 60A, or 244 (exemptions
for various matters).

(3) The Minister must be satisfied that 1 of the following has consulted the persons
(or representatives of those persons) that appear to the consulter likely to be
substantially affected by any regulations made in accordance with the recom- 30
mendation, by any order made or revoked in accordance with the recommenda-
tion, or by the notice:
(a) the Minister or the chief executive; or
(b) for regulations made under section 30GB, 84A, or 84B, the Minister,

the chief executive, or the Climate Change Commission. 35
(4) The process for consultation must, to the extent practicable in the circum-

stances, include—

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(a) adequate and appropriate notice of the proposed terms of the recommen-
dation or notice, and of the reasons for it; and

(b) a reasonable opportunity for interested persons to consider the recom-
mendation or notice and make submissions; and

(c) adequate and appropriate consideration of submissions. 5
(5) This section does not apply to regulations made under the following if the Min-

ister considers it is in the national interest that the regulations be made
urgently:
(a) section 30G(1)(b)(i), (c), (j), or (k) (dealings with units under Part 2):
(b) section 30GA (auctions to sell New Zealand units): 10
(c) section 30GB (limits and price controls for units):
(d) section 30GD (auction monitor).

(6) A failure to comply with this section does not affect the validity of any regula-
tions, order, or notice to which it applies.

9 Section 4 amended (Interpretation) 15
(1) In section 4(1), repeal the definitions of allocation plan, approved overseas

unit, assigned amount unit, Australian eligible industrial activity, carbon
accounting area, carbon dioxide equivalent, carry-over, CDM registry,
certified emission reduction unit, clean development mechanism project,
clear, commitment period reserve, conversion account, convert, deforest, 20
designated operational entity, elect, eligible land, emission reduction unit,
emissions budget period, emissions return, executive board, expire or
expiry, first commitment period, fishing allocation plan, greenhouse gas,
initial assigned amount, international transaction log, joint implementa-
tion project, Kyoto units, long-term certified emission reduction replace- 25
ment account, long-term certified emission reduction unit, New Zealand
Greenhouse Gas Inventory, non-compliance cancellation account, overseas
registry, Paris Agreement, Party, post-1989 forest land, pre-1990 forest
land allocation plan, previous commitment period, relevant commitment
period, removal activity, removal unit, retire, retirement account, sink 30
cancellation account, subsequent commitment period, supervisory com-
mittee, temporary certified emission reduction replacement account, tem-
porary certified emission reduction unit, and unit.

(2) In section 4(1), insert in their appropriate alphabetical order:
approved overseas unit means a unit, other than a New Zealand unit, that is— 35
(a) issued (as defined by this section); and
(b) prescribed as a unit that may be transferred to accounts in the Registry
auction means an auction to sell New Zealand units under section 6A

Part 1 cl 9
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carbon accounting area means an area of post-1989 forest land—
(a) that—

(i) is defined by a person who is registered, or has applied to register,
as a participant under section 57 in relation to an activity of stand-
ard forestry or permanent forestry; and 5

(ii) meets any relevant criteria specified in regulations made under
this Act; or

(b) that is constituted as a carbon accounting area by a provision of this Act
carbon accounting area (averaging) has the meaning given by section
194FC(3) 10
carbon dioxide equivalent, in relation to a greenhouse gas, means the amount
of carbon dioxide (in tonnes) that would produce the same global warming as
the amount of that gas, calculated in accordance with international climate
change obligations
clear,— 15
(a) in relation to a tree,—

(i) includes—
(A) to fell, harvest, burn, remove by mechanical means, spray

with a herbicide intended to kill the tree, or undertake any
other form of human activity that kills the tree; and 20

(B) to fell, burn, kill, uproot, or destroy by a natural cause or
event; but

(ii) does not include to prune or thin; and
(b) in relation to land, means to clear (as defined in paragraph (a)) the for-

est species that are on the land 25
clear-felled, in relation to an area of land, means an area—
(a) of at least 1 hectare; and
(b) on which any trees are cleared or killed by any form of human activity,

including by felling, harvesting, burning, removing by mechanical
means, or spraying with a herbicide intended to kill the tree; and 30

(c) that, after that type of clearing or killing, has tree crown cover from for-
est species of 30% or less in each hectare

Climate Change Commission means an independent body to be established
by the Minister to advise the Minister on matters relating to reducing New Zea-
land’s emissions 35
constitution date, in relation to a carbon accounting area, means,—
(a) for a carbon accounting area that is defined in an application referred to

in section 188(1), the date the applicant’s registration takes effect under
section 57(8); or

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(b) for a carbon accounting area that a participant applies to add under sec-
tion 188(3), the date of the notice given under section 188(6)(b)(ii);
or

(c) for any other carbon accounting area, the date on which a person
becomes a participant in an activity on the carbon accounting area under 5
a provision of Part 5

deforest, in relation to forest land,—
(a) means to convert forest land to land that is not forest land (see section

181, for example); and
(b) includes deforestation after forest land is cleared, where section 179 10

applies
emissions budget means the quantity of emissions that will be permitted in
each emissions budget period as a net amount of carbon dioxide equivalent
emissions budget period means a 5-year period in the years 2022 to 2050
(except that the period 2022 to 2025 is a 4-year period) 15
emissions budget period means a 5-year period, except for the first 4-year
period in the years 2022 to 2025, as specified in section 5X(3)
emissions return—
(a) means—

(i) an annual emissions return submitted under section 65; or 20
(ii) a quarterly emissions return submitted under section 66; or
(iii) a final emissions return submitted under section 118; or
(iv) an emissions return submitted under a provision of Part 5 or

Schedule 1AA; and
(b) includes the following as if they had been submitted in that form: 25

(i) an emissions return as amended by the EPA under section 120;
and

(ii) the EPA’s assessment under section 121 of the matters that should
have been in an emissions return; and

(c) includes an emissions return that shows nil liability 30
emissions trading scheme means (except in section 3) the greenhouse gas
emissions trading scheme established under this Act
ETS participant provisions means Parts 4 to 5D of this Act
forest sink covenant means a forest sink covenant that is or was registered
against land under section 67ZD of the Forests Act 1949 35
forestry activity means—
(a) an activity listed in Part 1 or 1A of Schedule 3 (deforesting certain

pre-1990 forest land or pre-1990 offsetting forest land); or

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(b) an activity listed in Part 1 or 1A of Schedule 4 (standard forestry or per-
manent forestry on post-1989 forest land)

(b) an activity listed in Part 1 of Schedule 4 (forestry on post-1989 forest
land)

forestry classification has the meaning given by in section 196A 5
greenhouse gas means—
(a) carbon dioxide (CO2):
(b) methane (CH4):
(c) nitrous oxide (N2O):
(d) any hydrofluorocarbon: 10
(e) any perfluorocarbon:
(f) sulphur hexafluoride (SF6)
international climate change obligations means New Zealand’s international
obligations under the Convention, the Protocol, or the Paris Agreement
international transaction body means a prescribed body that confirms the 15
validity of transactions relating to accounting of greenhouse gas emissions
issued, in relation to an approved overseas unit, means—
(a) issued by an overseas registry; or
(b) issued in another way and approved by an international transaction body
mandatory emissions return period means any of the following periods: 20
(a) the first commitment period starting on 1 January 2008 and ending on

31 December 2012:
(b) the 5-year period starting on 1 January 2013 and ending on 31 December

2017:
(c) the 5-year period starting on 1 January 2018 and ending on 31 December 25

2022:
(d) the 3-year period starting on 1 January 2023 and ending on 31 December

2025:
(e) the 5-year period starting on 1 January 2026 and ending on 31 December

2030: 30
(f) each consecutive 5-year period after that
New Zealand Greenhouse Gas Inventory means the reports that are required
under Articles 4 and 12 of the Convention, Article 7.1 of the Protocol, and Art-
icle 13.7 of the Paris Agreement and that are prepared in accordance with sec-
tion 32(1) 35
overseas registry means a prescribed overseas registry from which or to which
units may be transferred to or from accounts in the Registry

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Paris Agreement—
(a) means the Paris Agreement (under the Convention) done at Paris on

12 December 2015, a copy of the English text of which is set out in
Schedule 2A; and

(b) includes any amendments made to the Paris Agreement that are, or will 5
become, binding on New Zealand from time to time

permanent forestry has the meaning given by section 186K
post-1989 forest land means forest land that—
(a) is one of the following:

(i) land that was not forest land on 31 December 1989: 10
(ii) land that was forest land on 31 December 1989 but was deforested

in the period beginning on 1 January 1990 and ending on
31 December 2007:

(iii) land that was pre-1990 forest land, other than exempt land,—
(A) that was deforested on or after 1 January 2008; and 15
(B) in respect of which any liability to surrender units arising in

relation to an activity listed in Part 1 of Schedule 3 has been
satisfied:

(iv) land that was pre-1990 forest land, other than exempt land, that
was deforested on or after 1 January 2013 and offset by pre-1990 20
offsetting forest land:

(v) land that was pre-1990 offsetting forest land that was deforested
after 1 January 2013 and in respect of which any liability to sur-
render units arising in relation to an activity listed in Part 1A of
Schedule 3 has been satisfied: 25

(vi) land that was exempt land—
(A) that has been deforested; and
(B) in respect of which the number of units that would have

been required to be surrendered in relation to an activity
listed in Part 1 of Schedule 3, had the land not been exempt 30
land, have been surrendered under section 187(2):

(vii) land that was exempt land that has been deforested more than 8
years ago; and

(b) is not offsetting forest land or pre-1990 offsetting forest land
pre-1990 forest land allocation plan means the allocation plan issued under 35
section 70 in respect of pre-1990 forest land
removal activity means—
(a) an activity of standard forestry or permanent forestry (on post-1989 for-

est land); or

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(b) an activity that is listed in Part 2 of Schedule 4 (other removal activities)
standard forestry has the meaning given by section 186K
temporary adverse event land has the meaning given in section 194MA(1)
unit means a New Zealand unit or an approved overseas unit

(3) In section 4(1), definition of account number, replace “section 15(1)(a)” with 5
“section 15(1)”.

(4) In section 4(1), definition of eligible person, replace paragraph (d) with:
(d) the pre-1990 forest land allocation plan

(5) In section 4(1), definition of emissions return, replace paragraph (a)(iv) with:
(iv) an emissions return submitted under a provision of Part 5 or 10

Schedule 1AA; and
(6) In section 4(1), definition of emissions return, replace paragraph (b) with:

(b) includes the following as if they had been submitted in that form:
(i) an emissions return as amended by the EPA under section 120;

and 15
(ii) the EPA’s assessment under section 121 of the matters that should

have been in an emissions return; and
(c) includes an emissions return that shows nil liability

(7) In section 4(1), definition of exempt land, replace paragraph (a)(i) and (ii)
with: 20

(i) under section 183 or 183B; or
(ii) under section 184, as long as the EPA has not declared otherwise

(because a requirement or condition has been breached); but
(8) In section 4(1), definition of general cancellation account, delete “other than

sink activities being a source of emissions or a determination that New Zealand 25
is not in compliance with Article 3.1 of the Protocol”.

(9) In section 4(1), definition of holding account, delete “that have not been
retired, surrendered, converted, or cancelled”.

(10) In section 4(1), definition of surrender, replace “section 18CA(3) or (4)” with
“section 18CA(2)”. 30

(11) In section 4(1), definition of tree weed, replace “a tree” with “a forest species”.
(12) In section 4(2), replace “or Protocol” with “, the Protocol, or the Paris Agree-

ment” in each place.
(13) In section 4(6), replace “sections 62, 65, 66, 67, 118, 187, 189, 191, 192, and

193, activity or activities, in relation to a participant who submits an emissions 35
return that shows nil liability,” with “a provision of this Act that relates to a
participant who submits an emissions return that shows nil liability, activity or
activities”.

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10 New sections 4A and 4B inserted section 4AA inserted (Greenhouse gas
definition may be amended to add gases)
After section 4, insert:

4A4AA Greenhouse gas definition may be amended to add gases
(1) The Governor-General may, by Order in Council made on the recommendation 5

of the Minister,—
(a) amend the definition of greenhouse gas in section 4 to add 1 or more

other gases; and
(b) if necessary, amend Schedule 1AA to set out transitional provisions for

the addition. 10
(2) The Minister must not make a recommendation recommend the making of an

order unless the Minister is satisfied that New Zealand has international cli-
mate change obligations in relation to the additional gas or gases.

4B Transitional, savings, and related provisions
The transitional, savings, and related provisions set out in Schedule 1AA have 15
effect according to their terms.

10A Section 5D amended (Membership of Commission)
Replace section 5D(1)(c) with:
(c) no fewer than 3, and no more than 7, other members.

10B Section 5J amended (Commission’s functions) 20
(1) After section 5J(f), insert:

(fa) to make recommendations to the Minister about limits and price control
settings for units (see section 5ZOA):

(fb) to make recommendations to the Minister about decreased or increased
phase-out rates (see section 5ZOB): 25

(2) After section 5J(h), insert:
(ha) to provide advice to the Minister (as required by section 220) on the

progress that has been made towards—
(i) meeting the primary sector climate change commitments set out in

Schedule 5; and 30
(ii) participants in the activities listed in subpart 4 of Part 5 of Sched-

ule 3 (for animals–farmer participants) being ready to start com-
plying with reporting and surrender obligations under this Act:

10C Section 5N amended (Consultation)
Replace section 5N(2)(a) with: 35

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(a) make publicly available, and invite submissions on, discussion papers
and draft reports; and

10D Section 5ZG amended (Requirement for emissions reduction plan)
Replace section 5ZG(2) with:

(2) The plan must be prepared and made publicly available by the deadlines speci- 5
fied in section 5ZI.

10E Section 5ZI amended (Minister to prepare and make emissions reduction
plan publicly available)

(1) Replace section 5ZI(2) with:
(2) The Minister must— 10

(a) prepare the plan after the relevant emissions budget has been notified
under section 5ZD; but

(b) do the following at least 12 months before the commencement of the
budget period:
(i) publish the plan in the Gazette; and 15
(ii) make the plan publicly available; and
(iii) present a copy of the plan to the House of Representatives.

(2A) However, for the plan for the first emissions budget period, the Minister—
(a) may prepare the plan before the relevant emissions budget has been noti-

fied under section 5ZD; and 20
(b) must do the following before the commencement of the budget period:

(i) publish the plan in the Gazette; and
(ii) make the plan publicly available; and
(iii) present a copy of the plan to the House of Representatives.

(2) Repeal section 5ZI(4). 25

10F Section 5ZL amended (Commission to report at end of emissions budget
period)

(1) In section 5ZL(1), replace “in the next emissions budget” with “for that”.
(2) Replace section 5ZL(1)(c) with:

(c) an assessment of the amount of offshore mitigation required to meet the 30
emissions budget for that period, taking into account the limit proposed
by the Commission under section 5ZA(1)(e).

10G New subpart 6 of Part 1B inserted
After section 5ZO, insert:

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Subpart 6—Recommendations about making regulations

5ZOA Recommendations about limits and price control settings for units
(1) This section applies after the Minister has set the first emissions budget.
(2) The Commission must recommend to the Minister limits and price control set-

tings, including any desirable emissions price path, each time the Minister is 5
required to recommend the making of regulations under section 30GB.

(3) The Commission’s recommendations must—
(a) cover the limits and price control settings for each year that the Minis-

ter’s recommendation must cover; and
(b) be made in accordance with— 10

(i) the same requirements under sections 30GB and 30GC (except
section 30GC(5)(e)) that apply to the making of the Minister’s
recommendations; and

(ii) its other duties (see sections 5M to 5O, for example); and
(c) be given to the Minister a reasonable time before the Minister is required 15

to recommend the making of the regulations.

5ZOB Recommendations about decreased or increased phase-out rates
(1) The Commission must, on the Minister’s request, consider and recommend

whether—
(a) a decreased phase-out rate should be set for 1 or more eligible industrial 20

activities for a year or years (by the making or amendment of regulations
under section 84A):

(b) an increased phase-out rate should be set for 1 or more eligible industrial
activities for an emissions budget period (by the making or amendment
of regulations under section 84B). 25

(2) The Commission must recommend that a decreased phase-out rate should be
set for 1 or more eligible industrial activities if the Commission is satisfied that
there is an ongoing and substantial risk that activities will be relocated outside
of New Zealand to reduce emissions-related costs.

(3) The Commission may recommend that an increased phase-out rate should be 30
set for 1 or more eligible industrial activities if the Commission is satisfied that
it is appropriate to do so, having regard to the matters listed in section
84C(3).

11 Section 6 amended (Minister of Finance may direct Registrar regarding
establishment of Crown holding accounts and carry out trading activities 35
with respect to units)

(1) In section 6(b), after “overseas registry”, insert “or international transaction
body”.

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(2) In section 6(d), delete “, with any person (including any other Party)”.

12 Section 6A amended (Minister’s power to sell by auction)
(1) In section 6A, replace “section 30G(1)(p)” with “section 30GA”.
(2) In section 6A(a), after “prescribed”, insert “individual limit and”.
(3) After section 6A(b), insert: 5

(c) direct the Registrar to transfer units to any holding account in the Regis-
try for the purposes of selling New Zealand units by auction.

13 Section 7 amended (Minister of Finance may give directions to Registrar
regarding accounts and units)

(1) Repeal section 7(1)(a)(i), (ii), (iv), (v), (vi), and (viii). 10
(2) Replace section 7(1)(b) to (e) with:

(b) transfer units between holding accounts, subject to any prescribed
restriction or prohibition.

(3) Replace section 7(2)(b)(i) with:
(i) the transfer is required to comply with international climate 15

change obligations; or
(4) Repeal section 7(3).

14 Section 9 amended (Minister of Finance may obtain information from
inventory agency and Registrar)
In section 9(b)(ii), replace “retired, replaced, cancelled, and carried-over” with 20
“replaced, and cancelled”.

15 Section 10 replaced (Purpose of Registry)
Replace section 10 with:

10 Purpose of Registry
The purpose of the Registry is— 25
(a) to ensure the accurate, transparent, and efficient accounting of—

(i) the issue, holding, transfer, surrender, and cancellation of New
Zealand units and approved overseas units; and

(ii) the conversion of New Zealand units in accordance with regula-
tions made under this Act; and 30

(b) to ensure the accurate, transparent, and efficient exchange of information
between the Registry, overseas registries, and international transaction
bodies; and

(c) to facilitate the exchange of information between the persons with func-
tions, duties, and powers under this Act to enable all of them to perform 35
their functions and duties and exercise their powers.

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16 Section 13 amended (Registrar may refuse access to, or suspend operation
of, Registry)
In section 13(1)(d), replace “New Zealand’s international obligations” with
“international climate change obligations”.

17 Section 14 amended (Registrar must give effect to directions) 5
In section 14, replace “a provision in Part 4 or 5 of this Act or” with “any of
the ETS participant provisions or by”.

18 Section 15 amended (Registrar to allocate unique numbers)
(1) Replace section 15(1) with:
(1) The Registrar must, in accordance with regulations made under this Act, allo- 10

cate a unique account number to each account when the account is created.
(2) Repeal section 15(2).

19 Sections 16 and 17 repealed
Repeal sections 16 and 17.

20 Section 18 amended (Form and content of unit register) 15
(1) Replace section 18(2)(b) with:

(b) the particulars of transactions, including, but not limited to, the
issue, transfer, replacement, surrender, conversion, and cancella-
tion of units; and

(2) In section 18(3)(a), replace “retirement, replacement, surrender, carry-over,” 20
with “replacement, surrender,”.

(3) In section 18(3)(b)(ii), after “registries”, insert “or international transaction
bodies”.

21 Section 18B amended (Closing holding accounts)
Repeal section 18B(2)(b)(ii)(A). 25

22 Section 18C amended (Transfer of units)
(1) In section 18C(1)(b), after “registry”, insert “or international transaction body”.
(2) Repeal section 18C(3).

23 Section 18CA amended (Effect of surrender, retirement, cancellation, and
conversion) 30

(1) In the heading to section 18CA, replace “, retirement, cancellation, and con-
version” with “and cancellation”.

(2) In section 18CA(1), replace “retired, surrendered, carried-over,” with “surren-
dered,”.

(3) Replace section 18CA(2) to (5) with: 35

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(2) A unit that is transferred to a surrender account may only be further transferred
in accordance with a direction of the Minister of Finance given under section 6
or 7 or a direction of the EPA given under section 124.

23 Section 18CA replaced (Effect of surrender, retirement, cancellation, and
conversion) 5
Replace section 18CA with:

18CA Effect of surrender and cancellation
(1) A unit that is transferred to a cancellation account may not be further transfer-

red, surrendered, or cancelled.
(2) A unit that is transferred to a surrender account may only be further transferred 10

in accordance with a direction of the Minister of Finance given under section 6
or 7 or a direction of the EPA given under section 124.

24 Sections 18CB, 18CC, and 18CD repealed
Repeal sections 18CB, 18CC, and 18CD.

25 Section 18D amended (Succession) 15
(1) Replace section 18D(2)(b) with:

(b) the Registrar has registered the successor as the account holder.
(2) Replace section 18D(3) with:
(3) The Registrar may register a successor as the account holder—

(a) on application made in the form, and payment of the fee (if any), pre- 20
scribed in regulations made under this Act; and

(b) in accordance with those regulations.
(4) However, if the account holder is a company and any units in its holding

account are vested in the Crown under section 324(1) of the Companies Act
1993,— 25
(a) subsections (2) and (3) do not apply; and
(b) the EPA must, as soon as practicable after becoming aware of the public

notice about the vesting of the units that is given under section 324(3) of
that Act, direct the Registrar to transfer the units to a Crown holding
account and close the account holder’s holding account; and 30

(c) the Registrar must comply with the EPA’s direction.

26 Section 19 repealed (Retirement of Kyoto units by the Crown)
Repeal section 19.

27 Section 20 amended (Transactions must be registered)
(1) In section 20(1), delete “retire,”. 35

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(2) In section 20(2)(a), replace “the international transaction log” with “an inter-
national transaction body”.

28 Section 21 repealed (Registration procedure for Kyoto units)
Repeal section 21.

29 Section 21AA amended (Registration procedure for New Zealand units 5
and approved overseas units)

(1) In section 21AA(1), replace “a Minister authorised to give the direction under a
provision of this Act or the EPA” with “the EPA or a Minister authorised to
give the direction under this Act”.

(2) Replace section 21AA(1)(b) with: 10
(b) if the proposed transaction concerns an overseas registry or international

transaction body, send a record of the proposed transaction to the over-
seas registry or international transaction body if required by it; and

(3) In section 21AA(1)(c), after “registry”, insert “or international transaction
body”. 15

(4) In section 21AA(1)(c)(ii)(A), replace “the Minister or the EPA” with “the EPA
or the Minister”.

(5) In section 21AA(2), after “an overseas registry”, insert “or international trans-
action body”.

(6) In section 21AA(2), replace “the overseas registry” with “it”. 20
(7) In section 21AA(2)(b), after “registry”, insert “or international transaction

body”.
(8) In section 21AA(2)(c)(i), replace “the Minister or the EPA who gave the direc-

tion” with “the EPA or the Minister who gave the direction”.
(9) In section 21AA(3), after “from the overseas registry”, insert “or international 25

transaction body”.
(10) In section 21AA(3)(c), after “registry”, insert “or international transaction

body”.

30 Section 21A amended (Electronic registration)
In section 21A, delete “a provision of”. 30

31 Section 21B amended (Defective applications)
Replace section 21B(1) with:

(1) If an application is defective, the Registrar may direct the applicant, in writing
by electronic notification, the applicant to correct the defect within a specified
period of time. 35

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32 Section 23 repealed (Receiving Kyoto units from overseas registries)
Repeal section 23.

33 Section 23A amended (Receiving New Zealand units and approved
overseas units from overseas registries)

(1) In the heading to section 23A, after “registries”, insert “or international 5
transaction bodies”.

(2) In section 23A(1), (2), and (3), after “overseas registry”, insert “or international
transaction body” in each place.

34 Section 24 amended (Priority of registration)
In section 24(1), delete “a provision of”. 10

35 Section 25 amended (Correction of unit register)
(1) In section 25(1)(a), replace “the Minister or the EPA who gave the direction”

with “the EPA or the Minister who gave the direction”.
(2) Replace section 25(3)(c)(ii) with:

(ii) an international transaction body (if required to do so); and 15

36 Section 27 amended (Information accessible by search)
(1) Replace section 27(1)(c) with:

(c) for each account whose purpose is to hold approved overseas units, the
commitment period that the Protocol provides for and that is associated
with the account; and 20

(2) Repeal section 27(2)(a) and (b).
(3) Replace section 27(2)(h) and (i) with:

(h) the total quantity of each type of approved overseas units issued during
that year; and

(4) In section 27(2)(j), replace “to the Registry from overseas registries” with “into 25
the Registry”.

(5) In section 27(2)(j)(iii), replace “overseas registries” with “registry or body”.
(6) In section 27(2)(j)(iii)(A) and (B), replace “overseas registry” with “registry or

body”.
(7) In section 27(2)(k), replace “from the Registry to overseas registries” with “out 30

of the Registry”.
(8) In section 27(2)(k)(iii), replace “overseas registries” with “registry or body”.
(9) In section 27(2)(k)(iii)(A) and (B), replace “overseas registry” with “registry or

body”.
(10) Replace section 27(2)(n), (o), and (p) with: 35

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(o) the total quantity of approved overseas units transferred during that year
to any sink cancellation account; and

(p) the total quantity of approved overseas units transferred during that year
to any non-compliance cancellation account; and

(11) In section 27(2)(q), replace “to the” with “to each”. 5
(12) Repeal section 27(2)(r).
(13) Replace section 27(2)(u), (v), and (w) with:

(u) the total quantity of each type of unit into which New Zealand units are
converted in accordance with regulations made under this Act.

(14) Replace section 27(3)(a) and (b) with: 10
(a) the total holdings in each holding account in the Registry (including any

holding account held by the Crown) of each type of approved overseas
unit issued in—
(i) the first commitment period starting on 1 January 2008 and end-

ing on 31 December 2012; or 15
(ii) the second commitment period starting on 1 January 2013 and

ending on 31 December 2020; and
(b) the total quantity of each type of approved overseas unit in the Registry.

37 Section 30A amended (The Crown or Registrar not liable in relation to
searches in certain cases) 20
Replace section 30A(b)(i) with:

(i) an international transaction body; or

38 Sections 30B to 30D and cross-heading repealed
Repeal sections 30B to 30D and the cross-heading above section 30B.

39 Section 30E repealed (Conversion of New Zealand units into designated 25
assigned amount units for sale overseas or cancellation)
Repeal section 30E.

40 Section 30G amended (Regulations relating to Part 2)
(1) In section 30G(1)(b)(i)(A) and (C), after “registry”, insert “or international

transaction body”. 30
(2) After section 30G(1)(b)(ii), insert:

(iii) the registration of a successor as an account holder:
(3) Repeal section 30G(1)(d).
(4) In section 30G(1)(e)(vi)(B), replace “the international transaction log” with “an

international transaction body”. 35

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(5) In section 30G(1)(f) and (i), after “Part”, insert “or regulations made under this
Part”.

(6) After section 30G(1)(i), insert:
(ia) prescribing, for the purpose of the definition of international trans-

action body in section 4, bodies that confirm the validity of transac- 5
tions relating to accounting of greenhouse gas emissions:

(7) In section 30G(1)(j), replace “and to which units may be transferred to and”
with “or to which units may be transferred to or”.

(8) In section 30G(1)(k), after “overseas registry”, insert “or international transac-
tion body”. 10

(9) In section 30G(1)(n), replace “the terms of the Convention and the Protocol”
with “international climate change obligations”.

(10) In section 30G(1)(n), replace “the Convention or the Protocol” with “inter-
national climate change obligations”.

(11) Repeal section 30G(1)(p) and (q). 15
(12) In section 30G(4), replace “the Convention and the Protocol” with “inter-

national climate change obligations”.

41 Sections 30GA and 30GB to 30H replaced
Replace sections 30GA and 30GB to 30H with:

30GA Regulations for auctions to sell New Zealand units 20
(1) The Governor-General may, by Order in Council, make regulations recommen-

ded by the Minister Council made on the recommendation of the Minister,
make regulations under this section that prescribe matters relating to the
powers of the Minister under section 6A to sell New Zealand units by auction.

(2) If regulations are to be made under this section, the Minister must recommend 25
the making of regulations that—
(a) specify the date on which the sale of New Zealand units by auction com-

mences:
(b) prescribe an indicative schedule for when auctions are planned to be

held: 30
(c) specify circumstances in which an auction will not be held:
(d) specify the format of an auction (for example, a single-round, sealed bid

format):
(e) specify rules for the format of the auction (for example, rules on how

bids are made and how tied bids are resolved): 35
(f) specify criteria, and requirements for registration, that a person must sat-

isfy to participate in an auction:

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(g) specify financial processes that a person must follow when participating
in an auction, including requirements for financial assurance, payment,
and delivery:

(h) provide for the results of each auction to be published made publicly
available. 5

(3) If regulations are to be made under this section, the Minister may recommend
the making of regulations for any or all of the following purposes:
(a) providing for pilot auctions to be conducted, whether before or after the

date on which auctions commence:
(b) prescribing offences and penalties for the breach of regulations made 10

under this section or section 30GD:
(ba) prescribing infringement offences for the breach of regulations made

under this section or section 30GD, and prescribing for those
offences—
(i) maximum fines not exceeding— 15

(A) $3,000 for an individual:
(B) $6,000 in any other case; and

(ii) infringement fees not exceeding—
(A) $1,000 for an individual:
(B) $2,000 in any other case; and 20

(bb) prescribing those infringement fees as different amounts for a first, sec-
ond, or subsequent infringement offence:

(c) providing for any other matters for the conduct of an auction that the
Minister considers relevant to the effective conduct of the auction.

30GB Regulations about overall limits and price control settings for units 25
(1) The Governor-General may, by Order in Council, make regulations recommen-

ded by the Minister Council made on the recommendation of the Minister,
make regulations under this section.

(2) If regulations are to be made under section 30GA, the Minister must recom-
mend the making of regulations under this section that— 30
(a) prescribe an overall limit on the sum of the following for a calendar

year:
(i) the number of New Zealand units sold by auction in that year

(New Zealand units available by auction):
(ii) the number of New Zealand units that are allocated for eligible 35

activities, or provided to participants under negotiated greenhouse
agreements, in that year (New Zealand units available by other
means):

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(iii) the number of approved overseas units used by participants in that
year by, for example, being transferred to holding accounts or
being surrendered (approved overseas units available); and

(a) prescribe the following limits for a calendar year:
(i) a limit on the New Zealand units available by auction (an indi- 5

vidual limit); and
(ii) a limit on the approved overseas units used (another individual

limit); and
(iii) a limit on the sum of the following (the overall limit):

(A) the New Zealand units available by auction: 10
(B) the New Zealand units available by other means:
(C) the approved overseas units used; and

(b) provide that the overall limit—
(i) restricts both the New Zealand units available by auction and the

approved overseas units available, in that the following are pro- 15
hibited to the extent that the overall limit would be exceeded:
(A) the sale of New Zealand units by auction:
(B) the use of approved overseas units by participants; but

(ii) does not restrict the New Zealand units available by other means,
in that New Zealand units may be allocated for eligible activities, 20
or provided to participants under negotiated greenhouse agree-
ments, even if the overall limit is exceeded; and

(b) provide that—
(i) the individual limits must not be exceeded; and
(ii) the overall limit— 25

(A) restricts both the New Zealand units available by auction
and the approved overseas units used, in that neither must
cause the overall limit to be exceeded; but

(B) does not restrict the New Zealand units available by other
means, in that they may cause the overall limit to be excee- 30
ded; and

(c) provide that any additional units that are allocated under section
86C(5)(b) are not counted as New Zealand units available by other
means; and

(d) provide for how a reserve amount of New Zealand units is to be released 35
for sale at auction if a trigger price is reached or exceeded by bidding at
an auction, unless the reserve amount and minimum price are set at zero
under paragraph (e); and

(e) prescribe the following price control settings:

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55



(i) the reserve amount of New Zealand units for each trigger price,
which may be a single reserve amount of zero:

(ii) the 1 or more trigger prices, unless the reserve amount is zero:
(iii) the minimum price at which units may be sold by auction, which

may be zero. 5
(3) The Minister must recommend the making of regulations under this section so

that,—
(a) when the regulations are first made, they prescribe an overall limit limits

and price control settings for each of the next 5 or 6 calendar years; and
(b) the regulations are amended to ensure that, at all times, they prescribe an 10

overall limit limits and price control settings for each of the next 5 calen-
dar years.

(4) Each time the Minister is to recommend that the regulations be amended to
apply to a further calendar year under subsection (3)(b), the Minister—
(a) must consider whether to recommend prescribing a new overall limit 15

new limits and new price control settings for each of the 2 calendar years
before that further calendar year; and

(b) may recommend prescribing a new overall limit new limits and new
price control settings for 1 or both of the 2 calendar years after the year
in which the amendment is made. 20

(5) However, the Minister may make a recommendation under subsection (4)(b)
only if,—
(a) in the year in which the amendment is made, the price control settings

have had effect by—
(i) the release of a reserve amount of units; or 25
(ii) the sale of units at the minimum price; or

(b) the Minister is satisfied that the amendment is justified by the following
special circumstances:
(i) a change that has significantly affected any matter that the Minis-

ter was required to consider under section 30GC when recom- 30
mending the overall limit limits and price control settings that are
to be amended; or

(ii) a change in the budget or contribution described by section
30GC(2)(a) or (b) that applies to the year to which the amend-
ment applies; or 35

(iii) a force majeure event.
(6) Regulations made under subsection (2)(a)(ii) may be made in respect of dif-

ferent units, transactions, persons, classes of units, subclasses of units, classes
of transactions, or classes of persons.

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(7) See section 30GC for requirements relating to this section.
(8) In this section,—

approved overseas units used means the number of approved overseas units
used by participants in a calendar year by, for example, being transferred to
holding accounts or being surrendered 5
New Zealand units available by auction means the number of New Zealand
units sold by auction in a calendar year
New Zealand units available by other means means the number of New Zea-
land units that are allocated for eligible activities, or provided to participants
under negotiated greenhouse agreements, in a calendar year. 10

Example
Regulations are first made under this section in December 2019. They must pre-
scribe the overall limits individual limits, overall limits, and price control settings for
the 5 (or 6) years from 2020 to 2024 (or 2025). In 2020, the regulations—
• must be amended to apply (or in how they apply) to 2025; and 15
• may be amended to prescribe new overall limits individual limits, overall

limits, and price control settings for 2023 and 2024; and
• may be amended to prescribe new price control settings for 2021 or 2022.

30GC Requirements for regulations about overall limits and price control
settings for units 20

(1) The Minister must comply with this section in—
(a) recommending under section 30GB(2), (3), or (4)(b) the making of

regulations that prescribe overall limits individual limits, overall limits,
or price control settings; and

(b) considering under section 30GB(4)(a) whether to recommend pre- 25
scribing new overall limits individual limits, overall limits, and price
control settings for the 2 calendar years before a further calendar year.

(2) The Minister must be satisfied that the overall limits and price control settings
are in accordance with—
(a) the relevant emissions budget; and 30
(b) the relevant nationally determined contribution for New Zealand under

the Paris Agreement.
(2) The Minister must be satisfied that the limits and price control settings are in

accordance with—
(a) the emissions budget, and the nationally determined contribution for 35

New Zealand under the Paris Agreement, that applies to—
(i) the period for which the limits or price control settings are being

prescribed; or

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(ii) any period after that, if a budget or contribution exists for that
period; and

(b) the 2050 target.
(3) However, they need not strictly accord with the budget or contribution budgets

or contributions as long as the Minister is satisfied that the discrepancy is justi- 5
fied, after considering the other matters under this section.

(4) The Minister must consider—
(a) the main matters; and
(cb) the additional matters, but only in relation to the price control settings.

(5) The main matters are as follows: 10
(a) the projected trends for New Zealand’s greenhouse gas emissions in the

5 years after the current year, including—
(i) the anticipated volumes of greenhouse gas emissions to which the

emissions trading scheme applies (meaning emissions for which
participants are required to submit returns or surrender units under 15
this Act); and

(ii) the anticipated volumes of greenhouse gas emissions to which the
emissions trading scheme does not apply:

(b) the proper functioning of the emissions trading scheme:
(c) international climate change obligations and instruments or contracts 20

that New Zealand has with other jurisdictions to access emissions reduc-
tions in their carbon markets:

(d) the forecast availability and cost of ways to reduce greenhouse gas emis-
sions that may be needed for New Zealand to meet its targets for the
reduction of emissions: 25

(e) any recommendations of the Climate Change Commission that are made
after an emissions budget is first set, including any desirable carbon
price path (if available):

(e) the recommendations made by the Climate Change Commission under
section 5ZOA: 30

(f) any other matters that the Minister considers relevant.
(6) The additional matters are as follows:

(a) the impact of emissions prices on households and the economy:
(b) the level and trajectory of international emissions prices (including price

controls in linked markets): 35
(c) inflation.

(7) If the Minister makes a recommendation about prescribing overall limits or
price control settings that differs from any recommendation of the Climate
Change Commission described by subsection (5)(e), the Minister must, as

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soon as is reasonably practicable, prepare a report of the reasons for the differ-
ence and—
(a) present a copy of the report to the House of Representatives; and
(b) publish the report.

(7) If the Minister makes a recommendation about prescribing limits or price con- 5
trol settings that differs from a recommendation made by the Commission
under section 5ZOA, the Minister must, as soon as is reasonably practicable,
prepare a report of the reasons for the difference and—
(a) present a copy of the report to the House of Representatives; and
(b) make the report publicly available. 10

(8) If the Climate Change Commission exists and an emissions budget has been
set,—
(a) the Minister must request the recommendations of the Commission for

the purpose of subsection (5)(e); and
(b) the Commission’s recommendations must be made in accordance with 15

the same requirements under section 30GB and this section that apply
to the making of the Minister’s recommendations.

30GD Regulations for auction monitor
(1) The Governor-General may, by Order in Council, make regulations recommen-

ded by the Minister Council made on the recommendation of the Minister, 20
make regulations under this section.

(2) If regulations are made, or are to be made, under section 30GA, the Minister
may recommend the making of regulations under this section for any or all of
the following purposes:
(a) prescribing a method or process by which the Minister may appoint a 25

person as an auction monitor, which must—
(i) require the person to be independent of any auction agents and

any persons who are likely to be auction participants; and
(ii) include as functions of the auction monitor—

(A) validating auction results; and 30
(B) publishing reports on the results of auctions:

(b) specifying that the auction monitor’s functions include any of the fol-
lowing:
(i) monitoring the conduct of any auction agents and auction partici-

pants: 35
(ii) providing periodic assessments of the auction system and making

recommendations for improvements:

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(iii) calculating additional specified metrics in respect of the auction
process and auction results (such as bid volume statistics and rele-
vant aggregate information):

(iv) any other functions that the Minister considers are relevant to the
effective conduct of the auction monitor’s role. 5

(3) In this section and section 30GE,—
auction agent means any agent appointed under section 6A(b) to conduct an
auction
auction monitor means a person appointed as an auction monitor under regu-
lations recommended under subsection (2)(a) 10
auction participant means a potential buyer who participates in an auction.

30GE Sharing information with auction monitor
(1) The purpose of this section is to facilitate the provision of information—

(a) from the EPA, the Registrar, the chief executive, or any auction agent (a
provider): 15

(b) to the auction monitor (if appointed).
(2) A provider must provide information to the auction monitor if the informa-

tion—
(a) is requested by the auction monitor; and
(b) is required by the auction monitor to assist in carrying out its functions. 20

30GF Obligation of confidentiality on auction monitor
(1) This section applies to the auction monitor (if appointed) while, and after, the

auction monitor performs its functions or exercises its powers.
(2) The auction monitor—

(a) must keep confidential all information that comes into its knowledge 25
when performing its functions or exercising its powers; and

(b) must not disclose any of that information, except—
(i) with the consent of the person to whom the information relates or

to whom the information is confidential; or
(ii) to the extent that the information is already in the public domain; 30

or
(iii) for the purposes of, or in connection with, the performance of its

functions or the exercise of its powers; or
(iv) as provided under this Act or any other Act; or
(v) in connection with any investigation or inquiry (whether or not 35

preliminary to any proceedings) in respect of, or any proceedings
for, an offence against this Act or any other Act; or

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(vi) for the purpose of complying with international climate change
obligations.

(3) The auction monitor commits an offence under section 30GG if the auction
monitor knowingly contravenes this section.

(4) Nothing in subsection (2) may be treated as prohibiting the auction monitor 5
from—
(a) providing or publishing general information in relation to its functions;

or
(b) with the prior approval of the Minister, preparing statistical information

and supplying it to any person in a form that does not identify any indi- 10
vidual.

30GG Offence for breach of auction monitor’s obligation of confidentiality
An auction monitor who knowingly acts in contravention of section 30GF
commits an offence and is liable on conviction to either or both of the follow-
ing: 15
(a) imprisonment for a term not exceeding 6 months:
(b) a fine not exceeding $15,000.

30H Consultation and commencement for certain regulations about units and
auctions

(1) This section applies to regulations made under— 20
(a) section 30G(1)(b)(i), (c), (j), and (k) (Part 2—institutional arrange-

ments):
(b) section 30GA (auctions to sell New Zealand units):
(c) section 30GB (limits and price controls for units):
(d) section 30GD (auction monitor). 25

(2) See sections 3A and 3B for consultation requirements that apply to the making
of the regulations.

(3) The regulations come into force—
(a) 3 months after the date of their notification in the Gazette, or on any

later date specified in the regulations; but 30
(b) if the Minister considers it is in the national interest that they be made

urgently, on any earlier date specified in the regulations.

42 Section 30H amended (Procedure for certain regulations relating to units)
(1) In the heading to section 30H, after “units”, insert “and auctions”.
(2) Replace section 30H(1) with: 35
(1) Before recommending that regulations be made under section 30G(1)(b)(i), (c),

(j), or (k), 30GA, 30GB, or 30GD, the Minister must be satisfied that 1 of the

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following has consulted the persons (or representatives of those persons) that
appear to the consulter likely to be substantially affected by any regulations
made in accordance with the recommendation:
(a) the Minister or the chief executive; or
(b) for regulations made under section 30GB, the Minister, the chief 5

executive, or the Climate Change Commission.
(3) In section 30H(3), delete “, except regulations made under section 30G(1)(q),”.
(4) In section 30H(5), replace “section 30G(1)(b)(i), (c), (d), (j), (k), (p), or (q)”

with “the provisions referred to in subsection (1)”.

43 Section 30I amended (Incorporation by reference in regulations made 10
under section 30G)

(1) In section 30I(1)(a) and (b)(i) and (ii), replace “the Convention or the Protocol”
with “international climate change obligations”.

(2) In section 30I(4), replace “sections 163 to 165, 167, and 168” with “a relevant
empowering section”. 15

44 New section 30IA inserted (Minister must obtain emission reductions to
match reserve amounts of units released)
After section 30I, insert:

30IA Minister must obtain emission reductions to match reserve amounts of
units released 20

(1) This section applies if 1 or more reserve amounts of New Zealand units are
released for sale at auction in a year.

(2) The Minister must ensure, or enter into agreements that require, that green-
house gas emissions are reduced, or removals are increased, by 1 tonne for
each New Zealand unit released as a reserve amount. 25

(3) The Minister must do so as soon as is reasonably practicable after the end of
the emissions budget period that includes that year.

44 New section 30IA inserted (Minister must obtain greenhouse gas
reductions to match certain excess units)
After section 30I, insert: 30

30IA Minister must obtain greenhouse gas reductions to match certain excess
units

(1) This section applies to the following New Zealand units (if any) to the extent
that they cause the emissions budget for an emissions budget period to be
exceeded: 35
(a) the units sold by auction, after being released in a reserve amount, in that

period:

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(b) the units allocated for eligible activities, or provided to participants
under negotiated greenhouse agreements, in that period.

(2) The Minister must ensure, or enter into agreements that require, that the emis-
sion of greenhouse gases is reduced, or the removal of greenhouse gases from
the atmosphere is increased, by 1 tonne of carbon dioxide equivalent for each 5
of the units, whether by domestic means or offshore mitigation.

(3) The deadline for doing so is as soon as is reasonably practicable after the end
of the emissions budget period.

45 Section 30J amended (Signing false declaration with respect to regulations
made under section 30G) 10

(1) In the heading to section 30J, after “section 30G”, insert “or 30GA”.
(2) In section 30J, after “section 30G”, insert “or 30GA and that is false”.

46 New subparts 3 and 4 subpart 3 of Part 2 inserted
After section 30K, insert:

Subpart 3—Infringement offences 15

30L Meaning of infringement offence and infringement fee
In this subpart,—
infringement fee, for an infringement offence, means the infringement fee for
an infringement the offence prescribed in regulations made under this Act
infringement offence means an offence specified prescribed as an infringe- 20
ment offence by regulations made under this Act.

30M Regulations about infringement offences
(1) The Governor-General may, by Order in Council made on the recommendation

of the Minister, make regulations for any or all of the following purposes:
(a) specifying the offences in this Act or regulations made under this Act 25

that are infringement offences:
(a) prescribing infringement offences by—

(i) prescribing a duty, restriction, or prohibition for conduct that is
similar to conduct, or similar to an element of conduct, for which
there is a duty, restriction, or prohibition under any of sections 30
30J, 30K(1), 46, 47, 48, 129, 131, 132(1)(a), (b), and (f) to (i),
259, 260, 261(1)(a), (b), (d), and (e), and 264; and

(ii) providing that a contravention of the duty, restriction, or prohib-
ition is an infringement offence:

(b) for an offence in this Act or the regulations, defining a class of only 35
some of those offences and specifying the class as an infringement
offence:

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(c) prescribing, for an infringement offence, an infringement fee not exceed-
ing—
(i) $1,000 for a person other than a body corporate:
(ii) $2,000 for a body corporate:

(b) prescribing for the infringement offences— 5
(i) maximum fines not exceeding—

(A) $3,000 for an individual:
(B) $6,000 in any other case; and

(ii) infringement fees not exceeding—
(A) $1,000 for an individual: 10
(B) $2,000 in any other case:

(d) prescribing those infringement fees as different amounts for a first, sec-
ond, or subsequent infringement offence:

(e) providing for any other matters contemplated by this subpart, necessary
for its administration, or necessary for giving it full effect. 15

(2) Before the Minister recommends the making of regulations under subsection
(1)(a), the Minister must be satisfied, after consulting the Minister of Justice,
that a contravention of each duty, restriction, or prohibition is sufficiently
minor to be appropriate as an infringement offence.

(3) A person may be prosecuted for, and convicted of, an offence against any pro- 20
vision referred to in subsection (1)(a)(i) even if their conduct is or may be an
infringement offence.

30N Procedure for regulations about infringement offences
(1) Before recommending that regulations be made under section 30M, the Min-

ister must consult, or be satisfied that the chief executive has consulted, the 25
persons (or representatives of those persons) that appear to the Minister or the
chief executive likely to be substantially affected by any regulations made in
accordance with the recommendation.

(2) The process for consultation must include—
(a) adequate and appropriate notice of the proposed terms of the recommen- 30

dation, and of the reasons for it; and
(b) a reasonable opportunity for interested persons to consider the recom-

mendation and make submissions; and
(c) adequate and appropriate consideration of submissions.

(3) Regulations made under this section come into force 3 months after the date of 35
their notification in the Gazette, or on any later date that may be set out in the
regulations.

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(4) A failure to comply with this section does not affect the validity of regulations
made under section 30M.

30N Consultation and commencement for regulations about infringement
offences

(1) This section applies to regulations made under section 30M. 5
(2) See sections 3A and 3B for consultation requirements that apply to the making

of the regulations.
(3) The regulations come into force 3 months after the date of their notification in

the Gazette, or on any later date specified in the regulations.

30O Proceedings for infringement offences 10
(1) A person who is alleged to have committed an infringement offence may—

(a) be proceeded against by the filing of a charging document under section
14 of the Criminal Procedure Act 2011; or

(b) be issued with an infringement notice under section 30Q.
(2) Proceedings commenced in the way described in subsection (1)(a) do not 15

require the leave of a District Court Judge or Registrar under section 21(1)(a)
of the Summary Proceedings Act 1957.

(3) See section 21 of the Summary Proceedings Act 1957 for the procedure that
applies if an infringement notice is issued.

30P Appointment of enforcement officers 20
(1) The EPA may appoint 1 or more persons who are employees of the EPA as

enforcement officers to exercise 1 or more of the powers and perform the func-
tions conferred on enforcement officers under this subpart.

(2) Section 93(2) to (5) applies in relation to the appointment.

30Q When infringement notice may be issued 25
(1) An enforcement officer may issue an infringement notice to a person if the

enforcement officer believes on reasonable grounds that the person is commit-
ting, or has committed, an infringement offence.

(2) The enforcement officer may require the person to provide their full name and
any other information required so that the enforcement officer can issue the 30
infringement notice.

30R Infringement notice may be revoked
(1) The enforcement officer may revoke an infringement notice before the

infringement fee is paid or an order for payment of a fine is made or deemed to
be made by a court under section 21 of the Summary Proceedings Act 1957. 35

(2) An infringement notice is revoked by giving written notice to the person to
whom it was issued that the notice is revoked.

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(3) The revocation of an infringement notice under this section is not a bar to any
other enforcement action against the person to whom the notice was issued in
respect of the same matter.

30S What infringement notice must contain
(1) An infringement notice must be in the form prescribed in regulations and must 5

contain the following particulars:
(a) details of the alleged infringement offence that fairly inform a person of

the nature of the alleged offence, including, to any applicable extent, the
time and place of the alleged offence:

(b) the amount of the infringement fee: 10
(c) the address of the EPA:
(d) how the infringement fee may be paid:
(e) the time within which the infringement fee must be paid:
(f) a summary of the provisions of section 21(10) of the Summary Proceed-

ings Act 1957: 15
(g) a statement that the person served with the notice has a right to request a

hearing:
(h) a statement of what will happen if the person served with the notice nei-

ther pays the infringement fee nor requests a hearing:
(i) any other matters prescribed in regulations. 20

(2) The particulars contained in the notice under subsection (1)(d) must include
at least 1 method of payment in person.

30T How infringement notice may be served
(1) An infringement notice may be served on the person who the enforcement offi-

cer believes is committing or has committed the infringement offence by— 25
(a) delivering it to the person or, if the person refuses to accept it, bringing it

to the person’s notice; or
(b) leaving it for the person at the person’s last known place of residence

with another person who appears to be of or over the age of 14 years; or
(c) leaving it for the person at the person’s place of business, or place of 30

work, with another person; or
(d) sending it to the person by prepaid post addressed to—

(i) the mailing address recorded in a register kept by the EPA under
this Act for the person or any primary representative of the per-
son, if they are an account holder; or 35

(ii) the person’s last known place of residence or place of business or
work; or

(e) sending it to,—

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(i) if the person is an account holder, the electronic address recorded
in a register kept by the EPA under this Act for the person or any
primary representative of the person; or

(ii) if the person does not have a known place of residence or business
in New Zealand, an electronic address of the person. 5

(2) An infringement notice (or a copy of it) sent by prepaid post to a person under
subsection (1) is to be treated as having been served on the person on the
fifth working day after the date on which it was posted.

30U Payment of infringement fees
All infringement fees paid in respect of infringement offences must be paid 10
into a Crown Bank Account.

30V Reminder notices
A reminder notice must be in the form prescribed in regulations, and must
include the same particulars, or substantially the same particulars, as the
infringement notice. 15

Subpart 4—Regulations setting price of carbon

30W Regulations setting price of carbon
(1) For the purpose of sections 134 to 134D and any other provisions that refer

to regulations made under this section, the Governor-General may, by Order in
Council made on the recommendation of the Minister, make regulations— 20
(a) prescribing the methodology for specifying the price of carbon; and
(b) specifying the price of carbon by applying the methodology.

(2) Before making a recommendation, the Minister must take into account—
(a) the price of the units used to calculate revenue from the emissions trad-

ing scheme in the Crown annual financial statements in the preceding 12 25
months; and

(b) the price of New Zealand units sold by auction in the preceding 12
months; and

(c) any changes to the operation of the emissions trading scheme that have
affected the price of the units surrendered under that scheme, or that may 30
do so before the end of the next levy year.

(3) Before recommending the making of regulations under subsection (1)(a), the
Minister must consult, or be satisfied that the chief executive has consulted, the
persons (or representatives of those persons) that appear to the Minister or the
chief executive likely to be substantially affected by any regulations made in 35
accordance with the recommendation.

(4) The process for consultation must include—

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(a) giving adequate and appropriate notice of the proposed terms of the rec-
ommendation, and of the reasons for it; and

(b) providing a reasonable opportunity for interested persons to consider the
recommendation and make submissions; and

(c) giving adequate and appropriate consideration to submissions. 5
(5) Regulations made under subsection (1)(a) may not come into force earlier

than 3 months after the date of their notification in the Gazette.
(6) A failure to comply with subsection (4) does not affect the validity of regula-

tions made under this section.

47 Section 31 amended (Meaning of greenhouse gas) 10
(1) In section 31, replace “subpart” with “Part”.
(2) In section 31, delete “, but does not include a gas that is covered by the Mon-

treal Protocol on Substances that Deplete the Ozone Layer”.

48 Section 32 amended (Primary functions of inventory agency)
(1) After section 32(1)(b)(i), insert: 15

(ia) New Zealand’s national inventory report under Article 13.7 of the
Paris Agreement; and

(2) Repeal section 32(1)(b)(iii).

49 Section 35 amended (Publication)
In section 35, replace “and its national communication (or periodic report) in 20
electronic form by placing the report” with “, national inventory report, and
national communication (or periodic report) in electronic form by placing the
reports”.

50 Section 36 amended (Authorisation of inspectors)
In section 36(1)(c), replace “New Zealand Pastoral Agriculture Research Insti- 25
tute” with “AgResearch”.

50A Section 48 amended (Signing false declaration in respect of regulations
made under section 50)
In section 48, after “section 50”, insert “and that is false”.

51 Section 49 amended (Reporting) 30
In section 49, replace “under the Convention and the Protocol” with “in
accordance with international climate change obligations”.

52 Section 50 amended (Regulations)
(1) In section 50(1)(j), replace “the terms of the Convention and the Protocol” with

“international climate change obligations”. 35

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(2) In section 50(1)(j), replace “with the Convention or the Protocol” with “with
international climate change obligations”.

(2A) In section 50(2), replace “If recommended by the Minister, the Governor-
General may, by Order in Council” with “The Governor-General may, by Order
in Council made on the recommendation of the Minister”. 5

(3) In section 50(2)(k), replace “the Convention or the Protocol” with “inter-
national climate change obligations”.

(3A) In section 50(3), replace “If recommended by the Minister, the Governor-
General may, by Order in Council” with “The Governor-General may, by Order
in Council made on the recommendation of the Minister”. 10

(4) Replace section 50(7)(b) and (c) with:
(b) international climate change obligations.

(5) Replace section 50(8) with:
(8) The Governor-General may, by Order in Council, amend or replace Schedule 1,

2, or 2A so that the schedule sets out an up-to-date form of the relevant docu- 15
ment (the Convention, the Protocol, or the Paris Agreement).

53 Section 51 amended (Incorporation by reference in regulations made
under section 50)

(1) In section 51(1)(a) and (b)(i) and (ii), replace “the Convention or the Protocol”
with “international climate change obligations”. 20

(2) In section 51(4), replace “sections 163 to 165, 167, and 168” with “a relevant
empowering section”.

54 Section 52 amended (Inventory agency must report to Minister on certain
matters before certain regulations are made)

(1) In section 52(3)(b), replace “make, as he or she thinks fit, recommendations to 25
the Governor-General to make” with “recommend the making of”.

(2) In section 52(4), replace “obligations under the Convention or the Protocol”
with “international climate change obligations”.

55 Section 53 repealed (Consequential amendments)
Repeal section 53. 30

56 Section 54 amended (Participants)
(1) In section 54(1)(a)(i) and (2), after “section 180,”, insert “186I,”.
(2) In section 54(1)(b)(ii), replace “section 192” with “Part 5”.
(3) In section 54(2), replace “this Part or Part 5” with “the ETS participant provi-

sions”. 35

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57 Section 55 amended (Associated persons)
In section 55(3)(b), replace “this Part or and Part 5” with “the ETS participant
provisions”.

58 Section 56 amended (Registration as participant in respect of activities
listed in Schedule 3) 5
After section 56(4), insert:

(5) To avoid doubt, a person does not carry out an activity listed in Schedule 3, and
so does not have to notify the EPA under subsection (1)(a), merely because
they—
(a) deforest pre-1990 forest land that may not be treated as deforested under 10

section 179A(1)(b); or
(b) deforest land that has ceased to be forest land (and pre-1990 forest land)

because it has been offset by pre-1990 offsetting forest land.

59 Section 57 amended (Applicant to be registered as participant in respect of
activities listed in Schedule 4) 15

(1) In section 57(4)(b), replace “this Part or Part 5” with “the ETS participant pro-
visions”.

(2) After section 57(4)(ba), insert:
(bb) has met any obligations incurred while previously registered in respect

of the activity; and 20
(3) Replace section 57(6) with:
(6) After registering a person under subsection (5), the EPA must notify the person

that they have been registered as a participant in respect of the activity and the
date from which the registration will take effect.

(4) In section 57(8), replace “section 198(2)(b), or 209(2)(b)” with “section 25
198(2) or 209(2)”.

60 Section 58 amended (Removal from register of participants in respect of
activities listed in Schedule 4)

(1) Repeal section 58(3)(c).
(2) In section 58(4), replace “section 188(7)(a)(ii), 198(3)(b), or 209(3)(b)” with 30

“section 191AB 188(7), 198(3), or 209(3)”.

61 Section 59 amended (Removal from register of participants in respect of
activities listed in Schedules 3 and 4)

(1) In section 59(2)(b), delete “, and any other person specified in section
188(7)(a)(i), 198(3)(a), or 209(3)(a), as the case may require,”. 35

(2) In section 59(3), replace “and 211” with “, 211, and 211A”.

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62 New sections 59A and 59B inserted section 59B inserted (Removal from
register if participant never carried out activity)
After section 59, insert:

59A Removal from register for persistent non-compliance (standard forestry
participants only) 5

(1) The EPA may remove the name of a person from the register kept under section
57 in respect of an activity of standard forestry if—
(a) the person has not submitted an emissions return required by section

189AB by 365 days after the date on which the person was required to
submit the emissions return; or 10

(b) the person has not surrendered or repaid units by 365 days after the date
on which the person was required to surrender or repay the units; or

(c) the person has not paid a penalty imposed by sections 134 to 134D
by a date that is both—
(i) 90 days after the date on which the person was required to pay the 15

penalty; and
(ii) 365 days after the date on which the person was required to sur-

render or repay the units or submit the emissions return to which
the penalty relates.

(2) However, the EPA may not rely on subsection (1)(a) to remove the name of 20
a person from the register if—
(a) the person has submitted an emissions return under section 189AA

within 365 days after the date on which the emissions return required by
section 189AB was required to be submitted; or

(b) the EPA has made an assessment under section 121 of the matters that 25
should have been in the person’s emissions return, and—
(i) the person has surrendered any units required to be surrendered as

a result of the assessment; and
(ii) the person has paid any penalties resulting from the failure to sub-

mit the return and from the assessment. 30
(3) At least 90 days before removing the name of the person from the register, the

EPA must notify the person—
(a) that the EPA proposes to remove the name of the person from the regis-

ter; and
(b) of the reason for the proposed removal (for example, failure to surrender 35

units); and
(c) of the actions that the person may take to prevent the removal (for

example, surrender the units that the person has failed to surrender).

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(4) The EPA may still take action under this section if it is unable to notify the per-
son of its proposal to do so because it is not reasonably practicable to locate
them or their address.

59B Removal from register if participant never carried out activity
(1) The EPA must remove the name of a person from the register in respect of an 5

activity if the EPA is satisfied that the person is not carrying out the activity
and has never carried out the activity.

(2) At least 60 days before removing the name of the person from the register, the
EPA must notify the person—
(a) that the EPA proposes to remove the name of the person from the regis- 10

ter; and
(b) of the reason for the proposed removal; and
(c) of the actions that the person may take to prevent the removal (for

example, provide evidence that the person carries out the activity).
(3) The EPA may still take action under this section if it is unable to notify the per- 15

son of its proposal to do so because it is not reasonably practicable to locate
them or their address.

63 Section 60 amended (Exemptions in respect of activities listed in
Schedule 3)

(1) After section 60(1A), insert: 20
(1B) To avoid doubt, an order made under subsection (1) may exempt a person from

being a participant in respect of an activity or emissions that occurred before or
after the commencement of the order.

(2) In section 60A(2)(a) 60(2)(a), and (3)(a) and (b), replace “greenhouse gas
emissions trading scheme established under this Act” with “emissions trading 25
scheme”.

(3) In section 60A(4) 60(4), replace “this Part and Part 5” with “the ETS partici-
pant provisions”.

(4) Replace section 60(5) with:
(5) See sections 3A and 3B for consultation requirements that apply to the making 30

or revocation of an order under this section.
(5) In section 60(6), replace “make a recommendation for” with “recommend”.
(6) Repeal section 60(7) and (8).

64 New sections 60A and 60B inserted
After section 60, insert: 35

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60A Exemption for participants in standard forestry or permanent forestry
activity listed in Part 1 of Schedule 4

(1) The Governor-General may, by Order in Council made on the recommendation
of the Minister, exempt any person or class of persons carrying out an activity
listed in Part 1 or 1A of Schedule 4 from any provision or provisions of— 5
(a) Part 4 or 5; or
(b) regulations made for the purposes of Part 4 or 5.

(2) An order under this section may—
(a) specify any terms and conditions of the exemption that the Governor-

General thinks fit: 10
(b) exempt a person generally, or in respect of a specified act, matter, or

thing, or class of acts, matters, or things:
(c) exempt a person in respect of something that occurred before the order

was made:
(d) require the EPA to deal with emissions returns or applications, update 15

the register, or take other actions in respect of acts, matters, or things
affected by the exemption.

(3) The Minister must not recommend the making of an order under this section
unless satisfied that—
(a) the order will not materially undermine the environmental integrity of 20

the emissions trading scheme; and
(b) the costs of making the order do not exceed the benefits of making the

order.
(4) In determining whether to recommend the making of an order under this sec-

tion, the Minister must have regard to the following: 25
(a) the need to maintain the environmental integrity of the emissions trading

scheme:
(b) the desirability of minimising any compliance and administrative costs

associated with the emissions trading scheme:
(c) the relative costs of giving the exemption or not giving it, and who bears 30

the costs:
(d) any alternatives that are available for achieving the objectives of the

Minister in respect of giving the exemption:
(e) any other matters that the Minister considers relevant.

(5) Before recommending the making of an order under this section, the Minister 35
must—
(a) consult the persons that the Minister considers are likely to be substan-

tially affected by the making of the order; and
(b) give those persons the opportunity to make submissions; and

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(c) consider those submissions.
(6) A failure to comply with subsection (5) does not affect the validity of the

order.
(5) See sections 3A and 3B for consultation requirements that apply to the making

or revocation of an order under this section. 5

60B Incorporation by reference in order made under section 60 or 60A
(1) The following written material may be incorporated by reference in an order

made under section 60 or 60A:
(a) decisions, computer programmes, rules, guidelines, principles, measures,

methodologies, modalities, procedures, mechanisms, or other matters; 10
and

(b) standards, requirements, or recommended practices of a government
agency, standard-setting organisation, or professional body.

(2) Material may be incorporated by reference in the order—
(a) in whole or in part; and 15
(b) with modifications, additions, or variations specified in the order.

(3) Material incorporated by reference in the order has legal effect as part of the
order.

(4) Sections 170 to 177 apply to material incorporated by reference in the order as
if— 20
(a) references to regulations, or regulations made under a relevant empower-

ing section, were references to the order, or to another order made under
section 60 or 60A, as appropriate; and

(b) sections 173(2)(c) and (4)(b) and 174(1)(d) required a targeted notice
instead of a notice in the Gazette, but section 174(1)(d) does not apply to 25
material described by section 174(2)(b).

(5) In subsection (4)(b), targeted notice means a notice to, or that is likely to
come to the attention of, the persons that the chief executive considers are
likely to be substantially affected by the making of the relevant regulations.

65 Section 61 amended (Requirement to have holding account) 30
In section 61(1)(a) and (b), replace “this Part or Part 5” with “the ETS partici-
pant provisions”.

66 Section 62 amended (Monitoring of emissions and removals)
In section 62, insert as subsection (2):

(2) Subsection (1)(b) does not apply in relation to emissions and removals that a 35
person is not required to calculate under—
(a) section 194FC(2), relating to carbon accounting areas (averaging):

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(b) section 194PC(3), relating to temporary adverse event land.

67 Section 63 amended (Liability to surrender units to cover emissions)
(1) After section 63(1), insert:
(1A) However, subsection (1) does not apply to emissions for which a participant is

not liable to surrender units as a result of any of the following: 5
(a) section 179A (when forest land may not be treated as deforested):
(b) section 188AB (certain natural events or clearance for forest manage-

ment):
(c) sections 190 and 194JD(3) (limiting liability to unit balances for car-

bon accounting areas): 10
(d) section 194FC(2) (carbon accounting areas (averaging)):
(e) section 194PC(1) (temporary adverse event land).

(2) Replace section 63(3) with:
(3) If the provision of this Act that imposes a liability to surrender or repay units

does not specify the deadline for doing so, the deadline is within 60 working 15
days after the EPA gives the person a notice requiring the surrender or repay-
ment.

(4) See also sections 194DF and 194DG in relation to liability to surrender
units when transferring between standard forestry in a carbon accounting area
(averaging) and permanent forestry. 20

67 Section 63 amended (Liability to surrender units to cover emissions)
After section 63(3), insert:

(4) If the provision of this Act that imposes a liability to surrender or repay units
does not specify the deadline for doing so, the deadline is within 60 working
days after the EPA gives the person a notice requiring the surrender or repay- 25
ment.

68 Section 64 amended (Entitlement to receive New Zealand units for
removal activities)
After section 64(1), insert:

(1A) Subsection (1) does not apply to removals for which a participant is not entitled 30
to receive units under—
(a) section 194FC(2), relating to carbon accounting areas (averaging); or
(b) section 194PC(1), relating to temporary adverse event land; or
(c) section 197, relating to grant-funded forests.

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68 Section 64 amended (Entitlement to receive New Zealand units for
removal activities)

(1) After section 64(1), insert:
(1A) Subsection (1) does not apply to removals for which a participant is not entitled

to receive units under section 197 (grant-funded forests). 5
(2) Replace section 64(3) with:
(3) Subsection (2) does not apply—

(a) if, within 20 working days of the EPA receiving the emissions return, the
EPA or an enforcement officer serves notice on the participant under
section 94 requiring the participant to provide information in respect of 10
any matter contained in the emissions return; or

(b) to the extent that subsection (4) requires units to be transferred else-
where.

(4) The EPA must apply section 64A as follows:
(a) the units the participant is entitled to receive are the potential transfer 15

units:
(b) the participant is the recipient:
(c) the end of the emissions return period for the emissions return is the

relevant time.

68A New section 64A inserted (Transfer of units allocated, or entitled to be 20
received or reimbursed, less any units that must be surrendered or repaid)
After section 64, insert:

64A Transfer of units allocated, or entitled to be received or reimbursed, less
any units that must be surrendered or repaid

(1) If this section applies, the EPA must calculate the specified units (if any) by 25
counting as follows the units that the recipient was required to, but did not, sur-
render, or repay to a Crown holding account, by or before the relevant time:
(a) starting from the units that were required to be surrendered or repaid by

the earliest dates; but
(b) stopping once they equal the number of potential transfer units (if they 30

do).
(2) If there are any specified units, the EPA must notify the recipient of the follow-

ing:
(a) the number of specified units required for surrender:
(b) the number of specified units required for repayment: 35
(c) that the specified units will be deducted from the potential transfer units

that are transferred to the recipient.
(3) The EPA must direct the Registrar to transfer—

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(a) the specified units required for surrender to a surrender account designa-
ted by the EPA; and

(b) the specified units required for repayment to a Crown holding account
designated by the EPA; and

(c) any potential transfer units left after the specified units are deducted to 5
the recipient’s holding account.

(4) The transfer of the specified units for surrender or repayment satisfies—
(a) the recipient’s entitlement to be transferred those units; and
(b) the recipient’s obligation to surrender or repay the related units.

(5) To avoid doubt, the recipient remains liable to surrender or repay any units that 10
are not counted as specified units (because they exceed the number of potential
transfer units).

69 Section 65 amended (Annual emissions returns)
(1) Replace section 65(1) and (1A) with:
(1) In the period beginning on 1 January and ending on 31 March in each year,— 15

(a) a participant must submit an annual emissions return to the EPA in
respect of each of the activities listed in Schedule 3 or Part 2, 3, or 4 of
Schedule 4 that the participant carried out in the immediately preceding
year:

(b) a person who carried out an activity listed in Part 1 of Schedule 3 on 20
pre-1990 forest land that was the subject of an offsetting forest land
application must submit an annual emissions return to the EPA if—
(i) the application is declined under section 186B; or
(ii) any of the pre-1990 forest land is removed under a variation under

section 186CA; or 25
(iii) approval of the application is revoked, or to be treated as revoked,

under section 186G.
(1A) An emissions return required under subsection (1)(b) must cover the

period—
(i) beginning when the activity listed in Part 1 of Schedule 3 first occurred; 30

and
(ii) ending on the date the event referred to in subsection (1)(b)(i) to (iii)

occurred,—
as if that period were all part of the immediately preceding year.

(2) In section 65(2)(b), replace “section 62(b)” with “section 62(1)(b)”. 35
(1) In section 65(2A)(a), replace “do” with “does”.
(3) Replace section 65(4) and (5) with:

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(4) Following the submission of an annual emissions return under subsection
(1),—
(a) a participant (other than a participant carrying out an activity listed in

Part 5 of Schedule 3) must, by 31 May, surrender the number of units
listed in the participant’s assessment under subsection (2)(c)(i) or recor- 5
ded under subsection (2A)(b); and

(b) a participant carrying out an activity listed in Part 5 of Schedule 3 must,
by 31 May, surrender the number of units listed in the participant’s
assessment under subsection (2)(c)(i) less the number of units allocated
to the participant for the year to which the assessment relates under sec- 10
tion 86BAA.

(5) Despite the rest of this section, a participant in an activity of standard forestry
or permanent forestry (on post-1989 forest land) must instead submit emissions
returns as required by Part 5.

(65) To avoid doubt, a person does not carry out an activity listed in Schedule 3, and 15
so does not have to submit an annual emissions return under subsection
(1)(a), merely because they—
(a) deforest pre-1990 forest land that may not be treated as deforested under

section 179A(1)(b); or
(b) deforest land that has ceased to be forest land (and pre-1990 forest land) 20

because it has been offset by pre-1990 offsetting forest land.

70 Section 67 amended (Retention of emissions records)
(1) In section 67(1)(b), replace “section 62(b)” with “section 62(1)(b)”.
(2) In section 67(2)(a), replace “section 62(d)” with “section 62(1)(d)”.
(3) In section 67(2)(b), replace “an activity listed in Part 1 of Schedule 3 or 4” with 25

“a forestry activity”.

71 Section 68 amended (Issuing New Zealand units)
(1) Replace section 68(2)(b)(i) and (ii) with:

(ii) international climate change obligations; and
(2) In section 68(2)(b)(iii), replace “greenhouse gas emissions trading scheme 30

established under this Act” with “emissions trading scheme”.
(3) In section 68(2)(c), replace “1 January 2013, and if there is no subsequent com-

mitment period specified or determined under the Protocol or no successor
international agreement to the Protocol” with “1 January 2031, and if the Paris
Agreement does not provide for a commitment period that starts on that date”. 35

(4) Replace section 68(2)(c)(iii) with:
(iii) international climate change obligations; and

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72 Section 69 repealed (Notification of intention regarding New Zealand
units)
Repeal section 69.

73 Cross-heading above section 70 amended
In the cross-heading above section 70, delete “and fishing”. 5

74 Sections 70 to 79 replaced
Replace sections 70 to 79 with:

70 Allocation plan issued
(1) The Climate Change (Pre-1990 Forest Land Allocation Plan) Order 2010 was

made under this section to issue an allocation plan in respect of pre-1990 forest 10
land.

(2) The allocation plan may be revoked but not amended or replaced.
(3) The allocation plan comes came into force on the day after the date it is was

presented to the House of Representatives.
(4) The allocation plan is a legislative instrument and a disallowable instrument for 15

the purposes of the Legislation Act 2012 and must be presented to the House of
Representatives under section 41 of that Act.

75 Section 81 amended (Entitlement to provisional allocation for eligible
industrial activities)

(1) In section 81, formula, replace the definition of variable LA with: 20

LA is the level of assistance for the eligible industrial activity for the year,
being,—
(a) for a moderately emissions-intensive eligible industrial activity,—

(i) 0.6 in each year until and including 2020; and
(ii) in each year after 2020, the level of assistance from the pre- 25

vious year less the applicable phase-out rate:
(b) for a highly emissions-intensive eligible industrial activity,—

(i) 0.9 in each year until and including 2020; and
(ii) in each year after 2020, the level of assistance from the pre-

vious year less the applicable phase-out rate 30
(2) In section 81, insert as subsection (2):
(2) In this section, the applicable phase-out rate is,—

(a) if regulations have not been made under section 84A or 84B that
relate to the eligible industrial activity,—
(i) 0.01 for each year after 2020 until and including 2030; and 35

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(ii) 0.02 for each year after 2030 until and including 2040; and
(iii) 0.03 for each year after 2040; and

(b) if regulations have been made under section 84A or 84B that set a dif-
ferent phase-out rate for the eligible industrial activity for the year, the
phase-out rate set under those regulations. 5

76 Section 83 amended (Annual allocation adjustment)
(1) In section 83(2), formula, replace the definition of variable LA with:

LA is the level of assistance for the activity for the year, being,—
(a) for a moderately emissions-intensive eligible industrial activity,—

(i) 0.6 in each year until and including 2020; and 10
(ii) in each year after 2020, the level of assistance from the pre-

vious year less the applicable phase-out rate:
(b) for a highly emissions-intensive eligible industrial activity,—

(i) 0.9 in each year until and including 2020; and
(ii) in each year after 2020, the level of assistance from the pre- 15

vious year less the applicable phase-out rate
(2) After section 83(2), insert:
(2A) In subsection (2), the applicable phase-out rate is,—

(a) if regulations have not been made under section 84A or 84B that
relate to the eligible industrial activity,– 20
(i) 0.01 for each year after 2020 until and including 2030; and
(ii) 0.02 for each year after 2030 until and including 2040; and
(iii) 0.03 for each year after 2040; and

(b) if regulations have been made under section 84A or 84B that set a dif-
ferent phase-out rate for the eligible industrial activity for the year, the 25
phase-out rate set under those regulations.

(3) Replace section 83(7) with:
(7) If a person is required to repay units under this section, then the units repaid

must be of a type that may be transferred to a surrender account at the time the
units are repaid. 30

77 New sections 84A to 84D inserted
After section 84, insert:

84A Regulations reducing general phase-out rate
(1) The Governor-General may, by Order in Council made on the recommendation

of the Minister, make regulations that set the phase-out rate to be used by all 35

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participants for the purposes of sections 81(1) and 83(2) for a year or years
beginning on or after 1 January 2031.

(2) The phase-out rate must be—
(a) less than the rate in sections 81(2)(a) and 83(2A)(a); and
(b) at least— 5

(i) 0.01 for a year in the period beginning on 1 January 2031 and
ending on 31 December 2040; or

(ii) 0.02 for a year in the period beginning on 1 January 2041 and
ending on 31 December 2050.

(3) The Minister may not recommend the making of regulations unless— 10
(a) the Climate Change Commission has recommended (under section

84D) that the phase-out rate be set at a lower rate than in sections
81(2)(a) and 83(2A)(a); and

(b) the Minister has complied with the requirements of section 84C.

84B Regulations increasing phase-out rate for specific activities 15
(1) The Governor-General may, by Order in Council made on the recommendation

of the Minister, make regulations that set the phase-out rate to be used in
respect of 1 or more eligible industrial activities for the purposes of sections
81(1) and 83(2) for an emissions budget period beginning on or after 1 January
2026. 20

(2) The phase-out rate must be more than the rate in sections 81(2)(a) and
83(2A)(a).

(3) Regulations made in respect of an emissions budget period must include a
statement of what phase-out rate the Minister intends to set in respect of the
subsequent emissions budget period. 25

(4) The Minister may not recommend the making of regulations unless—
(a) the Climate Change Commission has published a report (under section

84D) considering whether the phase-out rate for the eligible industrial
activity should be set at a higher rate than in sections 81(2)(a) and
83(2A)(a); and 30

(b) the Minister has complied with the requirements of section 84C.
(5) In order to apply to an emissions budget period, regulations must be made

before the beginning of the emissions budget period.
(6) Regulations may not be amended during an emissions budget period unless—

(a) the emissions budget for the emissions budget period has been revised; 35
or

(b) the Minister is satisfied that, since the regulations were made, there has
been a significant change that affects the considerations listed in sec-
tion 84C(3).

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(7) Before amending regulations, the Minister must seek advice from the Climate
Change Commission under section 84D.

84C Procedure for regulations setting phase-out rates
(1) Before recommending the making of regulations under section 84A or 84B,

the Minister must— 5
(a) consult, or be satisfied that the chief executive or the Climate Change

Commission has consulted, the persons (or representatives of those per-
sons) that appear to the consulter likely to be substantially affected by
the regulations; and

(b) be satisfied that the regulations are consistent with meeting the emis- 10
sions budget that will apply when the regulations are in force.

(2) The process for consultation must include—
(a) giving public notice of the proposed terms of the recommendation, and

of the reasons for it; and
(b) allowing at least 20 working days for interested persons to make submis- 15

sions; and
(c) considering the submissions.

(3) Before recommending the making of regulations under section 84B in respect
of an eligible industrial activity, the Minister must consider—
(a) any targets or budgets set for reducing emissions of greenhouse gases; 20

and
(b) New Zealand’s nationally determined contributions under the Paris

Agreement; and
(c) the level of risk of emissions leakage (increased emissions overseas as a

result of emissions reductions in New Zealand, for example an activity 25
being relocated outside of New Zealand to reduce the emissions-related
costs for the activity), based on—
(i) the emissions-related costs and policies in competing jurisdic-

tions; and
(ii) the markets for international trade in the products produced by the 30

activity; and
(iii) the ability of affected eligible persons to pass on increased costs to

customers; and
(d) the risk that the value of the allocation for the activity will exceed the

cost of meeting the emissions trading scheme obligations in relation to 35
the activity; and

(e) other sources of supply into the emissions trading scheme, including off-
shore emissions reductions; and

(f) the availability of low-emission technologies related to the activity; and

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(g) international climate change obligations; and
(h) the proper functioning of the emissions trading scheme; and
(i) the cost to the taxpayer of providing allocations for the activity; and
(j) any recommendations of the Climate Change Commission; and
(k) any other matters that the Minister considers relevant. 5

84D Climate Change Commission to advise on regulations setting phase-out
rates

(1) The Climate Change Commission may recommend that the Minister make
regulations under section 84A if the Commission is satisfied that there is an
ongoing and substantial risk that activities will be relocated outside of New 10
Zealand to reduce emissions-related costs.

(2) The Climate Change Commission may recommend that the Minister make
regulations under section 84B if the Commission is satisfied that it is appro-
priate to do so, having regard to the matters listed in section 84C(3).

(3) The Commission must make a report with its recommendations publicly avail- 15
able after providing it to the Minister.

(4) The Minister must, as soon as practicable, but within 16 weeks, after receiving
a report from the Commission—
(a) present a copy of the report to the House of Representatives; and
(b) if the Minister decides not to take action recommended by the Commis- 20

sion, or to take different action than that recommended by the Commis-
sion, publish a report giving reasons for departing from the recommen-
dations.

77 New sections 84A to 84C inserted
After section 84, insert: 25

84A Regulations setting decreased phase-out rates
(1) The Governor-General may, by Order in Council made on the recommendation

of the Minister, make or amend regulations to set a decreased phase-out rate to
be used—
(a) in respect of 1 or more eligible industrial activities for the purposes of 30

sections 81(1) and 83(2); and
(b) for a year or years beginning on or after 1 January 2031.

(2) The Minister must not recommend the making or amendment of regulations
under this section to set a decreased phase-out rate for an eligible industrial
activity unless— 35
(a) the Climate Change Commission has recommended (under section

5ZOB) that a decreased phase-out rate should be set for the activity; and

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(b) the Minister has considered the recommendation and complied with the
requirements of section 84C.

(3) In order to apply to a year, the regulations must be made or amended before the
beginning of the year.

(4) In this section, decreased phase-out rate means any rate that, even if it is 5
more than a rate previously set by regulations under this section, is—
(a) less than the rate in sections 81(2)(a) and 83(2A)(a); and
(b) at least—

(i) 0.01 for a year in the period beginning on 1 January 2031 and
ending on 31 December 2040; or 10

(ii) 0.02 for a year in the period beginning on 1 January 2041 and
ending on 31 December 2050.

84B Regulations setting increased phase-out rates
(1) The Governor-General may, by Order in Council made on the recommendation

of the Minister, make or amend regulations to set an increased phase-out rate to 15
be used—
(a) in respect of 1 or more eligible industrial activities for the purposes of

sections 81(1) and 83(2); and
(b) for an emissions budget period beginning on or after 1 January 2026.

(2) Regulations made in respect of an emissions budget period must include a 20
statement of what phase-out rate the Minister intends to set in respect of the
subsequent emissions budget period.

(3) The Minister must not recommend the making or amendment of regulations
under this section to set an increased phase-out rate for an eligible industrial
activity unless— 25
(a) the Climate Change Commission has recommended (under section

5ZOB) whether or not an increased phase-out rate should be set for the
activity; and

(b) the Minister has considered the recommendation and complied with the
requirements of section 84C. 30

(4) In order to apply to an emissions budget period, the regulations must be made
or amended before the beginning of the emissions budget period.

(5) However, the regulations may apply to an emissions budget period, despite
being made or amended during that period, if—
(a) the emissions budget for the emissions budget period has been revised; 35

or
(b) the Minister is satisfied that, since the regulations were made or last con-

sidered, there has been a significant change that affects the consider-
ations listed in section 84C(3).

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(6) In this section, increased phase-out rate means any rate that is more than, or
the same as, the rate in sections 81(2)(a) and 83(2A)(a), even if it is less
than a rate previously set by regulations under this section.

84C Procedure for regulations setting phase-out rates
(1) Before recommending the making or amendment of regulations under section 5

84A or 84B, the Minister must be satisfied that the regulations or amendments
are consistent with meeting the emissions budget that will apply when the regu-
lations or amendments are in force.

(2) See sections 3A and 3B for consultation requirements that apply to the making
or amendment of regulations under section 84A or 84B. 10

(3) Before recommending the making or amendment of regulations under section
84B in respect of an eligible industrial activity, the Minister must consider—
(a) any targets or budgets set for reducing emissions of greenhouse gases;

and
(b) New Zealand’s nationally determined contributions under the Paris 15

Agreement; and
(c) the level of risk of emissions leakage (increased emissions overseas as a

result of emissions reductions in New Zealand, for example, an activity
being relocated outside of New Zealand to reduce the emissions-related
costs for the activity), based on— 20
(i) the emissions-related costs and policies in competing jurisdic-

tions; and
(ii) the markets for international trade in the products produced by the

activity; and
(iii) the ability of affected eligible persons to pass on increased costs to 25

customers; and
(d) the risk that the value of the allocation for the activity will exceed the

cost of meeting the emissions trading scheme obligations in relation to
the activity; and

(e) other sources of supply into the emissions trading scheme, including off- 30
shore emissions reductions; and

(f) the availability of low-emission technologies related to the activity; and
(g) international climate change obligations; and
(h) the proper functioning of the emissions trading scheme; and
(i) the cost to the taxpayer of providing allocations for the activity; and 35
(j) the recommendations made by the Climate Change Commission under

section 5ZOB; and
(k) any other matters that the Minister considers relevant.

(4) Subsection (5) applies if—

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(a) the Minister decides to recommend the making of regulations under
section 84A or 84B but not as recommended by the Commission; or

(b) the Minister decides to recommend the amending of regulations under
section 84A or 84B but the Commission—
(i) recommended that they be amended differently; or 5
(ii) did not recommend that they be amended at all; or

(c) the Minister decides not to recommend the making or amending of regu-
lations under section 84A or 84B despite the recommendation of the
Commission.

(5) The Minister must, as soon as is reasonably practicable, but within 16 weeks, 10
after receiving the Commission’s recommendation, prepare a report of the rea-
sons for the difference between the Minister’s and the Commission’s recom-
mendation and—
(a) present a copy of the report to the House of Representatives; and
(b) make the report publicly available. 15

78 Section 85 amended (Allocation of New Zealand units in relation to
agriculture)
In section 85(2), formula, definition of variable LA, paragraph (a), replace
“0.9” with “0.95”.

79 Section 85A amended (Temporary suspension of phase-out rates for 20
assistance under sections 81, 83(2), and 85(2))

(1) Replace the heading to section 85A with “Temporary suspension of phase-
out rate for assistance under section 85(2)”.

(2) In section 85A(1), replace “rates” with “rate”.
(3) In section 85A(1) and (2), replace “sections 81, 83(2), and 85(2)” with “section 25

85(2)”.
(4) In section 85A(2)(a), replace “rates in those sections may not reduce the level

of assistance for an eligible activity from its 2012 level or the level in the first
year in which full surrender obligations are applicable for the activity (as the
case may be)” with “rate in that section may not reduce the level of assistance 30
for an eligible activity from the level in the first year in which full surrender
obligations are applicable for the activity”.

(5) In section 85A(2)(b), delete “relevant”.
(6) Replace section 85A(3) with:
(2A) Before recommending the making of an Order in Council under subsection 35

(2)(a)(ii), the Minister must consider the advice of the Climate Change Com-
mission about whether the phase-out rates should continue to be suspended.

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(3) The Minister must not make a recommendation under subsection (2)(a)(ii)
before surrender obligations for the relevant participants start.

79A Section 86 amended (Applications for allocation of New Zealand units for
industry and agriculture)
Replace section 86(1) with: 5

(1) An eligible person who wishes to be allocated New Zealand units for an eli-
gible industrial activity or eligible agricultural activity under this subpart must
apply to the EPA in the relevant period under subsection (1A), unless this
subpart otherwise provides.

(1A) The application must be made,— 10
(a) for a provisional allocation for an eligible industrial activity, in the

period starting on 1 January and ending on 30 April in the year in respect
of which the allocation is sought:

(b) for an allocation for an eligible industrial activity (other than a provi-
sional allocation), in the period starting on 1 January and ending on 15
30 April in the year after the year in respect of which the allocation is
sought:

(c) for an allocation for an eligible agricultural activity, in the period starting
on 1 January and ending on 31 March in the year after the year in respect
of which the allocation is sought. 20

79B Section 86A amended (Provisional allocation to industry in and after 2013)
In section 86A, replace “section 86(1)(a)” with “section 86(1A)(a)”.

80 Section 86B amended (Decisions on applications for allocations of New
Zealand units to industry and agriculture)

(1) In the heading to section 86B, delete “and agriculture”. 25
(2) In section 86B(1), after “section 86”, insert “in respect of an eligible industrial

activity”.
(3) In section 86B(2)(a)(i), delete “, in the case of an eligible industrial activity,”.
(4) Replace section 86B(2)(b) with:

(b) comply with section 86BA, as long as the number of units allocated is 30
greater than zero, even after any adjustment made under subsection (1).

81 New section 86BA inserted (Transfer of allocated units, less any units that
must be surrendered or repaid)
After section 86B, insert:

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86BA Transfer of allocated units, less any units that must be surrendered or
repaid

(1) This section applies to the units allocated to an applicant under section 86B,
after any adjustment made under section 86B(1).

(2) The EPA must calculate the following (an applicant’s offset units): 5
(a) the units (if any) that the applicant was required to, but did not, surren-

der by a deadline before the start of the year to which the allocation
relates:

(b) the units (if any) that the applicant was required to, but did not, repay to
a Crown holding account before the start of the year to which the alloca- 10
tion relates.

(3) However, if the offset units exceed the number of allocated units, the offset
units are recalculated to equal the number of allocated units by counting units
as offset units starting from the units that were required to be surrendered or
repaid by the earliest deadlines. 15

(4) If there are any offset units, the EPA must notify the applicant of the following:
(a) the number of offset units required for surrender:
(b) the number of offset units required for repayment:
(c) that the offset units will be deducted from the transfer of allocated units

to the applicant. 20
(5) The EPA must direct the Registrar to transfer units to achieve the following

results:
(a) the offset units required for surrender are transferred to a surrender

account designated by the EPA:
(b) the offset units required for repayment are transferred to a Crown hold- 25

ing account designated by the EPA:
(c) if any allocated units remain after deducting the offset units, they are

transferred to the holding account notified in the person’s application.

81 New sections 86BAA to 86BB inserted
After section 86B, insert: 30

86BAA Decisions on applications for allocations of New Zealand units to
agriculture

(1) This section applies if—
(a) the EPA receives an application under section 86 in respect of an eligible

agricultural activity; and 35
(b) the applicant has submitted any emissions returns that are due.

(2) The EPA must decide—

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(a) whether the applicant is eligible to receive an allocation in respect of the
application:

(b) if in the EPA’s opinion the applicant is eligible for an allocation, the
number of units the applicant is entitled to be allocated.

(3) If the EPA decides that an applicant is entitled to receive an allocation, then the 5
EPA must—
(a) notify the applicant of—

(i) the number of units the applicant has been allocated; and
(ii) the person’s right under section 144 to seek a review of the alloca-

tion decision; and 10
(b) comply with section 86BB.

(4) If the EPA decides that an applicant is not eligible to receive an allocation, then
the EPA must notify the applicant of—
(a) the EPA’s decision; and
(b) the reasons for the decision; and 15
(c) the person’s right under section 144 to seek a review of the allocation

decision.
(5) The EPA must, as soon as practicable after deciding an eligible person’s alloca-

tion for an eligible agricultural activity in respect of a year,—
(a) publish the decision in the Gazette; and 20
(b) ensure that it is accessible via the Internet site of the EPA.

(6) However, the EPA is not required to publish the allocation of an eligible person
for an eligible agricultural activity in respect of a year, or ensure that it is
accessible via the Internet, if the EPA considers that publishing that informa-
tion would be likely to prejudice unreasonably the commercial position of the 25
eligible person who received the allocation.

86BA Transfer of allocated units to industry, less any units that must be
surrendered or repaid
The EPA must apply section 64A as follows:
(a) the units allocated to an applicant under section 86B, after any adjust- 30

ment made under section 86B(1), are the potential transfer units:
(b) the applicant is the recipient:
(c) the start of the year to which the allocation relates is the relevant time.

86BB Transfer of allocated units to agriculture, less any units that must be
surrendered or repaid 35

(1) This section applies to the units allocated to an applicant under section
86BAA (the potential transfer units).

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(2) The EPA must calculate the specified units by counting units in the following
order, but stopping once they equal the number of potential transfer units (if
they do):
(a) first, the units required for surrender as a result of the assessment for the

year to which the allocation relates: 5
(b) second, the units (if any) that the recipient was required to, but did not,

surrender, or repay to a Crown holding account, as a result of an assess-
ment for an earlier year, starting from the units that were required to be
surrendered or repaid by the earliest dates.

(3) The EPA must notify the applicant of the following: 10
(a) the number of specified units calculated under subsection (2)(a) that

are required for surrender:
(b) the number of specified units calculated under subsection (2)(b) that

are required for surrender:
(c) the number of specified units calculated under subsection (2)(b) that 15

are required for repayment:
(d) that the specified units will be deducted from the potential transfer units

that are transferred to the recipient.
(4) The EPA must direct the Registrar to transfer—

(a) the specified units required for surrender to a surrender account designa- 20
ted by the EPA; and

(b) the specified units required for repayment to a Crown holding account
designated by the EPA; and

(c) any potential transfer units left after the specified units are deducted to
the applicant’s holding account. 25

(5) The transfer of the specified units for surrender or repayment satisfies—
(a) the recipient’s entitlement to be transferred those units; and
(b) the recipient’s obligation to surrender or repay the related units.

(6) To avoid doubt, the applicant remains liable to surrender or repay any units that
are not counted as specified units (because they exceed the number of potential 30
transfer units).

82 Section 86C amended (Reconsideration of allocation decisions)
(1) In section 86C(1), after “section 86B”, insert “or 86BAA”.
(2) Repeal section 86C(5A).

83 Section 86E amended (Minister or EPA or chief executive may require 35
further information for purpose of carrying out functions under subpart)

(1) In the heading to section 86E, replace “Minister or EPA or chief executive”
with “EPA”.

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(2) In section 86E(1), replace “a determination under section 77 or 78 or a decision
under section 86B, the Minister or EPA or chief executive, as appropriate,”
with “a decision under section 86B or 86BAA, the EPA”.

(3) In section 86E(1), replace “the Minister or EPA or chief executive” with “the
EPA”. 5

(4) In section 86E(1)(c), replace “a determination or decision” with “the decision”.
(5) In section 86E(2), delete “determination or”.
(6) Replace section 86E(4) with:
(4) The EPA may, for the purpose of verifying whether a decision made under sec-

tion 86B or 86BAA was correct or whether it should be reconsidered, give a 10
notice to a person who has been allocated New Zealand units under that section
requiring the person to supply to the EPA any records, data, or other informa-
tion that the person is required to keep in relation to the allocation.

(7) Replace section 86E(6) with:
(6) A person who fails to comply with a notice under this section within the period 15

specified in the notice, or any further period agreed with the EPA, and who has
applied for an allocation under section 86, is not entitled to receive an alloca-
tion in respect of that application.

84 Section 87 amended (Functions of EPA)
(1) In section 87(1)(b), (e), and (g), replace “this Part and Part 5” with “the ETS 20

participant provisions”.
(2) In section 87(1)(e), replace “and the provisions of any regulations made under

this Part” with “and any regulations made under those provisions”.

85 Section 88 amended (Directions to EPA)
In section 88(1), replace “this Part, Part 5, or any regulations made under this 25
Part or Part 5” with “the ETS participant provisions or any regulations made
under those provisions”.

86 Section 89 amended (EPA to publish certain information)
(1AA) In section 89(1), replace “in accordance with subsection (2)” with “for each

reporting year”. 30
(1AB) In section 89(1)(e), replace “subsections (3) and (4)” with “subsection (4)”.
(1) In section 89(1)(f)(i), replace “under section 65(1), 118(2), 189(4), 191, or

193” with “required by this Act”.
(2) In section 89(1)(f)(i) 89(1)(f)(ii), replace “under section 65(4), 118(5), 123(3)

or (6), 125, 189, 191, or 193” with “as required by this Act”. 35
(3) After section 89(1), insert:
(1A) The EPA must publish a list each year that records—

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91



(a) each penalty imposed in that year under—
(i) section 134; and
(ii) sections 134A to 134D, if the EPA is satisfied that the penalty

was imposed for behaviour that was grossly careless or knowing;
and 5

(b) each penalty still owing at the end of the year that was imposed in a pre-
vious year under—
(i) section 134; and
(ii) sections 134A to 134D, if the EPA is satisfied that the penalty

was imposed for behaviour that was grossly careless or knowing. 10
(1B) The list must contain the following details in respect of each penalty:

(a) the name of the person on whom the penalty was imposed:
(b) the section under which the penalty was imposed:
(c) the amount of the penalty:
(d) the date that the last payment for the penalty was due and, if the penalty 15

has been paid in full, the date on which the penalty and any interest on it
was paid in full:

(e) in the case of a penalty imposed under section 134, the provision
under which the person was liable to surrender or repay units:

(f) in the case of a penalty imposed under sections 134A to 134D, 20
whether the penalty was imposed for behaviour that was grossly careless
or behaviour that was knowing.

(4) In section 89(2)(a) and (b), replace “subsection (1)” with “subsections (1) to
(1B)”.

(5) Replace section 89(3) and (4) with: 25
(3) The EPA is required to publish only—

(a) the total quantity of emissions, and the total quantity of removals, in
aggregate for standard forestry; and

(b) the total quantity of emissions, and the total quantity of removals, in
aggregate for permanent forestry. 30

(3) Repeal section 89(3).

87 New section 89A inserted (EPA to publish participant data on emissions
and removals)
After section 89, insert:

89A EPA to publish participant data on emissions and removals 35
(1) The EPA must publish, for each participant or consolidated group from which

it receives emissions returns,—

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(a) the name of the participant, or names of the participants in the consoli-
dated group; and

(b) the net emissions or removals set out in the participant’s or group’s
return or returns, broken down by activity if the return relates to more
than 1 activity; and 5

(c) the period to which the return or returns relate.
(1) The EPA must publish, for each participant or consolidated group for whom

there is an emissions return,—
(a) the name of the participant, or names of the participants in the consoli-

dated group; and 10
(b) the period to which the return or returns relate; and
(c) the data in paragraphs (d) to (f) in tonnes of carbon dioxide equiva-

lent and—
(i) broken down by participant if a return relates to more than 1 par-

ticipant; and 15
(ii) broken down by activity if a return relates to more than 1 activity,

except that the emissions or removals of a participant in any for-
estry activity must be combined for all of their forestry activities;
and

(d) if available, the emissions set out in the participant’s or group’s return or 20
returns; and

(e) if available, the removals set out in the participant’s or group’s return or
returns; and

(f) if the data in paragraphs (d) and (e) is not available, the net emissions
or removals set out in the participant’s or group’s return or returns. 25

(2) The EPA—
(a) must publish the information at least annually, as soon as practicable

after the date on which emissions returns are due; and
(b) may publish the information, in whole or in part, at any other time and in

whatever manner and format that the EPA considers appropriate. 30
(3) The EPA must publish the information in whatever manner and format that the

EPA considers appropriate.
(4) The EPA must, at least 10 working days before publishing the information,

give notice on its Internet site of the date on which it will publish the informa-
tion. 35

88 Section 90 amended (EPA may prescribe form of certain documents)
(1) In section 90(1), replace “this Part and Part 5” with “the ETS participant provi-

sions and Part 2”.
(2) Replace section 90(1)(b) with:

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(b) different forms or formats for different classes of participant or person or
for different activities or purposes; and

(3) In section 90(1)(c), replace “this Part or Part 5” with “the ETS participant pro-
visions or Part 2”.

89 Section 91 amended (Approval of unique emissions factors) 5
In section 91(1), replace “section 62(b)” with “section 62(1)(b)”.

90 New section 91A inserted (Correction of unique emissions factors)
After section 91, insert:

91A Correction of unique emissions factors
(1) If the EPA is satisfied that the unique emissions factor approved for a partici- 10

pant under section 91 is incorrect for any reason, the EPA may amend the
approval to correct the unique emissions factor.

(2) The EPA must—
(a) notify the applicant of the amended approval; and
(b) publish a notice in the Gazette that specifies— 15

(i) the name of the participant; and
(ii) a description of the activity; and
(iii) the details of the unique emissions factor that the EPA has, by

amendment, approved the participant to use when calculating
emissions or removals for the activity (the corrected unique 20
emissions factor); and

(iv) the date on which the corrected unique emissions factor has effect,
which must be no earlier than the date on which the unique emis-
sions factor became incorrect.

(3) The corrected unique emissions factor has effect on and from after the date spe- 25
cified by the notice in the Gazette, even if that date has passed.

91 Section 92 amended (Recognition of verifiers)
In section 92(1), replace “section 62(a)” with “section 62(1)(a)”.

92 Section 93 amended (Appointment of enforcement officers)
In section 93(1), after “Part”, insert “(which relate to verification and inquiry 30
about compliance with the ETS participant provisions)”.

93 Section 94 amended (Power to require information)
(1) In section 94(1)(a), replace “this Part and Part 5” with “the ETS participant

provisions”.
(2) Replace section 94(1)(b) with: 35

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(b) ascertaining whether, or how, the EPA or the chief executive, as appro-
priate, should exercise any powers under the ETS participant provisions.

94 Section 95 amended (Power to inquire)
In section 95(1), replace “this Part or Part 5” with “the ETS participant provi-
sions”. 5

95 Section 96 amended (Inquiry before District Court Judge)
In section 96(1), replace “this Part or Part 5” with “the ETS participant provi-
sions”.

96 Section 99 amended (Obligation to maintain confidentiality)
(1) In section 99(1)(a), (2)(a), and (4)(a), replace “this Part and Part 5” with “the 10

ETS participant provisions”.
(2) In section 99(2)(b)(vi), replace “any obligation under the Convention or the

Protocol” with “international climate change obligations”.
(3) Replace section 99(4)(c) with:

(c) providing information to any person about whether— 15
(i) any land has a certain forestry classification or is exempt land; or
(ii) they consider any land to be land that could be given any particu-

lar forestry classification available under section 196A(a).

97 Section 100 amended (Power of entry for investigation)
(1) In section 100(1), replace “this Part or Part 5” with “the ETS participant provi- 20

sions”.
(2) In section 100(2)(d), replace “this Part and Part 5” with “the ETS participant

provisions”.

98 Section 104 amended (Information obtained under section 100 or 101 only
admissible in proceedings for alleged breach of obligations imposed under 25
this Part and Part 5)

(1) In the heading to section 104, replace “this Part and Part 5” with “ETS par-
ticipant provisions”.

(2) In section 104, replace “this Part and or Part 5” with “the ETS participant pro-
visions”. 30

99 Section 107 amended (Applications for emissions rulings)
(1) Replace section 107(1)(b) and (c) with:

(b) whether the person—
(i) is a participant in respect of an activity listed in Schedule 3 or is

eligible to register as a participant in respect of an activity listed in 35
Schedule 4; or

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(ii) would be either of those things if certain proposals were carried
out or events happened:

(c) the correct application of any provision contained in regulations made
under section 161A, 161G, 163, 164, 167, 168, 185A, 186F, 194EG,
194LA, 194TA, 194UC, 196G, or 197A in respect of a particular 5
matter specified in the person’s application:

(ca) whether any of this Act’s requirements that relate to a decision that the
EPA can make about forest land on land that the person has, or will have,
an interest in are satisfied, or would be satisfied if certain proposals were
carried out or events happened—for example, the requirements that must 10
be satisfied—
(i) for any forest land that is cleared to not be treated as deforested

(for the purposes of this Act) under section 179A:
(ii) for pre-1990 forest land to be eligible for a decision to be made

under section 184(5)(a) (exemptions for deforestation of land with 15
tree weeds):

(iii) for the EPA to approve an application relating to forest land:
(2) Repeal section 107(3).

100 New section 107A inserted (Insufficient information provided for ruling on
entire application) 20
After section 107, insert:

107A Insufficient information provided for ruling on entire application
(1) If the EPA is satisfied that an application under section 107 does not include all

information that is relevant to a proper consideration of the application, the
EPA must give notice to the applicant— 25
(a) requesting any further information from the applicant that the EPA con-

siders necessary to assist in the consideration of the application; and
(b) if the EPA already has information that is relevant to the application,

describing the information and inviting the applicant to comment on or
object to the information. 30

(2) The EPA must—
(a) provide a reasonable deadline for the applicant to reply to the notice; and
(b) consider as part of the application—

(i) any further information provided by the applicant; and
(ii) the information already held by the EPA that is relevant to the 35

application, and the applicant’s comments on or objections to that
information.

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(3) If, after that, the EPA is satisfied that it has sufficient information to make a
ruling on only part of the matter applied for (such as part of an activity or part
of a geographical area), the EPA may—
(a) give notice of that decision to the applicant; and
(b) make a ruling under section 109 in respect of only that part of the matter. 5

101 Section 108 amended (Matters in relation to which EPA may decline to
make emissions rulings)

(1) In section 108(1)(b), replace “section 107(3)” with “section 107A(1)”.
(2) In section 108(2)(g)(i), after “ruling”, insert “but subject to section 107A”.

102 Section 109 amended (Making of emissions rulings) 10
(1) In section 109(1), replace “in respect of which a ruling is sought under section

107” with “applied for”.
(2) In section 109(1)(b), replace “section 107(3)” with “section 107A”.
(3) Replace section 109(3) and (4) with:
(3) A ruling may be made subject to any conditions that the EPA considers appro- 15

priate, including any condition that a proposal is carried out or that something
happens (see section 107(1)(b)(ii)).

Example
The EPA may rule that a person is eligible to register as a participant in an activity
of standard forestry listed in Part 1 of Schedule 4 on the condition that the relevant 20
land is planted in forest species and meets the definition of forest land.

(4) Subsection (1) is subject to section 108 and the EPA’s discretion in section
107A(3)(b) to make a ruling on only part of a matter.

103 Section 116 amended (Effect of emissions rulings)
(1) In section 116(1), replace “in respect of which a ruling is sought under section 25

107” with “that is ruled on”.
(2) In section 116(2)(a), replace “in relation to which the ruling was sought” with

“that is ruled on”.
(3) After section 116(2), insert:
(2A) However, an emissions ruling is personal to the applicant and does not apply 30

to, and cannot be transferred to, anyone else (including where land to which a
ruling relates is transferred).

104 Section 117 amended (EPA may publish certain aspects of emissions
rulings)

(1) In section 117(1), replace “this Part or Part 5” with “the ETS participant provi- 35
sions”.

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(2) In section 117(1), after “ruling”, insert “in whatever manner and format that the
EPA considers appropriate”.

105 Section 118 amended (Submission of final emissions returns)
After section 118(3), insert:

(3A) However, subsections (1) and (3) do not apply to a participant in an activity of 5
standard forestry or permanent forestry (on post-1989 forest land), who must
instead submit emissions returns as required by Part 5.

106 Section 120 amended (Amendment to emissions returns by EPA)
In section 120, insert as subsections (2) and (3) subsection (2):

(2) Information contained in an emissions return may be incorrect, for example, 10
because it is based on an incorrect unique emissions factor that was approved
for the participant under section 91.

(3) If the EPA proposes to amend a person’s emissions return, the EPA must notify
the person of that proposal as soon as practicable.

107 Section 123 amended (Effect of amendment or assessment) 15
In section 123(2), replace “section 134(3)(b)” with “section 134A or 134C”.

108 Section 124 amended (Reimbursement of units by EPA)
Replace section 124(1) and (2) with:

(1) If the EPA is required by this Act to arrange for the reimbursement of units to a
person, the EPA must direct the Registrar to transfer the applicable number of 20
New Zealand units or approved overseas units from the appropriate surrender
account or Crown holding account to the person’s holding account.

(2) However, subsection (1) does not apply to the extent that subsection (2A)
requires units to be transferred elsewhere.

(2A) The EPA must apply section 64A as follows: 25
(a) the units the person is entitled to be reimbursed are the potential trans-

fer units:
(b) the person is the recipient:
(c) the time when the requirement to reimburse arose is the relevant time.

109 Section 125 replaced (Repayment of units by persons in case of error) 30
Replace section 125 with:

125 Repayment of units by persons in case of error
(1) The EPA may, if satisfied that that, as a result of an error, units to which a per-

son is not entitled under the ETS participant provisions have been transferred
from a Crown holding account or other account held by the Crown to the per- 35

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son’s holding account, give a notice to the person requiring that person to repay
that number of units.

(2) The person must, within 30 days after the notice is given, repay that number of
units by transferring units to the Crown holding account designated in the
notice. 5

(3) The repaid units must be of a type that may be transferred to a surrender
account after when they are repaid.

110 Section 127 amended (Time bar for amendment of emissions returns)
(1) In section 127(1), replace “submitted under” with “required or permitted by”.
(2) In section 127(1)(a), replace “section 189 or 193” with “those specified in 10

paragraph (b)”.
(3) In section 127(1)(a), replace “under section 187 or 191” with “required by sec-

tion 187 or 191BA”.
(4) In section 127(1)(b), replace “section 189 or 193” with “section 189AA,

189AB, 192, 194CA, 194DA, 194GA, 194KC, 194NA, or 194QB”. 15
(3) Replace section 127(2) with:
(2) However,—

(a) if a person submits an emissions return on receiving a notice from the
EPA under section 134A(1), the period of 4 or 7 years in which the
EPA may amend an emissions return under subsection (1)(a) or (b) starts 20
from the date of submission of the emissions return; and

(b) the EPA may amend an emissions return or assessment at any time to
give effect to the correction of a unique emissions factor under section
91A; and

(c) if the EPA is satisfied that an emissions return was fraudulent, was wil- 25
fully misleading, or deliberately omitted mention of emissions or remov-
als in respect of which an emissions return was required to be submitted,
the EPA may amend the emissions return at any time, under section 120,
so as to—
(i) increase the number of units required to be surrendered by the par- 30

ticipant:
(ii) decrease the number of New Zealand units to which the partici-

pant is entitled in respect of removal activities.
(3) Without limiting subsection (2)(c), that paragraph will apply in respect of all

emissions returns by a person for an activity if the EPA is satisfied that the per- 35
son’s application to be registered was fraudulent or wilfully misleading.

(5) After section 127(2), insert:

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(3) Without limiting subsection (2), that subsection will apply in respect of all
emissions returns by a person for an activity if the EPA is satisfied that the per-
son’s application to be registered was fraudulent or wilfully misleading.

111 New sections 128A and 128B and cross-heading inserted
After section 128, insert: 5

Notices required from participants

128A EPA may act if participant fails to give notice
(1) The EPA may act under this section if it is satisfied that a participant has failed

to give a notice in accordance with section 194JB or 194QB (the notice
provision). 10

(2) The EPA may,—
(a) if no notice has been given, prepare the notice that ought to have been

given (including any emissions return, new unit balance report, or other
information that should have accompanied it); or

(b) if a notice has been given but is not complete, complete the notice 15
(including by preparing or completing any emissions return, new unit
balance report, or other information that should have accompanied it).

(3) If the EPA has insufficient information to enable it to do so, it may make
assumptions or estimates to enable the notice or accompanying information to
be prepared. 20

(4) If the notice provision requires 2 or more participants to give a joint notice and
a notice is given by some but not all of them,—
(a) the EPA may accept it as a notice from the participants giving it and deal

with it accordingly; and
(b) if the EPA does so, the other participants are to be treated as having 25

failed to give the required notice.
(5) Before taking action under this section, the EPA must notify the participant of

its intention to do so and give them at least 60 working days to give or correct
the required notice.

(6) If the participant gives or corrects the required notice by that deadline, it must 30
be treated as having been given in accordance with the notice provision.

(7) The EPA may still take action under this section if it is unable to notify the par-
ticipant of its intention to do so because it is not reasonably practicable to iden-
tify or locate them or their address.

(8) Despite subsection (2), for a notice required by section 194JB, the EPA 35
cannot identify any land as excess forest land.

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128B Effects of EPA acting after participant fails to give notice
(1) Anything prepared by the EPA acting under section 128A—

(a) must be taken to be correct; and
(b) is to be treated as if it had been given to the EPA—

(i) by the participant who was required to give it; and 5
(ii) in accordance with the notice provision; and
(iii) on the last day on which it could have been given under that pro-

vision.
(2) As soon as practicable after taking action under section 128A, the EPA must

notify the participant of the following: 10
(a) the action taken (including a copy of anything prepared by the EPA) and

the reasons for taking it; and
(b) the participant’s right to seek a review of the decision under section 144.

112 Section 129 amended (Offences in relation to failure to comply with
various provisions) 15

(1) In section 129(1)(a), replace “(requirement to collect data or other information,
calculate emissions and removals, and keep records)” with “(other than by sub-
mitting an emissions return containing incorrect calculations)”.

(2) In section 129(1)(b)(ii), delete “under section 65, 118, 189, 191, or 193”.
(3) Repeal section 129(1)(b)(iii)(B). 20
(4) In section 129(1)(b)(iii)(C), replace “by a” with “by the”.

113 Section 132 amended (Other offences)
(1) In section 132(1)(c), replace “(requirement to collect data or other information,

calculate emissions and removals, and keep records)” with “(other than by sub-
mitting an emissions return containing incorrect calculations)”. 25

(2) In section 132(1)(d), delete “under section 65, 118, 189, 191, or 193”.
(3) Repeal section 132(1)(e)(ii).
(4) In section 132(1)(e)(iii), replace “by a” with “by the”.
(5) In section 132(1)(f) and (g), replace “this Part or Part 5” with “the ETS partici-

pant provisions”. 30

114 Section 133 amended (Evasion or similar offences)
(1) In section 133(2)(b) 133(1)(b), delete “under section 65, 118, 189, 191, or

193”.
(2) Repeal section 133(1)(c)(ii).
(3) In section 133(1)(c)(iii), replace “by a” with “by the”. 35

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(4) In section 133(1)(d), replace “this Part or Part 5” with “the ETS participant
provisions”.

(5) In section 133(1)(e), replace “this Part and Part 5” with “the ETS participant
provisions”.

115 Sections 134 to 136 replaced 5
Replace sections 134 to 136 with:

134 Penalty for failing to surrender or repay units by due date
(1) This section applies if a person fails, by the applicable due date,—

(a) to surrender units that the person is required to surrender; or
(b) to repay units that the person is required to repay. 10

(2) The person must (in addition to surrendering or repaying the units) pay to the
EPA a penalty calculated as follows:

3 × a × b
where—
a is the number of units that the person failed to surrender or repay by the 15

due date
b is the price, in dollars, of carbon per tonne on the due date, as set by or

in accordance with regulations made under section 30W.
(3) The EPA must give a notice to the person that—

(a) refers to the person’s failure to surrender or repay units by the due date 20
and the provision under which the person is liable to surrender or repay
the units; and

(b) refers to any relevant notice that the EPA has given the person in respect
of the requirement to surrender or repay the units (for example, a notice
given under section 123(1)); and 25

(c) states the number of units that the person must surrender or repay; and
(d) states the amount of the penalty that the person must pay under subsec-

tion (2); and
(e) advises that, unless the units are surrendered or repaid and the penalty is

paid in full within 20 working days after the notice is given, interest on 30
the amount of the penalty will accrue in accordance with section 137.

(4) If the EPA notifies a person that the EPA proposes to amend the person’s emis-
sions return under section 120, the EPA must reverse any penalty charged
under this section that relates to the original return.

134A Penalty for failing to submit emissions return by due date 35
(1) This section applies if—

(a) a person fails to submit an emissions return by the due date; and

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(b) the EPA is satisfied that the person has not taken reasonable care; and
(c) the EPA gives a notice to the person stating that—

(i) the person has failed to submit the emissions return by the due
date; and

(ii) if the person does not submit the return within 10 working days 5
after the notice is given, the EPA will make an assessment under
section 121 and penalties will apply; and

(d) the person fails to submit the emissions return within 10 working days
after the notice is given.

(2) If an assessment made under section 121 results in a liability for the person to 10
surrender or repay units, the person must (in addition to surrendering or repay-
ing the units) pay to the EPA a penalty calculated as follows:

a × b × c
where—
a is the number of units that the person is liable to surrender or repay 15
b is the price, in dollars, of carbon per tonne on the due date, as set by or

in accordance with regulations made under section 30W
c is the culpability factor determined under subsection (3).

(3) The culpability factor for a person is determined using this table:

Person’s level of culpability

Did person voluntarily
disclose failure or error to
EPA before being informed
of it by EPA?

Culpability
factor

Person did not take reasonable care, but
was not grossly careless and did not
knowingly fail

Yes 0.1
No 0.2

Person was grossly careless, but did not
knowingly fail

Yes 0.2
No 0.4

Person knowingly failed Yes 1.0
No 1.0

(4) If an assessment made under section 121 results in an entitlement for the per- 20
son to receive units, the person must pay to the EPA a penalty of $1,000.

(5) The EPA must give a notice to the person that—
(a) refers to the person’s failure to submit the emissions return by the due

date and the provision under which the person is required to submit the
return; and 25

(b) refers to the notice issued under subsection (1)(c); and
(c) specifies the amount of the penalty that the person must pay under sub-

section (2) or (4); and
(d) advises that the person may request to enter into a deferred payment

arrangement under section 135A; and 30

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(e) advises that, unless the penalty is paid in full within 20 working days
after the notice is given, interest on the amount of the penalty will accrue
in accordance with section 137.

134B Penalty for failing to submit annual or closing allocation adjustment by
due date 5

(1) This section applies if—
(a) a person fails to submit an annual allocation adjustment under section 83

or a closing allocation adjustment under section 84 by the due date; and
(b) the EPA is satisfied that the person has not taken reasonable care; and
(c) the EPA gives a notice to the person stating that— 10

(i) the person has failed to submit the allocation adjustment by the
due date; and

(ii) if the person does not submit the allocation adjustment within 10
working days after the notice is given, the EPA will make a deci-
sion under section 86B(4) and penalties will apply; and 15

(d) the person fails to submit the allocation adjustment within 10 working
days after the notice is given.

(2) If the decision made under section 86B(4) results in a liability for the person to
surrender or repay units, the person must (in addition to surrendering or repay-
ing the units) pay to the EPA a penalty calculated as follows: 20

a × b × c
where—
a is the number of units that the person is liable to surrender or repay
b is the price, in dollars, of carbon per tonne on the due date, as set by or

in accordance with regulations made under section 30W 25
c is the culpability factor determined under subsection (3).

(3) The culpability factor for a person is determined using this table.

Person’s level of culpability

Did person voluntarily
disclose failure or error to
EPA before being informed
of it by EPA?

Culpability
factor

Person did not take reasonable care, but
was not grossly careless and did not
knowingly fail

Yes 0.1
No 0.2

Person was grossly careless, but did not
knowingly fail

Yes 0.2
No 0.4

Person knowingly failed Yes 1.0
No 1.0

(4) If the decision made under section 86B(4) results in an entitlement for the per-
son to receive units, the person must pay to the EPA a penalty of $1,000.

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(5) The EPA must give a notice to the person that—
(a) refers to the person’s failure to submit the allocation adjustment by the

due date and the provision under which the person is required to submit
the allocation adjustment; and

(b) refers to the notice issued under subsection (1)(c); and 5
(c) specifies the amount of the penalty that the person must pay under sub-

section (2) or (4); and
(d) advises that the person may request to enter into a deferred payment

arrangement under section 135A; and
(e) advises that, unless the penalty is paid in full within 20 working days 10

after the notice is given, interest on the amount of the penalty will accrue
in accordance with section 137.

134C Penalty for submitting incorrect emissions return
(1) This section applies if—

(a) the EPA amends a person’s emissions return under section 120; and 15
(b) the EPA is satisfied that the amendment was needed because the person

failed to take reasonable care.
(2) The person must (in addition to surrendering or repaying any units as required

by the amendment) pay to the EPA a penalty of an amount determined in
accordance with this section. 20

(3) If the effect of the amendment is that the person is required to surrender or
repay additional units, or is entitled to receive fewer units, the penalty is calcu-
lated as follows:

a × b × c
where— 25
a is the lesser of the number of units the person should have surrendered,

repaid, or received (had the emissions return been correct) and the num-
ber of additional units that the person is liable to surrender or repay as a
result of the amendment

b is the price, in dollars, of carbon per tonne on the date on which the 30
emissions return was due, as set by or in accordance with regulations
made under section 30W

c is the culpability factor determined under subsection (4).
(4) The culpability factor for a person is determined using this table:

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Person’s level of culpability

Did person voluntarily
disclose failure or error to
EPA before being informed
of it by EPA?

Culpability
factor

Person did not take reasonable care, but
was not grossly careless and did not
knowingly fail

Yes 0.1
No 0.2

Person was grossly careless, but did not
knowingly fail

Yes 0.2
No 0.4

Person knowingly failed Yes 1.0
No 1.0

(5) If the effect of the amendment is that the person has surrendered or repaid too
many units, is entitled to receive more units, or has no change in their unit
entitlements, the penalty is $1000.

(6) The EPA must give a notice to the person that—
(a) refers to the amendment under section 120; and 5
(b) specifies the amount of the penalty that the person must pay under this

section; and
(c) advises that the person may request to enter into a deferred payment

arrangement under section 135A; and
(d) advises that, unless the penalty is paid in full within 20 working days 10

after the notice is given, interest on the amount of the penalty will accrue
in accordance with section 137.

134D Penalty for providing incorrect information in allocation application or
adjustment

(1) This section applies if— 15
(a) the EPA reconsiders, varies, or revokes (changes) a decision on a per-

son’s allocation application or adjustment under section 86C; and
(b) the EPA is satisfied that the change was needed because the person failed

to take reasonable care.
(2) The person must (in addition to surrendering or repaying any units as required 20

by the changed decision) pay to the EPA a penalty of an amount determined in
accordance with this section.

(3) If the effect of the change is that the person is required to surrender or repay
additional units, or is entitled to receive fewer units, the penalty is calculated as
follows: 25

a × b × c
where—
a is the lesser of the number of units the person should have surrendered,

repaid, or received (had the original decision been correct) and the num-

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ber of additional units that the person is liable to surrender or repay as a
result of the change

b is the price, in dollars, of carbon per tonne on the date the allocation
application or adjustment was due, as set by or in accordance with regu-
lations made under section 30W 5

c is the culpability factor determined under subsection (4).
(4) The culpability factor for a person is determined using this table.

Person’s level of culpability

Did person voluntarily
disclose failure or error to
EPA before being informed
of it by EPA?

Culpability
factor

Person did not take reasonable care, but
was not grossly careless and did not
knowingly fail

Yes 0.1
No 0.2

Person was grossly careless, but did not
knowingly fail

Yes 0.2
No 0.4

Person knowingly failed Yes 1.0
No 1.0

(5) If the effect of the change is that the person has surrendered or repaid too many
units, is entitled to receive more units, or has no change in their unit entitle-
ments, the penalty is $1000. 10

(6) The EPA must give a notice to the person that,—
(a) refers to the change under section 86C; and
(b) specifies the amount of the penalty that the person must pay under this

section; and
(c) advises that the person may request to enter into a deferred payment 15

arrangement under section 135A; and
(d) advises that, unless the penalty is paid in full within 20 working days

after the notice is given, interest on the amount of the penalty will accrue
in accordance with section 137.

135 Due dates for payment of penalties 20
A person must pay a penalty imposed under sections 134 to 134D within 20
working days after notice is given of the penalty, or by the date or dates agreed
under a deferred payment arrangement under section 135A.

135A Deferred payment arrangements for payments of penalties
(1) A person who is liable to pay a penalty imposed under sections 134 to 25

134D, 194EF, or 194EI may request to enter into an arrangement with the
EPA for the person to pay the penalty after its due date, either in a single pay-
ment or in instalments.

(2) The EPA must consider the request, taking into account the person’s financial
position on the date on which the request is made. 30

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(3) The EPA may—
(a) accept the request; or
(b) request further information from the person; or
(c) make a counter offer; or
(d) if subsection (5) applies, decline the request. 5

(4) If the EPA requests further information from the person or makes a counter
offer,—
(a) the person must provide the information or respond to the offer within

20 working days after the request or offer, or within a longer period
allowed by the EPA; and 10

(b) if the person provides the information or responds to the offer later than
required, the provision of the information or the response must be treated
as a new request to enter into an arrangement.

(5) The EPA may decline to enter into an arrangement with the person if the EPA
considers that— 15
(a) the person is in a position to pay all of the penalty immediately; or
(b) the person is being frivolous or vexatious; or
(c) the person has not met their obligations under a previous arrangement.

(6) The renegotiation of an arrangement is treated as if it were a new request to
enter into an arrangement. Renegotiation may be initiated— 20
(a) by the person, at any time; or
(b) by the EPA, at any time after the end of 12 months after the date on

which the arrangement was entered into.
(7) The EPA may cancel an arrangement if—

(a) it was entered into on the basis of false or misleading information provi- 25
ded by the person; or

(b) the person is not meeting their obligations under the arrangement.

136 Penalties are debt due to Crown
The amount of a penalty imposed under sections 134 to 134D, 194EF, or
194EI, together with any interest that accrues on that penalty, constitutes a 30
debt due to the Crown and is recoverable by the EPA in a court of competent
jurisdiction.

116 Section 137 amended (Interest for late payment)
(1) Replace section 137(1) with:
(1) This section applies if— 35

(a) a person is liable to pay a penalty imposed under sections 134 to
134D, 194EF, or 194EI; and

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(b) the person has not paid the penalty by the date on which the penalty was
due (as stated in the notice issued under the relevant section); and

(c) in the case of a penalty imposed under section 134, the person has not
surrendered or repaid the units to which the penalty relates.

(2) In section 137(2), delete “excess emissions”. 5
(3) Replace section 137(2)(b) with:

(b) for the period from the date by which the penalty was due to be paid
until the penalty and any interest due have been paid in full and, in the
case of a penalty imposed under section 134, the person has surren-
dered or repaid the units to which the penalty relates. 10

(4) Repeal section 137(3).
(5) In section 137(4)(a), delete “or to transfer units to a Crown holding account

under section 136”.

117 Section 138 amended (Obligation to pay penalty not suspended by appeal)
(1) Replace section 138(1) with: 15
(1) The obligation to pay and the right to receive and recover any penalty imposed

under sections 134 to 134D, 194EF, or 194EI or interest imposed under
section 137 are not suspended by any review or appeal.

(2) In section 138(2), delete “excess emissions”.

118 Section 138A replaced (Penalties to be paid into Crown account) 20
Replace section 138A with:

138A Penalties to be paid into Crown account
(1) The EPA must pay the amount of all penalties and interest on the penalties

received from a person in accordance with sections 134 to 134D, 137,
194EF, or 194EI into a Crown Bank Account. 25

(2) However, this section is subject to a court order that a penalty imposed under
section 194EF or 194EI must be applied first to pay the EPA’s actual costs
in bringing the proceedings.

119 Section 143 amended (Evidence in proceedings)
In section 143(1), replace “this Part or Part 5” with “the ETS participant provi- 30
sions” in each place.

120 Section 144 amended (Request for review of decisions)
(1) Replace section 144(1) with:
(1) A person affected by a decision of the EPA under a provision in the ETS par-

ticipant provisions who is dissatisfied with the decision may request the EPA to 35
review the decision.

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(1A) The request must be made by notice to the EPA within the following period, or
any further period that the EPA allows:
(a) within 20 working days after the person receives notice of the decision;

or
(b) for a decision of the EPA about whether to give an area of land a new or 5

changed forestry classification, within 20 working days after that deci-
sion is published in accordance with regulations made under section
196G.

(2) Replace section 144(3) with:
(3) For the purposes of a review, the EPA may— 10

(a) require the person requesting the review to supply information additional
to that contained in the request; and

(b) consider any information that the EPA already holds and that is relevant
to the review, as long as the EPA—
(i) gives a notice to the person requesting the review that describes 15

the information and invites them to comment on or object to it;
and

(ii) considers any comments or objections.
(3) After section 144(4), insert:
(4A) Before revoking or varying the forestry classification of an area of land, the 20

EPA must, in accordance with regulations made under section 196G, consult
the persons (if any) that appear likely to be substantially affected by the revoca-
tion or variation.

121 Section 148 amended (Giving of notices to EPA)
(1) Replace section 148(2) with: 25
(2) If this section applies, the notice must be given—

(a) in writing; and
(b) to the EPA at the office of the EPA; and
(c) in 1 of the following ways:

(i) by personal delivery during working hours: 30
(ii) by an electronic means of communication in accordance with Part

4 of the Contract and Commercial Law Act 2017:
(iii) by post to the post office box number for the office.

(2) If this section applies, the notice must be given in writing in 1 of the following
ways to the EPA’s office: 35
(a) by personal delivery during working hours:
(b) by an electronic means of communication in accordance with Part 4 of

the Contract and Commercial Law Act 2017:

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(c) by post to the post office box number for the office.
(2) In section 148(3), replace “subsection (2)(b)(ii)(C)” with “subsection (2)(c)

(iii)”.

122 Section 150 amended (Formation of consolidated group)
(1) Replace section 150(1) and (2) with: 5
(1) Any 2 or more members of a group may elect to form and be treated as a con-

solidated group, for the purposes of the ETS participant provisions, in respect
of any activity or activities listed in Schedule 3 or 4 other than forestry activ-
ities.

(2) A consolidated group may consist of any of the following: 10
(a) 1 or more participants:
(b) 1 or more eligible persons for an eligible industrial activity:
(c) 1 other member that is not a participant, if that entity is to act as the

nominated entity.
(2) In section 150(4)(b), replace “this Part and Part 5” with “the ETS participant 15

provisions”.
(3) In section 150(4)(c)(i), replace “this Part or Part 5 in respect of emissions and

removals resulting from” with “the ETS participant provisions in respect of
emissions and removals resulting from, or allocations, penalties, or interest
relating to,”. 20

(4) In section 150(4)(c)(ii), after “activity”, insert “, or by an allocation relating to
an eligible industrial activity,”.

(5) In section 150(6), replace “If 2 or more participants have elected under subsec-
tion (1) to form a consolidated group, those participants must be treated for the
purposes of this Part and Part 5” with “Two or more entities who make an elec- 25
tion under subsection (1) must be treated, for the purposes of the ETS par-
ticipant provisions,”.

(6) In section 150(6A), after “an activity”, insert “to which subsection (1)
applies”.

(7) In section 150(6B) and (7), after “participant”, insert “or an eligible person”. 30

123 Section 151 amended (Changes to consolidated groups)
(1) Replace section 151(1) with:
(1) If a consolidated group has been formed and still has at least 1 member, any

other person referred to in section 150(2)(a) to (c) may elect to join and be
treated as a member of the consolidated group by giving notice to the EPA in a 35
form that the EPA approves.

(2) In section 151(2)(a)(ii), delete “if the entity is a participant,”.

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(3) In section 151(2)(b)(i), replace “this Part or Part 5 in respect of emissions and
removals resulting from” with “the ETS participant provisions in respect of
emissions and removals resulting from, or allocations, penalties, or interest
relating to,”.

(4) In section 151(2)(b)(ii), delete “if the entity is a participant,”. 5
(5) In section 151(2)(b)(ii), after “activities”, insert “, or by an allocation relating

to an eligible industrial activity,”.
(6) In section 151(2)(c)(i), replace “this Part or Part 5 in respect of emissions and

removals resulting from” with “the ETS participant provisions in respect of
emissions and removals resulting from, or allocations relating to,”. 10

(7) In section 151(2)(c)(ii), after “that entity”, insert “, or by an allocation relating
to an eligible industrial activity of that entity,”.

(8) Replace section 151(4) and (5) with:
(4) Subject to subsection (6), a participant or eligible person that elects under sub-

section (1) to join a consolidated group must be treated, for the purposes of 15
the ETS participant provisions, as being a member of that consolidated group
from 1 January of the year in which they gave the notice under subsection
(1).

(5) An entity other than a participant or eligible person that elects under subsec-
tion (1) to join a consolidated group must be treated for the purposes of this 20
Part as being a member of that consolidated group from the date of receipt by
the EPA of the notice under subsection (1), or from any later date that may
be specified in the notice.

(9) In section 151(6), replace “An entity may, if the entity elects to be treated as a
member of a consolidated group on and after the date the entity is registered as 25
a participant in respect of an activity,” with “A participant in respect of an
activity may”.

124 Section 151A amended (Addition of activities to consolidated groups)
(1) In section 151A(2)(b)(i), replace “this Part or Part 5 in respect of emissions and

removals resulting from” with “the ETS participant provisions in respect of 30
emissions and removals resulting from, or allocations, penalties, or interest
relating to,”.

(2) In section 151A(2)(b)(ii), after “activities”, insert “, or by an allocation relating
to an eligible industrial activity,”.

125 Section 152 amended (Nominated entities) 35
In section 152(1), replace “this Part and Part 5” with “the ETS participant pro-
visions”.

126 Section 153 amended (Effect of being member of consolidated group)
Replace section 153(1) to (5) with:

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(1) The nominated entity of a consolidated group—
(a) must have a holding account in the name of the consolidated group for

the purposes of meeting the members’ obligations under the ETS partici-
pant provisions; and

(b) must record in that holding account the names of all the members of the 5
consolidated group; and

(c) must submit a single annual emissions return for the consolidated group
in respect of a year, which must—
(i) meet the requirements of section 65(2) in respect of the activities

listed in the notice under section 150(4)(a)(ii) or 151(2)(a)(ii) car- 10
ried out by each member of the consolidated group:

(ii) be signed by the nominated entity in accordance with section
65(2)(f) on behalf of the consolidated group; and

(d) is responsible for applying for any allocation of units under section 86
for an eligible industrial activity, in place of the eligible person who is a 15
member of the consolidated group.

(2) Each member of a consolidated group is jointly and severally liable to surren-
der or repay the amount of units assessed for the consolidated group or its
members in any year.

(3) Each member of a consolidated group is jointly entitled to be transferred, for 20
removal activities or for allocations of New Zealand units, the amount of units
assessed for the consolidated group or its members in any year.

(4) The joint and several liability, or the joint entitlement,—
(a) applies to a member only as it relates to a period when they were a mem-

ber of the consolidated group; and 25
(b) replaces the member’s sole liability or entitlement; and
(c) must be met by transferring units from, or to, the consolidated group’s

holding account.
(5) Despite this section, in calculating an allocation or provisional allocation of

New Zealand units (including a related adjustment or repayment) for an eli- 30
gible industrial activity, only the member’s liabilities and entitlements must be
used.

(5A) However, subsection (5) does not apply to any calculation of offset units
under section 86BA, which must be done in accordance with this section.

(5B) Each member of a consolidated group is jointly and severally liable to pay any 35
penalty or interest imposed on the consolidated group in relation to a period
when they were a member of the consolidated group.

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127 Section 154 repealed (Emissions returns by consolidated group in respect
of activities in Part 1 of Schedule 4)
Repeal section 154.

128 Section 155 amended (Ceasing to be member of consolidated group)
(1) In section 155(1)(c) and (d), after “participant”, insert “or eligible person”. 5
(2) Replace section 155(2)(c) with:

(c) if subsection (1)(c) applies, with effect from the date that,—
(i) in the case of a participant, their name is removed from the regis-

ter of participants under section 58 or 59; or
(ii) in the case of an eligible person, they ceased to be an eligible per- 10

son; and
(3) In section 155(5)(b), after “subsection (1)(b)”, insert “, (c)(ii),”.

129 Section 156 replaced (Effect of ceasing to be member of consolidated
group)
Replace section 156 with: 15

156 Effect of ceasing to be member of consolidated group
If an entity ceases to be a member of a consolidated group, the entity—
(a) continues to be jointly and severally liable with other members of the

consolidated group for any obligations under the ETS participant provi-
sions in respect of emissions and removals from, or allocations resulting 20
from, or allocations, penalties, or interest relating to, the activities of the
members of the consolidated group, and jointly entitled to any units
transferred for the removal activities, or for allocations relating to the
eligible industrial activities, of the consolidated group, during the period
in which the entity was a member of the consolidated group; but 25

(b) is not liable for any obligations under the ETS participant provisions in
respect of emissions and removals from, or allocations resulting from, or
allocations, penalties, or interest relating to, the activities of other mem-
bers of the group, or entitled to the benefit of any units transferred for
the removal activities, or for allocations relating to the eligible industrial 30
activities, of other members of the group, for any period during which
the entity is not a member of the consolidated group.

130 Section 156A amended (Removal of activities from consolidated groups)
(1) In section 156A(4), replace “this Part or Part 5 in respect of emissions and

removals” with “the ETS participant provisions in respect of emissions, remov- 35
als, and allocations”.

(2) In section 156A(4), after “removal activity”, insert “or an eligible industrial
activity”.

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131 Section 157 amended (Unincorporated bodies)
In section 157(2)(c)(ii)(C), after “may be,”, insert “must”.

132 Section 159 amended (Recovery of costs)
(1) In section 159(1)(a), replace “1 year of the date of a penalty notice given under

section 134 or 136” with “90 days after the date of a penalty notice given under 5
section 134”.

(2) In section 159(2)(b), replace “any other provision of this Act” with “this Act
(other than this provision)”.

(3) In section 159(3), formula, replace the definition of variable C with:

C is the price, in dollars, of carbon per tonne on the relevant date, as set by 10
or in accordance with regulations made under section 30W.

(4) In section 159(4), replace “, 134A, or 136” with “to 134D, 194EF, or 194EI”.
(5) Replace section 159(5) with:
(5) In this section—

insolvency process means receivership under the Receiverships Act 1993, 15
liquidation under the Companies Act 1993, or bankruptcy under the Insolvency
Act 2006
relevant date means the earlier of—
(a) the date that is 90 days after the date of the penalty notice; and
(b) the date on which the person enters into an insolvency process. 20

133 Section 160 amended (Review of operation of emissions trading scheme)
(1) In section 160(1), delete “established by this Act”.
(2) Replace section 160(4)(b) with:

(b) make the report of the panel publicly available; and

134 Section 161 amended (Appointment and conduct of review panel) 25
(1) Replace section 161(1)(c)(ii) with:

(ii) international climate change obligations and any other relevant
international agreement; and

(2) In section 161(1)(c)(iii), delete “established under this Act”.

135 Section 161A amended (Regulations in relation to eligible industrial 30
activities)

(1) Replace section 161A(1)(d) with:
(d) prescribing an allocation factor or factors for—

(i) electricity:
(ii) natural gas feedstock: 35

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115



(2) Replace section 161A(3) with:
(3) The Minister may recommend that regulations be made the making of regula-

tions under subsection (1)(a) that prescribe an activity as an eligible industrial
activity if the Minister is satisfied that the activity is—
(a) moderately emissions-intensive or highly emissions-intensive; and 5
(b) trade-exposed.

(3) In section 161A(4), delete “161B or”.

136 Section 161B repealed (Australian eligible industrial activities)
Repeal section 161B.

137 Section 161C amended (Other eligible industrial activities) 10
(1) In the heading to section 161C, replace “Other eligible” with “Eligible”.
(2) In section 161C(1) and (2), replace “section 161A(3)(a)” with “section

161A(3)”.

138 Section 161D amended (Power to require information for purposes of
allocation to industry) 15
In section 161D(3)(a), replace “section 161A(3)(a)” with “section 161A(3)”.

139 Section 161E amended (Requirements in respect of notice given under
section 161D)

(1) Repeal section 161E(1)(e).
(2) After section 161E(3), insert: 20
(4) However, subsection (3) does not apply if the purpose of the notice under sec-

tion 161D is to provide the Minister with the information necessary to deter-
mine whether any matter should be considered by a review under section 160.

(5) See section 3B for consultation requirements that apply to the giving of a
notice specifying a description of an activity under section 161D(1)(a). 25

140 Section 161F amended (Consultation on activities that may be prescribed
as eligible industrial activities)

(1) Repeal section 161F(1).
(2) In section 161F(3), replace “The processes for consultation under subsections

(1) and (2)” with “The process for consultation under subsection (2)”. 30

140 Section 161F repealed (Consultation on activities that may be prescribed
as eligible industrial activities)
Repeal section 161F.

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140A Section 161G amended (Regulations in relation to eligible agricultural
activities)
Replace section 161G(3) to (6) with:

(3) Before recommending the making of regulations under subsection (1)(a)(ii)
prescribing the allocative baseline or baselines of an eligible agricultural activ- 5
ity, the Minister must—
(a) have regard to the most recent New Zealand Greenhouse Gas Inventory;

and
(b) comply with the consultation requirements in sections 3A and 3B.

(4) See section 3A for consultation requirements that apply to the making of other 10
regulations under this section.

(5) For each eligible agricultural activity, the Minister—
(a) must recommend the making of regulations under this section before

surrender obligations for participants in that activity start; and
(b) must review those regulations at least once in every 5-year period; and 15
(c) must not recommend the making of regulations that would result in there

being no regulations in force under this section for the activity while sur-
render obligations for the activity exist.

(6) In conducting a review under subsection (5)(b), the Minister must comply
with subsections (3) and (4). 20

140B Section 162 amended (Regulations adding further activity to Part 2 of
Schedule 4)

(1) In the heading to section 162, replace “Regulations” with “Order in Coun-
cil”.

(2) Replace section 162(2) and (3) with: 25
(2) See sections 3A and 3B for consultation requirements that apply to the making

of an Order in Council under subsection (1).

141 Section 163 amended (Regulations relating to methodologies and verifiers)
(1) In section 163(1)(a), replace “section 62(a)” with “section 62(1)(a)”.
(2) In section 163(1)(ab), replace “an activity listed in Part 1 or 1A of Schedule 3 30

or Part 1 of Schedule 4” with “a forestry activity”.
(3) In section 163(1)(b), replace “section 62(b)” with “section 62(1)(b)”.
(4) In section 163(1)(e)(i), replace “section 62(a)” with “section 62(1)(a)”.
(4A) In section 163(5), replace “making a recommendation in relation to a regula-

tion” with “recommending the making of regulations”. 35
(5) In section 163(5), replace “New Zealand’s international obligations” with

“international climate change obligations”.

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142 Section 166 amended (Procedure for regulations relating to methodologies,
verification, unique emissions factors, and offsetting)

(1) In the heading to section 166, delete “relating to methodologies, verification,
unique emissions factors, and offsetting”.

(2) In section 166(1), replace “or 186F” with “185A, 186F, 194LA, 194TA, or 5
196G”.

(3) In section 166(4), replace “regulations made under section 163, 164, or 186F”
with “the regulations”.

(4) Repeal section 166(5).

142 Section 166 replaced (Procedure for regulations relating to methodologies, 10
verification, unique emissions factors, and offsetting)
Replace section 166 with:

166 Consultation and commencement for regulations about methodologies,
verifiers, and unique emissions factors

(1) This section applies to regulations made under— 15
(a) section 163 (methodologies and verifiers):
(b) section 164 (unique emissions factors).

(2) See sections 3A and 3B for consultation requirements that apply to the making
of the regulations.

(3) The regulations come into force 3 months after the date of their notification in 20
the Gazette, or on any later date specified in the regulations.

143 Section 167 amended (Regulations relating to fees and charges)
(1) In section 167(1), replace “this Part or Part 5” with “the ETS participant provi-

sions”.
(2) Replace section 167(2)(b) with: 25

(b) who is a participant, or who has applied to be a participant, in respect of
a removal activity, to enable the recovery of all or part of the direct and
indirect costs of the EPA in doing 1 or more of the following in relation
to the activity:
(i) publicising and informing people about the operation of the ETS 30

participant provisions:
(ii) administering the operation of the ETS participant provisions:
(iii) enforcing and monitoring compliance with the ETS participant

provisions:
(iv) doing anything else authorised or required under the ETS partici- 35

pant provisions; or

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(c) who submits an input return under section 194UA, to enable the recov-
ery of all or part of the direct and indirect costs of the EPA in doing cal-
culations and giving notice under section 194UB.

(3) Replace section 167(3)(b)(ii) with:
(ii) the administration of the ETS participant provisions in relation to 5

a removal activity; or
(iii) input returns:

144 Section 168 amended (Other regulations)
(1) In section 168(1)(j), replace “section 62(d)” with “section 62(1)(d)”.
(2) In section 168(1)(k), (l), and (o), replace “this Part and Part 5” with “the ETS 10

participant provisions”.
(3) After section 168(1)(n), insert:

(na) prescribing additional criteria for the approval of—
(i) an application to reconfigure carbon accounting areas for standard

or permanent forestry, for the purposes of section 194CB(2)(c): 15
(ii) an application to change activity on post-1989 forest land, for the

purposes of section 194DB(2)(d); and
(nb) prescribing rules for the rounding of amounts of units calculated under,

or referred to in, this Act; and
(nc) prescribing the meaning (or things that are included within the meaning) 20

of New Zealand’s best practice forest management for the purposes of
section 179A; and

(3) After section 168(2), insert:
(3) See sections 3A and 3B for consultation requirements that apply to the making

of regulations under subsection (1)(nc). 25

145 Section 169 amended (Incorporation by reference in regulations made
under section 163, 164, 167, or 168)

(1) In the heading to section 169, replace “regulations made under section 163,
164, 167, or 168” with “certain regulations”.

(2) In section 169(1), replace “section 163, 164, 167, or 168” with “a relevant 30
empowering section”.

(3) After section 169(3), insert:
(4) In this section and sections 170 to 174, relevant empowering section means

section 161A, 161G, 163, 164, 167, 168, 185A, 186F, 194EG, 194LA,
194TA, 194UC, 196G, or 197A. 35

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146 Section 170 replaced (Effect of amendments to, or replacement of, material
incorporated by reference in regulations)
Replace section 170 with:

170 Effect of amendments to, or replacement of, material incorporated by
reference in regulations 5

(1) Subsection (2) applies to an amendment to, or a replacement of, material if
the material—
(a) is incorporated by reference in regulations made under a relevant

empowering section (the original regulations); and
(b) is adopted, agreed on, made, or approved by an international government 10

agency, international organisation, or international professional body.
(2) The amendment or replacement of the material has legal effect as part of the

regulations only if regulations made under the relevant empowering section
after the original regulations were made state that the particular amendment or
replacement has that effect. 15

(3) Subsection (4) applies to an amendment to, or a replacement of, material if
the material—
(a) is incorporated by reference in regulations made under a relevant

empowering section (the original regulations); and
(b) is not material described by subsection (1)(b). 20

(4) The amendment or replacement of the material has immediate legal effect as
part of the original regulations (without the need for an amendment to the ori-
ginal regulations, or the making of other regulations, to state that effect).

147 Section 172 replaced (Effect of expiry of material incorporated by
reference) 25
Replace section 172 with:

172 Effect of expiry of material incorporated by reference
(1) This section applies to material incorporated by reference in regulations, made

under a relevant empowering section, that expires, is revoked, or ceases to have
effect without being amended or replaced. 30

(2) The material ceases to have legal effect as part of the regulations only if regula-
tions made under the relevant empowering section state that the material ceases
to have legal effect.

148 Section 173 amended (Requirement to consult)
Replace section 173(1) with: 35

(1) This section applies to regulations made under a relevant empowering section
that—

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(a) incorporate material by reference; or
(b) state, as required by section 170(2), that an amendment to, or a

replacement of, material incorporated by reference in regulations has
legal effect as part of the regulations.

149 Section 174 amended (Public access to material incorporated by reference) 5
(1) Replace section 174(1)(d)(i) with:

(i) that the material is incorporated in the regulations and—
(A) the date on which the regulations were made; or
(B) if the material has immediate legal effect under section

170(4), the date on which it had legal effect; and 10
(2) In section 174(2)(a), replace “section 163, 164, 165, 167, or 168” with “a rele-

vant empowering section”.

150 Section 175 amended (Application of Legislation Act 2012 to material
incorporated by reference)
In section 175(1), replace “or replacement” with “or a replacement”. 15

151 Section 178A amended (Option to pay money instead of surrendering units
to cover emissions)

(1) In the heading to section 178A, replace “units to cover emissions” with “,
repaying, or reimbursing units”.

(2) Replace section 178A(1) with: 20
(1) This section applies if—

(a) a person is required to surrender or repay units—
(i) as a result of submitting an emissions return; or
(ii) under section 123(3) or (6) or 183A(2)(b); or

(b) the EPA is required by this Act to reimburse units to any person. 25
(3) In section 178A(2)(a)(i), replace “section 65(4), 118(5), 183A(2)(b), 186H,

187, 189(8), 191, or 193, as applicable” with “the relevant provision”.

152 Section 178B amended (Issuing New Zealand units to meet surrender
obligations)

(1) In section 178B(3), replace “to reimburse a person units under section 123(4), 30
186H, or 189(7)(d)” with “by this Act to reimburse units to any person”.

(2) In section 178B(6), replace “section 18CA(4)” with “section 18CA(2)”.

153 Section 178C repealed (Prohibition on ability to export New Zealand
units)
Repeal section 178C. 35

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154 Part 5 divided into Parts 5 to 5D and new Part 5 divided into subparts
(1) In Part 5, replace the Part 5 heading, the subpart 1 heading, and the cross-head-

ing above section 179 with:

Part 5
Sector-specific provisions: forestry 5

Subpart 1—Deforestation
(2) Replace the cross-heading above section 180 with:

Subpart 2—Pre-1990 forest land
(3) Replace the cross-heading above section 186A with:

Subpart 3—Pre-1990 offsetting forest land 10
(4) Replace the cross-heading above section 187 with:

Subpart 4—Post-1989 forest land (standard and permanent forestry)
(5) Replace the cross-heading above section 195 with:

Subpart 7—General
(6) In Part 5, replace the subpart 2 heading with: 15

Part 5A
Sector-specific provisions: liquid fossil fuels

(7) In Part 5, replace the subpart 3 heading with:

Part 5B
Sector-specific provisions: stationary energy 20

(8) In Part 5, replace the subpart 4 heading with:

Part 5C
Sector-specific provisions: agriculture

(9) In Part 5, replace the subpart 5 heading with:

Part 5D 25
Sector-specific provisions: transitional provisions

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155 Section 179 amended (Forest land to be treated as deforested in certain
cases)

(1) Replace section 179(1)(a) with:
(a) 4 years after clearing, none of the following apply:

(i) the hectare has at least 500 stems of exotic forest species growing: 5
(ii) the hectare has been replanted with at least 100 stems of willows

or poplars in a manner consistent with managing soil erosion:
(iii) the hectare has predominantly indigenous forest species growing

in a manner in which the hectare is likely to be forest land 10
years after the hectare was cleared; or 10

(2) In section 179(1)(b)(i) and (c), replace “at least” with “more than”.

156 Section 179A amended (Forest land may not be treated as deforested in
certain cases)

(1) In section 179A(1)(b), replace “that the EPA has approved under section 186B”
with “submitted under section 186A”. 15

(2) In section 179A(1)(b), delete “if cleared”.
(3) In section 179A(1)(b)(i)(A), replace “approval is given” with “application is

submitted”.
(4) In section 179A(1)(b)(i)(B), replace “2 years after the date that the approval

was given” with “4 years after the date that the application is submitted”. 20
(5) Replace section 179A(1)(b)(ii) with:

(ii) in the case where the land is not converted to another land use and
remains forest land, in the 4-year period beginning on the date that
the pre-1990 forest land was cleared:

(6) In section 179A(1)(c)(i), replace “registration” with “the first registration of 25
any person as a participant in standard forestry or permanent forestry in respect
of the cleared land”.

(7) Replace section 179A(2) with:
(2) Subsection (1)(b) does not apply if—

(a) the EPA declines the application under section 186B; or 30
(b) after approving it, the EPA revokes its approval under section 186G(1).

(2A) If subsection (1)(c) applies (where land is cleared for forest management), see
sections 188AB, 191AB, and 191BB.

(8) After section 179A(3), insert:
(4) If regulations prescribe any meaning for New Zealand’s best practice forest 35

management, then that term has or includes that meaning in this section.

Climate Change Response (Emissions Trading Reform)
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157 Section 181 amended (When deforestation to be treated as occurring in
respect of pre-1990 forest land)

(1) Replace section 181(1) with:
(1) This section applies to any hectare of pre-1990 forest land that is being conver-

ted to land that is not forest land. 5
(1A) The hectare of forest land is to be treated as being deforested on the date of the

first action on it that is inconsistent with it remaining forest land.
(2) In section 181(2), replace “Subsection (3) applies to a landowner converting a

hectare of pre-1990 forest land that” with “However, subsection (3) applies
if the hectare of forest land”. 10

(3) Replace section 181(3) with:
(3) The hectare of forest land is to be treated as being deforested on the date of the

first action on it that—
(a) is inconsistent with the hectare remaining forest land; and
(b) happens after the date of transfer of the land or the date of the expiry or 15

termination of the forestry right, Crown forestry licence, lease, or other
agreement relating to the land.

(3A) In any case, the liability in respect of the deforestation must be calculated by
reference to the age and forest species of the trees when they were cleared,
unless section 186(2) applies. 20

158 Section 183 amended (Applications for exemption for land holdings of less
than 50 hectares of pre-1990 forest land)

(1) In section 183(1)(a), replace “allocation plan referred to in section 72” with
“pre-1990 forest land allocation plan”.

(2) Replace section 183(1)(b) with: 25
(b) was the landowner of an area of pre-1990 forest land at the date (if any),

between 1 January 2008 and the date of issue of the pre-1990 forest land
allocation plan, on which the area was converted to land that is not forest
land.

(3) In section 183(2)(c), replace “an allocation plan under section 72” with “the 30
pre-1990 forest land allocation plan”.

(4) In section 183(7), after “this section”, insert “and section 183B”.

159 Section 183A amended (Certain applications not otherwise permitted by
section 183)

(1) In section 183A(1)(b) and (3), replace “an allocation plan under section 72” 35
with “the pre-1990 forest land allocation plan”.

(2) In section 183A(5)(b), replace “the allocation plan” with “the pre-1990 forest
land allocation plan”.

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160 New section 183B inserted (Applications for exemption for some Maori
land or land with 10 or more owners)
After section 183A, insert:

183B Applications for exemption for some Maori land or land with 10 or more
owners 5

(1) This section applies to an area of pre-1990 forest land that—
(a) is less than 50 hectares; and
(b) on 1 September 2007,—

(i) was all of the pre-1990 forest land held in a document that is
equivalent to a record of title under the Land Transfer Act 2017 10
or, if there was no such document, in another instrument of title;
and

(ii) was Maori land or was owned by more than 10 persons; and
(c) was an area of pre-1990 forest land on the following date (the qualifying

date): 15
(i) the date of issue of the pre-1990 forest land allocation plan; or
(ii) the date (if any), between 1 January 2008 and the date of issue of

the pre-1990 forest land allocation plan, on which the area was
converted to land that is not forest land; and

(d) after the qualifying date,— 20
(i) became owned by the trustees of a trust; or
(ii) in the case of Maori freehold land, had an agent appointed for it

under Te Ture Whenua Maori Act 1993 with the power to apply
under this section; and

(e) has not been the subject of an allocation of units to a landowner under 25
the pre-1990 forest land allocation plan.

(2) The trustees or agent described in subsection (1)(d) may apply to the EPA
for the area of pre-1990 forest land to be declared exempt land.

(3) The application—
(a) may be submitted to the EPA at any time; and 30
(b) must be in the prescribed form and accompanied by the prescribed fee (if

any); and
(c) must contain details of the area of pre-1990 forest land to which the

application relates; and
(d) must be accompanied by evidence showing that the land is pre-1990 for- 35

est land; and
(e) must be accompanied by a statutory declaration from the applicant stat-

ing that the area of pre-1990 forest land was, on 1 September 2007, all of

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125



the pre-1990 forest land held in a document that is equivalent to a record
of title under the Land Transfer Act 2017 or, if there was no such docu-
ment, in another instrument of title; and

(f) must be signed by the applicant; and
(g) must be accompanied by any other prescribed information. 5

(4) If the EPA is satisfied that the applicant is trustees or an agent described in
subsection (1)(d), that the land is pre-1990 forest land, and that each of the
criteria specified in subsection (1)(a) to (e) is met, the EPA must—
(a) declare the land to be exempt land; and
(b) notify the applicant that the land has been declared exempt land. 10

161 Section 184 amended (Exemptions for deforestation of land with tree
weeds)

(1) Replace section 184(1) to (4) with:
(1) An application may be made under this section for pre-1990 forest land to be

declared exempt land (in relation to deforestation) if a prescribed type of tree 15
weed—
(a) is growing on the land; or
(b) was cleared from the land as part of the deforestation process on or after

1 January 2008.
(2) The application may be made by— 20

(a) the landowner of the pre-1990 forest land; or
(b) a third party to whom section 180 applies.

(2) In section 184(5), replace “every application received under subsection (4)
against the criteria, and priorities in, and the number of whole tonnes of emis-
sions that are to be covered by exemptions granted in respect of, the relevant 25
notice given under subsection (1)” with “the application against the prescribed
criteria and priorities”.

(3) Replace section 184(5)(b) with:
(b) must, if the EPA declares any land to be exempt land, notify the appli-

cant of— 30
(i) the declaration; and
(ii) any requirements or conditions that the EPA has decided to

impose on the person whose land is exempted.
(4) Replace section 184(6) and (7) with:
(6) The EPA— 35

(a) may declare that a person’s land ceases to be exempt land (under this
section) if the person breaches any requirement or condition that the
EPA imposed on them for the exempt land; and

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(b) if it does so, must notify the person of the declaration.
(4) Replace section 184(6)(b) with:

(b) completed by the end of the mandatory emissions return period in which
the exemption was granted.

162 New section 185A inserted (Regulations about exemptions for 5
deforestation of land with tree weeds)
After section 185, insert:

185A Regulations about exemptions for deforestation of land with tree weeds
The Governor-General may, by Order in Council made on the recommendation
of the Minister, make regulations for 1 or more of the following purposes in 10
relation to exemptions under section 184:
(a) prescribing the types of tree weed for which an application may be made

for pre-1990 forest land to be declared exempt land:
(b) defining those types of tree weed based on any matter, such as the fol-

lowing: 15
(i) the species of tree weed:
(ii) the geographical location of the tree weed:
(iii) whether a weed control programme applies to the tree weed:

(c) prescribing processes for making applications to the EPA for an exemp-
tion, including fees for applications: 20

(d) prescribing the information required in an application, including—
(i) information to properly describe or define the land:
(ii) evidence about the land and the forest species on the land:

(e) prescribing the criteria and priorities that the EPA must consider in
deciding whether to grant an exemption: 25

(f) prescribing any requirements or conditions that the EPA may impose on
a person whose land is exempted, including for weed control on the
land:

(g) specifying that 1 or more of the following is different for different types
of tree weed: 30
(i) the process for making the application:
(ii) the information required in the application:
(iii) the criteria and priorities that the EPA must consider:
(iv) any requirements or conditions that the EPA may impose on a per-

son whose land is exempted: 35

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(h) providing for any other matters contemplated by sections 184 and 185,
necessary for their administration, or necessary for giving them full
effect.

163 Section 186 amended (Methodology for pre-1990 forest land cleared in 8
years or less) 5
In section 186(2)(a), replace “sections 62(b)” with “section 62(1)(b)”.

164 Section 186B amended (Criteria for approving offsetting forest land
applications)

(1) After section 186B(1)(a)(ii)(E), insert:
(F) offsetting forest land under an approved offsetting forest 10

land application that was removed as offsetting forest land
under section 186CA within the period prescribed in
regulations made under section 186F; or

(G) excess forest land that ceased to be approved swap land
under section 194JF(2)(e) within the period prescribed in 15
regulations made under section 186F; or

(H) land of a kind described in sub-subparagraphs (A) to (E)
that became post-1989 forest land within the 2 years before
the offsetting forest land application is submitted; and

(2) After section 186B(1)(a), insert: 20
(aa) if any of the proposed offsetting forest land is land that is in a carbon

accounting area, all of the land in the carbon accounting area is in part of
the proposed offsetting forest land; and

(3) In section 186B(1)(c)(ii), after “become”, insert “or remain”.
(4) After section 186B(2), insert: 25
(3) If the EPA approves offsetting forest land that includes any land in a carbon

accounting area,—
(a) the participant for that carbon accounting area—

(i) is liable to surrender the number of New Zealand units equal to
the unit balance of that carbon accounting area; and 30

(ii) ceases to be a participant in the relevant activity on that carbon
accounting area; and

(b) the EPA must amend the register kept under section 57, and the records
of carbon accounting areas kept under section 188(2), to record the
effects of this subsection. 35

(4) If the EPA declines an application, the provisions of this Act apply to the rele-
vant pre-1990 forest land as if the relevant offsetting forest application had not
been made (and therefore as if section 179A(1)(b) had not applied to it).

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165 Section 186C amended (Conditions applicable to offsetting forest land)
In section 186C(1)(a)(i), after “become”, insert “or remain”.

166 New section 186CA inserted (Variation to approved offsetting forest land
application)
After section 186C, insert: 5

186CA Variation to approved offsetting forest land application
(1) The person who owns the pre-1990 forest land that is subject to an approved

offsetting forest land application (the approved offset) may apply to the EPA
to vary the approved offset only once before submitting a declaration under
section 186D. 10

(2) The application to vary—
(a) must propose to reduce the offsetting forest land; and
(b) may also propose to reduce the pre-1990 forest land that is to be offset

by that land.
(3) The EPA must approve the variation if— 15

(a) the application to vary—
(i) is in the prescribed form, and accompanied by the payment of any

prescribed fee; and
(ii) complies with any relevant regulations made under section 186F;

and 20
(iii) is accompanied by any other relevant information that the EPA

may require; and
(b) the EPA is satisfied that the offsetting forest land (as reduced) is likely

to—
(i) achieve carbon equivalence with the pre-1990 forest land (as 25

reduced, if applicable) that is to be offset by that land within the
usual rotation period for forest species of the pre-1990 forest land;
and

(ii) become or remain forest land before the pre-1990 forest land (as
reduced, if applicable) that is to be offset by that land is defores- 30
ted; and

(c) any other requirements with respect to offsetting specified in this Act or
regulations made under this Act are satisfied.

(4) The EPA may decline a variation that does not meet all or any of the require-
ments specified in subsection (3). 35

(5) If the EPA approves the variation, the provisions of this Act apply—
(a) to the approved offset as if it had originally been approved as varied; and

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(b) to any pre-1990 forest land that was removed in the reduction, as if the
offsetting forest application had not been made in relation to that land
(and therefore as if section 179A(1)(b) had not applied to it).

167 Section 186D amended (Requirements relating to offsetting forest land)
(1) In section 186D(1), (2), and (3), after “has become”, insert “or remained”. 5
(2) After section 186(3), insert:
(3A) If a person has submitted a declaration under subsection (1), before the EPA

decides whether it is satisfied for the purposes of subsection (2) or (3), it may
give notice to the owner giving them the option to vary the application under
section 186CA if— 10
(a) some but not all of the offsetting forest land has become or remained for-

est land; and
(b) the person has not previously varied their approved offsetting forest land

application under section 186CA.
(3B) A person given a notice under subsection (3A)— 15

(a) may apply to vary the application under section 186CA (even though
they have submitted their declaration), subject to any conditions speci-
fied by the EPA in the notice; and

(b) if they do so and the variation is approved, may submit a revised declar-
ation under subsection (1). 20

168 Section 186F amended (Regulations relating to offsetting)
(1) After section 186F(c), insert:

(ca) prescribing time periods for re-using removed offsetting forest land or
excess forest land:

(2) In section 186F(d), replace “sections 186B and 186C” with “sections 186A to 25
186J”.

168 Section 186F amended (Regulations relating to offsetting)
In section 186F, insert as subsections (2) and (3):

(2) See sections 3A and 3B for consultation requirements that apply to the making
of the regulations. 30

(3) The regulations come into force 3 months after the date of their notification in
the Gazette, or on any later date specified in the regulations.

169 Section 186H amended (Treatment of allocations in respect of pre-1990
forest land that is offset)

(1) In section 186H(1)(b) and (5), replace “an allocation plan” with “the pre-1990 35
forest land allocation plan”.

(2) Replace section 186H(6) with:

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(6) For the purposes of subsection (2), second tranche, in relation to an allocation,
means the New Zealand units that are allocated to a person under the pre-1990
forest land allocation plan on or after 1 January 2013.

170 Section 186J amended (Methodology for pre-1990 offsetting forest land
cleared after usual rotation period is completed) 5
In section 186J(2)(a), replace “sections 62(b)” with “sections 62(1)(b)”.

171 New section 186K inserted (Standard and permanent forestry on
post-1989 forest land)
Before section 187, insert:

186K Standard and permanent forestry on post-1989 forest land 10
(1) In this subpart,—

final forestry emissions return means an emissions return that is prepared
under section 189BA and is not a provisional forestry emissions return
permanent forestry means an activity listed in Part 1A of Schedule 4
provisional forestry emissions return means an emissions return submitted 15
under section 189AA
standard forestry means an activity listed in Part 1 of Schedule 4.

(2) To avoid doubt, standard forestry and permanent forestry comprise the same
list of activities carried out in respect of post-1989 forest land, but the differ-
ence is that the relevant Part of Schedule 4 has been chosen to apply to the 20
land.

172 Section 187 amended (Conditions on registration as participant in respect
of certain activities relating to post-1989 forest land)

(1) In the heading to section 187, replace “respect of certain activities relating to
post-1989 forest land” with “certain activities of standard or permanent 25
forestry in respect of post-1989 forest land”.

(2) In section 187(1), replace “listed in Part 1 of Schedule 4” with “of standard for-
estry or permanent forestry”.

(3) In section 187(2), replace “carrying out an activity listed in Part 1 of Schedule
4 in relation to exempt land that has been deforested” with “an activity of 30
standard forestry or permanent forestry in relation to exempt land that has been
deforested 8 or less years ago”.

(4) In section 187(2)(b), replace “20 working days of submission of the emissions
return under paragraph (a)” with “60 working days after the EPA gives the per-
son a notice requiring the surrender”. 35

(5) Replace section 187(3) with:
(3) To avoid doubt, if any person is registered as a participant carrying out an

activity of standard forestry or permanent forestry in respect of any post-1989

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forest land, no person (including that person) can be registered as a participant
carrying out a different activity of standard forestry or permanent forestry in
respect of that land.

(6) In section 187(4), replace “carrying out an activity listed in Part 1 of Schedule
4 in respect of” with “an activity of standard forestry or permanent forestry in 5
relation to”.

(7) In section 187(5), replace “carrying out an activity listed in Part 1 of Schedule
4” with “an activity of standard forestry or permanent forestry”.

172 Section 187 amended (Conditions on registration as participant in respect
of certain activities relating to post-1989 forest land) 10

(1) In section 187(2), after “been deforested”, insert “8 or less years ago”.
(2) Replace section 187(2)(b) with:

(b) has surrendered, within 60 working days after the EPA gives the person
a notice requiring the surrender, the number of units listed in the assess-
ment under paragraph (a)(ii); and 15

(3) In section 187(6), replace “the commencement of this section” with “1 January
2013”.

173 Section 188 amended (Registration as participant in respect of post-1989
forest land)

(1) In the heading to section 188, replace “in respect of post-1989 forest land” 20
with “in standard or permanent forestry”.

(2) In section 188(1), replace “listed in Part 1 of Schedule 4” with “of standard for-
estry or permanent forestry”.

(3) Replace section 188(2) and (3) with:
(2) The EPA must keep the following records for the activity of standard forestry 25

or permanent forestry for which a person is a participant (whether by registra-
tion under section 57 or otherwise):
(a) the carbon accounting area or areas in respect of which the person is a

participant; and
(b) for each carbon accounting area used for an activity of standard forestry, 30

whether or not it is a carbon accounting area (averaging); and
(c) the unit balance of each carbon accounting area in respect of which the

person is a participant, as calculated under the last emissions return sub-
mitted for the area.

(3) A person who is a participant in standard forestry or permanent forestry 35
(whether by registration under section 57 or otherwise) may apply to the EPA
to add any carbon accounting area or areas to the post-1989 forest land in
respect of which the person is recorded as a participant.

(4) Replace section 188(5) to (10) with:

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(5) The EPA may (under this section) add a carbon accounting area to the
post-1989 forest land in respect of which a person is recorded as a participant
only if—
(a) the EPA is satisfied that the person would (if appropriate) qualify to be

registered as a participant in respect of that land under section 187; and 5
(b) where the forest species on that land is predominantly naturally regener-

ated tree weeds, the EPA is satisfied that the risk of tree weed spread
from the land is low.

(6) If the EPA—
(a) registers a person as a participant under section 57 in relation to an activ- 10

ity of standard forestry or permanent forestry, the EPA must notify the
person under section 57(6); or

(b) receives an application to add a carbon accounting area and subsection
(5) is satisfied, the EPA must—
(i) update the participant’s record to reflect the addition of the carbon 15

accounting area; and
(ii) notify the participant accordingly.

(7) The addition of a carbon accounting area under subsection (6)(b)(i) has
effect on and after the date of the notice given under subsection (6)(b)(ii).

(8) See also sections 188AC and 188AD (which require notice to the partici- 20
pant and notice to interested parties, if any).

173 Section 188 amended (Registration as participant in respect of post-1989
forest land)

(1) In section 188(6)(a), replace “under section 57(6)(b),—” with “the person in
accordance with section 57(6); or”. 25

(2) Repeal section 188(6)(a)(i) and (ii), and (b)(i).
(3) Repeal section 188(7)(a)(i).
(4) In section 188(7)(a)(ii)(A), replace “section 58(3)(c)” with “section 58(3)(b)”.
(5) Repeal section 188(7)(b)(i).
(6) In section 188(7A), replace “subsection (7)(b)(i) to (iii)” with “subsection 30

(7)(b)(ii) and (iii)”.
(7) After section 188(10), insert:
(11) See also sections 188AC and 188AD (which require notice to the partici-

pant and notice to interested parties, if any).

174 Sections 188A to 191 replacedNew sections 188AC and 188AD inserted 35
Replace sections 188A to 191 with:After section 188A, insert:

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188AA Removing registration as participant in standard or permanent forestry
(1) This section sets out some situations in which section 191AA or 191BA

applies (which relate to ceasing participation for whole or part carbon account-
ing areas).

(2) Section 191AA applies if the EPA— 5
(a) receives an application under section 58 for the removal of a person’s

name from the register as a participant in standard forestry; or
(b) is satisfied under section 59(2) that the person has ceased to carry out

standard forestry or permanent forestry.
(3) Section 191AA applies if the EPA decides to remove the name of a person 10

from the register in respect of an activity of standard forestry under section
59A (for persistent non-compliance), or in respect of an activity of standard
forestry or permanent forestry under section 59B (because the person never
carried out the activity).

(4) A person who is a participant in standard forestry or permanent forestry— 15
(a) may apply to the EPA to—

(i) remove any carbon accounting area or areas from the post-1989
forest land in respect of which the person is recorded as a partici-
pant; or

(ii) remove post-1989 forest land from any carbon accounting area or 20
areas in respect of which the person is recorded as a participant;
and

(b) must, as soon as practicable, notify the EPA if the person ceases to carry
out the activity in respect of—
(i) a carbon accounting area in respect of which the person is recor- 25

ded as a participant; or
(ii) any land in a carbon accounting area in respect of which the per-

son is recorded as a participant.
(5) An application or a notice under subsection (4) must be—

(a) in the prescribed form; and 30
(b) accompanied by any prescribed fee and any prescribed information.

(6) Section 191AA applies if the EPA—
(a) receives and approves an application to remove a carbon accounting area

for which a person is recorded as a participant; or
(b) receives a notice that a person has ceased to carry out an activity on all 35

of a carbon accounting area; or
(c) is satisfied that a person has ceased to carry out standard forestry or per-

manent forestry on all of a carbon accounting area.
(7) Section 191BA applies if the EPA—

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(a) receives and approves an application to remove land from a carbon
accounting area for which a person is recorded as a participant; or

(b) receives a notice that a person has ceased to carry out an activity on part
of a carbon accounting area; or

(c) is satisfied that a person has ceased to carry out standard forestry or per- 5
manent forestry on part of a carbon accounting area.

(8) This section is subject to section 194EB (which restricts the removal of land
relating to permanent forestry).

188AB Removing registration as participant in standard or permanent forestry
in certain natural events or clearance for forest management 10

(1) A person who is a participant in standard forestry or permanent forestry may,
as soon as practicable, notify the EPA if all of part of the post-1989 forest land
on which the person carries out the activity—
(a) is affected by a natural event that permanently prevents re-establishing a

forest on that land; or 15
(b) is cleared land to which section 179A(1)(c) applies (which is land

cleared for best practice forest management that may not be treated as
deforested).

(2) The notice must—
(a) include the prescribed information (if any); and 20
(b) be signed by the person; and
(c) be given—

(i) in the prescribed manner and format; and
(ii) together with the prescribed fee (if any); and
(iii) together with the prescribed information (if any). 25

(3) If the EPA is satisfied that the post-1989 forest land is land to which subsec-
tion (1)(a) or (b) applies, then whichever of section 191AA or 191BA is
relevant applies (so that the person is not liable to surrender units equal to the
unit balance of the affected land).

188AC Notice to forestry participant if their registration added or removed 30
The EPA must give written or electronic notice to a participant, or former par-
ticipant, of the following matters, as soon as practicable after the EPA carries
them out under any of Parts 5 to 5D:
(a) the participant’s registration or removal from registration in respect of an

activity, and the date on which this took or takes effect: 35
(b) the addition or removal of any area or land for which the participant is

registered, and the date on which this took or takes effect.

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188AD Notice to interested party if forestry participant’s registration added or
removed

(1) A participant must notify the interested party (if any) of the following matters
under this section, in writing or electronically, as soon as practicable after
receiving the EPA’s notice about, or becoming aware of, the matter: 5
(a) the participant’s registration, or removal from registration, in respect of

an activity, and the date that this took or takes effect:
(b) the addition or removal of any area or land for which the participant is

registered, and the date that this took or takes effect.
(2) The EPA must provide the participant with any address that it has recorded for 10

the interested party.
(3) In this section, interested party means—

(a) the landowner, in relation to a participant who is registered for an activ-
ity relating to—
(i) holding a registered forestry right or registered lease over land; or 15
(ii) being a party to a Crown conservation contract over land; or

(b) any person with a registered forestry right or registered lease in respect
of the land, in relation to a participant who is registered for an activity
relating to owning post-1989 forest land.

Provisional and final forestry emissions returns 20

189AA Provisional forestry emissions return in any year
(1) This section applies to a person who is a participant in an activity of standard

forestry or permanent forestry.
(2) The person may, once before 1 July in each year, submit a provisional forestry

emissions return prepared under section 189BA for the activity— 25
(a) that covers 1 or more of the carbon accounting areas for which the per-

son is a participant in the activity (each a CAA1); and
(b) that uses the last day of the previous calendar year as the relevant date.

189AB Final forestry emissions return at end of mandatory emissions return
period 30

(1) This section applies to a person who is a participant in an activity of standard
forestry or permanent forestry on the last day of a mandatory emissions return
period.

(2) The person must submit a final forestry emissions return prepared under sec-
tion 189BA for the activity— 35
(a) that covers each carbon accounting area for which the person was a par-

ticipant in the activity on the last day of the mandatory emissions return
period (each a CAA1); and

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(b) that uses the last day of the mandatory emissions return period as the
relevant date.

(3) The deadline for submitting the emissions return is 6 months after the end of
the mandatory emissions return period.

(4) However, subsection (2) does not apply in relation to a carbon accounting 5
area in relation to which a participant is not entitled to receive units under—
(a) section 194FC(2), relating to carbon accounting areas (averaging); or
(b) section 194PC(3), relating to temporary adverse event land.

189BA Preparing provisional or final forestry emissions return
(1) An emissions return prepared under this section must— 10

(a) specify the CAA1s that the emissions return covers; and
(b) specify the activity for which the person was a participant on the

CAA1s; and
(c) for each CAA1,—

(i) specify the emissions return period that applies, by using subsec- 15
tion (4) and the relevant date from the provision that requires the
return; and

(ii) specify the emissions and removals during the emissions return
period; and

(iii) set out the calculation under section 189CA of the person’s 20
gross liability or entitlement for emissions and removals during
the emissions return period; and

(iv) specify the person’s net liability or entitlement for emissions and
removals during the emissions return period by,—
(A) for a provisional forestry emissions return, specifying the 25

same value as the person’s gross liability or entitlement; or
(B) for a final forestry emissions return, setting out the calcula-

tion of that value under section 189CB (which takes into
account the liability or entitlement under each provisional
forestry emissions return for an overlapping period, if any); 30
and

(v) set out the calculation under section 189CC of the unit balance;
and

(d) set out the calculation under section 189CD of the person’s total liabil-
ity or entitlement for all the CAA1s. 35

(2) The emissions return must—
(a) include the prescribed information (if any); and
(b) be signed by the participant; and

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(c) when submitted under the relevant provision, be submitted—
(i) in the prescribed manner and format; and
(ii) together with the prescribed fee (if any); and
(iii) together with the prescribed information (if any).

(3) See section 62(1)(b) and (c) for the requirements to calculate (and poten- 5
tially verify) emissions and removals.

(4) In this section, emissions return period, for a CAA1, means the period that—
(a) starts on the latest of the following:

(i) the first day of the mandatory emissions return period in which
the relevant date falls: 10

(ii) if the CAA1 was constituted by registration under section 188, the
date on or before registration on which any of the land in the
CAA1 became post-1989 forest land:

(iii) if the CAA1 was constituted in another way, the constitution date
of the CAA1: 15

(iv) the day after the last day of the emissions return period for the
CAA1 under,—
(A) for a provisional forestry emissions return, the last provi-

sional or final forestry emissions return submitted for the
CAA1; and 20

(B) for a final forestry emissions return, the last final forestry
emissions return submitted for the CAA1; and

(b) ends on the relevant date.
(5) If subsection (4)(a)(ii) applies, the person must be treated as if they became

a participant in respect of the CAA1 on the date under that subparagraph 25
(before the CAA1 was actually constituted) for the purposes of calculating—
(a) emissions and removals from the CAA1; and
(b) the unit balance of the CAA1.

Calculations for provisional and final forestry emissions returns

189CA Gross liability or entitlement for each CAA1 in emissions return 30
(1) A person’s gross liability or entitlement for a CAA1 over an emissions return

period (g) is calculated as follows:
g = r − e

where—
r is the number of units required for removals from the CAA1 during the 35

emissions return period

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e is the number of units required for emissions from the CAA1 during the
emissions return period.

Recalculation based on unit balance (section 190)
(2) However, if—

(a) the g calculated under subsection (1) is a negative number, giving a 5
gross liability; and

(b) that gross liability is greater than the CAA1’s previous unit balance
(meaning p in the calculation under section 189CC),—

then g is recalculated as the negative of the previous unit balance.

189CB Net liability or entitlement for each CAA1 in final forestry emissions 10
return

(1) A person’s net liability or entitlement for a CAA1 over an emissions return
period (h) is calculated as follows:

h = g − gn
where— 15
g is the person’s gross liability or entitlement for the CAA1 (under that

same final forestry emissions return)
gn is the sum of the person’s gross liability or entitlement for the CAA1

under each overlapping provisional forestry emissions return (if any).
(2) To avoid doubt, if there is no overlapping provisional forestry emissions return, 20

a person’s net liability or entitlement is the same as their gross liability or
entitlement for a CAA1.

(3) However, if section 194DC applies, the person’s net liability or entitlement
(hr) is recalculated as follows:

hr = ha − s 25
where—
ha is the person’s net liability or entitlement calculated under subsection

(1)

s is the number of units the person is liable to surrender under section
194DC. 30

Definition
(4) In this section, overlapping provisional forestry emissions return means

each provisional forestry emissions return (if any) submitted for a period that
overlaps with the emissions return period of the final forestry emissions return.

189CC Unit balance calculation for each CAA1 in emissions return 35
The unit balance of a CAA1 (u) is calculated for an emissions return as fol-
lows:

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u = p + h
where—
p is—

(a) the previous unit balance of the CAA1 calculated under the last
emissions return submitted for the CAA1; or 5

(b) zero, if there is no such return
h is the person’s net liability or entitlement for the CAA1 under the emis-

sions return for which u is calculated.

189CD Total liability or entitlement for all CAA1s in emissions return
A person’s total liability or entitlement for all the CAA1s covered by an 10
emissions return (t) is calculated as follows:

t = hn
where—
hn is the sum of the person’s net liability or entitlement for each CAA1.

Total liability or entitlement and unit balance has effect for all emissions 15
returns

189DA Total liability or entitlement has effect, and unit balance updated, when
emissions return submitted

(1) This section applies when a person submits a provisional or final forestry emis-
sions return. 20

(2) If the person’s total liability or entitlement for the CAA1s covered by the emis-
sions return is—
(a) a positive number, the person is entitled to receive (or be reimbursed)

that number of New Zealand units; or
(b) a negative number, the person is liable to surrender (or repay) that num- 25

ber of New Zealand units.
(3) For a final forestry emissions return, the person—

(a) is entitled to be reimbursed (instead of to receive) units; or
(b) is liable to repay (instead of to surrender) units—
to the extent that they surrendered, or received, more units for a CAA1 under 30
provisional forestry emissions returns than required to satisfy their net liability
or entitlement for the CAA1 under the final forestry emissions return.

(4) The unit balance of each CAA1 covered by the emissions return is updated to
the unit balance calculated under the return.

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New unit balance report for certain applications or notices

189EA New unit balance report
(1) A new unit balance report prepared under this section must—

(a) specify the CAA2s that the report covers and, for each CAA2 whose
boundaries are not the same as a CAA1, define the CAA2; and 5

(b) specify the CAA1s (that are replaced by the CAA2s); and
(c) set out the calculation under this section of the opening unit balance of

each CAA2; and
(d) if any CAA1 forms a notional CAA2 and a remainder CAA2 (because

participation ceases for part of the CAA1 under section 191BA), set 10
out the calculation under this section of the person’s final liability or
entitlement.

(2) However, subsection (1) is subject to the following provisions (which limit
reconfiguration):
(a) section 194FC(5) (carbon accounting areas (averaging)): 15
(b) section 194HD (approved swap land):
(c) section 194PE (temporary adverse event land).
Opening unit balance if CAA2 has same boundaries as CAA1

(3) If a CAA2 has the same boundaries as a CAA1, the opening unit balance of
the CAA2 (v) is calculated as follows: 20

v = u
where—
u is the unit balance of the CAA1 (under the emissions return for the

CAA1 that includes the report).
Opening unit balance if CAA2 formed from land in 1 or more CAA1s 25

(4) If a CAA2 is formed from land in 1 or more CAA1s, the opening unit balance
of the CAA2 (v) is calculated by summing the result of the following calcula-
tion for each CAA1 that overlaps with the CAA2 (because any land in the
CAA1 becomes land in the CAA2):

un × (an ÷ bn) 30
where—
un is the unit balance of the overlapping CAA1 (under the emissions return

for the CAA1 that includes the report)
an is the area of overlap between the CAA2 and the overlapping CAA1 (in

hectares) 35
bn is the area of the overlapping CAA1 (in hectares).

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141



Opening unit balance if CAA2s include different land
(5) If any of the land in the CAA2s that are replacing a CAA1 is land that was not

in the CAA1, the opening unit balance of the any of the CAA2s (v) that are
replacing the CAA1 is calculated as follows:

v = u × (a ÷ b) 5
where—
u is the unit balance for the CAA1 in the emissions return
a is the area of that CAA2 (in hectares)
b is the total area of all of the CAA2s for the CAA1 (in hectares).
Final liability or entitlement if CAA1 forms notional CAA2 and remainder 10
CAA2

(6) A person’s final liability or entitlement (f) is calculated as follows:
f = t − un

where—
t is the person’s total liability or entitlement for the CAA1s (under the 15

emissions return for the CAA1s that includes the report)
un is the sum of the opening unit balance of each notional CAA2 formed

from a CAA1.

Maximum liability is unit balance of carbon accounting area

190 Maximum liability is unit balance of carbon accounting area 20
Despite section 63, a person who is or was a participant in respect of an activity
of standard forestry or permanent forestry is not liable to surrender more units
in relation to any carbon accounting area or part of a carbon accounting area
than the unit balance of that carbon accounting area or part of a carbon
accounting area. 25

Ceasing participation in standard or permanent forestry

191AA Ceasing participation for whole carbon accounting areas
(1) This section applies if a person ceases, or is to cease, participation in an activ-

ity of standard forestry or permanent forestry (on the end date) on 1 or more
whole carbon accounting areas (each a CAA1). 30

(2) However, this section does not apply if another provision of this Act requires
an emissions return to be prepared for the situation.

(3) To avoid doubt, this section applies whether—
(a) the person is ceasing to be a participant in the activity on a CAA1, or is

removing a CAA1 for which the person is recorded as a participant; or 35

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(b) the person is giving notice to the EPA, the EPA has approved an applica-
tion from the person, or the EPA is acting under a provision of this Act;
or

(c) the CAA1s are some or all of the carbon accounting areas on which the
person participates in the activity. 5

191AB Effect of ceasing participation for whole carbon accounting areas
(1) If section 191AA applies, then, starting on the end date,—

(a) the person ceases to be a participant in the activity on the CAA1s; and
(b) the person is liable to surrender the number of New Zealand units equal

to the unit balance of each CAA1 (calculated under the last emissions 10
return submitted for the CAA1).

(2) However, subsection (1)(b) does not apply if the person has ceased to be a
participant because of section 188AB (for a natural event that permanently
prevents re-establishing a forest or land cleared for best practice forest manage-
ment). 15

(3) The EPA must amend the register kept under section 57, and the records of car-
bon accounting areas kept under section 188(2), to record the effects of this
section.

(4) See sections 188AC and 188AD, which require notice to the participant and
notice to interested parties, if any. 20

191BA Ceasing participation for part carbon accounting areas
(1) This section applies if a person ceases, or is to cease, participation in an activ-

ity of standard forestry or permanent forestry (on the end date) on only part of
1 or more carbon accounting areas (each a CAA1).

(2) To avoid doubt, this section applies whether— 25
(a) the person ceases to be a participant in the activity on part of a CAA1, or

is removed from being recorded as a participant in respect of part of a
CAA1; or

(b) the person is giving notice to the EPA, the EPA has approved an applica-
tion from the person, or the EPA is acting under a provision of this Act. 30

(3) However, this section does not apply to a situation for which another provision
of this Act already requires an emissions return to be prepared.

(4) The person must—
(a) prepare a final forestry emissions return under section 189BA for the

activity— 35
(i) that covers each CAA1; and
(ii) that uses the end date as the relevant date; and

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143



(b) include in that return a new unit balance report under section 189EA
for the activity that covers the following carbon accounting areas (each a
CAA2) formed from each CAA1:
(i) a notional CAA2 for the part of the CAA1 where participation

ceases: 5
(ii) a remainder CAA2 for the rest of the land in the CAA1.

(5) The person must—
(a) include the emissions return with the application or notice when it is

made or given; or
(b) if there is no application or notice, provide the emissions return when 10

required by the EPA.
(6) The land in a notional CAA2 must be treated as forest land if the person has

ceased to be a participant because of section 188AB (for a natural event that
permanently prevents re-establishing a forest or land cleared for best practice
forest management). 15

191BB Effect of ceasing participation for part carbon accounting areas
(1) This section applies if a final forestry emissions return (for the CAA1s) is pro-

vided to the EPA in accordance with section 191BA, including a new unit
balance report (for the CAA2s).

(2) Starting on the end date,— 20
(a) the emissions return is treated as being submitted (so that the total liabil-

ity or entitlement has effect, and the unit balance is updated, for the
CAA1s under section 189DA); and

(b) the person ceases to be a participant in the activity on the notional
CAA2s; and 25

(c) the person is liable to surrender the number of New Zealand units equal
to the opening unit balance calculated for each notional CAA2 in the
new unit balance report; and

(d) the person is a participant in the activity on the remainder CAA2s
(instead of the CAA1s); and 30

(e) the unit balance of each remainder CAA2 is the opening unit balance
calculated for it in the new unit balance report; but

(f) any entitlement to receive units because of paragraph (a) is offset
against any liability to surrender units under paragraph (c), so that the
person’s final liability or entitlement is as calculated in the new unit bal- 35
ance report (as long as only New Zealand units are surrendered for the
liability in paragraph (c)).

(3) However, subsection (2)(c) and (f) does not apply if the person has ceased
to be a participant because of section 188AB (for a natural event that per-

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manently prevents re-establishing a forest or land cleared for best practice for-
est management).

(4) The EPA must amend the register kept under section 57, and the records of car-
bon accounting areas kept under section 188(2), to record the effects of this
section. 5

(5) See sections 188AC and 188AD, which require notice to the participant and
notice to interested parties, if any.

191CA If participant has never carried out activity in carbon accounting area
(1) This section applies if the EPA is satisfied that the person is not carrying out,

and has never carried out, the activity of standard or permanent forestry on a 10
carbon accounting area, or part of an accounting area, for which they are regis-
tered.

(2) The EPA must amend the register kept under section 57, and the records of car-
bon accounting areas kept under section 188(2), to remove the person’s regis-
tration in respect of the carbon accounting area, or part carbon accounting area. 15

(3) The person must surrender the unit balance that relates to the carbon account-
ing area (or part area).

(4) At least 60 days before amending the register, the EPA must notify the per-
son—
(a) that the EPA proposes to remove the person’s registration in respect of 20

the carbon accounting area, or part carbon accounting area; and
(b) of the reason for the proposed removal; and
(c) of the actions that the person may take to prevent the removal (for

example, provide evidence that the person carries out the activity on the
carbon accounting area). 25

(5) The EPA may still take action under this section if it is unable to notify the per-
son of its proposal to do so because it is not reasonably practicable to locate
them or their address.

Transmission of interest relating to standard or permanent forestry

174A Section 189 amended (Emissions returns for post-1989 forest land 30
activities)

(1) In section 189(8)(d)(i), replace “20 working days” with “60 working days”.
(2) In section 189(9), repeal the definition of mandatory emissions return

period.

174B Section 191 amended (Ceasing to be registered as participant in respect of 35
post-1989 forest land)
In section 191(3)(b)(i)(A), delete “(as defined in section 189(9))”.

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174C New section 191CA inserted (If participant has never carried out activity
in carbon accounting area)
After section 191, insert:

191CA If participant has never carried out activity in carbon accounting area
(1) This section applies if the EPA is satisfied that the person is not carrying out, 5

and has never carried out, the activity in Part 1 of Schedule 4 on a carbon
accounting area, or part of an accounting area, for which they are registered.

(2) The EPA must amend the register kept under section 57, and the records of car-
bon accounting areas kept under section 188(2), to remove the person’s regis-
tration in respect of the carbon accounting area, or part carbon accounting area. 10

(3) The person must surrender the unit balance that relates to the carbon account-
ing area (or part area).

(4) At least 60 days before amending the register, the EPA must notify the per-
son—
(a) that the EPA proposes to remove the person’s registration in respect of 15

the carbon accounting area, or part carbon accounting area; and
(b) of the reason for the proposed removal; and
(c) of the actions that the person may take to prevent the removal (for

example, provide evidence that the person carries out the activity on the
carbon accounting area). 20

(5) The EPA may still take action under this section if it is unable to notify the per-
son of its proposal to do so because it is not reasonably practicable to locate
them or their address.

175 Section 192 amended (Effect of transmission of interest in post-1989 forest
land) 25

(1) In the heading to section 192, replace “Effect of transmission” with “Trans-
mission”.

(2) In section 192(1)(a), (b), and (c), replace “listed in Part 1 of Schedule 4” with
“of standard forestry or permanent forestry”.

(3) In section 192(1), in the table, Parts A, B, and C, in the heading to the 4th col- 30
umn, replace “in Part 1 of Schedule 4” with “of standard or permanent for-
estry”.

(4) In section 192(1), in the table, Part B, in the 3rd and 4th columns, in the 1st and
2nd rows, after “forest land”, insert “(only if agreed under subsection (1A))”.

(5) After section 192(1), insert: 35
(1A) Despite subsection (1)(b), if a transferor covered by that paragraph grants a

registered forestry right or registered lease described in the second column of
Part B of the table in that subsection, this section applies only if, before the
date of transmission,—

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(a) the transferor and the transferee have agreed in writing that the trans-
feree is to become the participant in relation to the post-1989 forest land
to which the transmitted interest relates; and

(b) the transferor has given written notice of the agreement to the EPA.
(6) In section 192(2), replace “In subsections (1)” with “In subsections (1), (1A),”. 5
(7) In section 192(2)(a), replace “affected carbon accounting area” with

“CAA1”.
(8) Replace section 192(3) and (4) with:
(3) The transferor and transferee must give notice of the transmission to the EPA—

(a) within 20 working days of the date of transmission; or 10
(b) if the transmission occurred by operation of law, as soon as practicable

after the date of transmission.
(4) The notice must—

(a) include a final forestry emissions return prepared by the transferor under
section 189BA for the activity— 15
(i) that covers each CAA1; and
(ii) that uses the date of transmission as the relevant date; and

(b) include in that return a new unit balance report prepared by the trans-
feror under section 189EA for the activity that covers the following
carbon accounting areas (each a CAA2): 20
(i) for each CAA1 where the transmitted interest applies to its entire

area, a transferee CAA2 with the same boundaries as the CAA1:
(ii) for each other CAA1,—

(A) a transferee CAA2 for the part of the CAA1 to which the
transmitted interest relates; and 25

(B) a transferor CAA2 for the rest of the CAA1.
(9) In section 192(5), replace “A notice given under subsection (3)(a)(i)” with

“The notice”.
(10) Replace section 192(6) with:
(6) However, if the transmitted interest is part of a deceased participant’s estate,— 30

(a) for the transfer to the executor or administrator,—
(i) subsections (3) to (5) do not apply (so that no notice, final forestry

emissions return, or new unit balance report is required); but
(ii) section 193(2)(b) and (c) and (3) still applies; and

(b) for the transfer from the executor or administrator to a successor,— 35
(i) the transferee (not the transferor) must prepare the final forestry

emissions return and new unit balance report required by subsec-
tion (4); and

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(ii) for the purposes of those documents, the CAA1s are the CAA1s
from the transfer to the executor or administrator.

(11) In section 192(7)(a), replace “carbon accounting area or part of the carbon
accounting area” with “CAA1”.

(12) In section 192(7)(a), delete “required under section 189”. 5

176 Section 193 replaced (Effect of transmission of interest in post-1989 forest
land)
Replace section 193 with:

193 Effect of transmission of interest in post-1989 forest land
(1) This section applies if notice of a transmission is given to the EPA in accord- 10

ance with section 192, including a final forestry emissions return (for the
CAA1s) and new unit balance report (for the CAA2s).

(2) Starting on the date of transmission,—
(a) the emissions return is treated as being submitted (so that the total liabil-

ity or entitlement has effect, and the unit balance is updated, for the 15
CAA1s under section 189DA); and

(b) the transferee becomes a participant on the transferee CAA2s in the rele-
vant activity referred to in the fourth column of the table in section
192(1); and

(c) the transferor,— 20
(i) if there is 1 or more transferor CAA2s, is a participant in the rele-

vant activity described in section 192(1) on the transferor CAA2s
(instead of the CAA1s); or

(ii) otherwise, ceases to be a participant in that activity on the CAA1s;
and 25

(d) the unit balance of each CAA2 is the opening unit balance calculated for
it in the new unit balance report.

(3) The EPA must amend the register kept under section 57, and the records of car-
bon accounting areas kept under section 188(2), to record the effects of this
section. 30

176 Section 193 amended (Emissions returns in relation to transmitted
interests)
In section 193(2)(b)(i)(A), delete “(as specified in section 189(9))”.

177 New cross-heading above section 194 inserted
Before section 194, insert: 35

Information about status of forest land

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178 New sections 194AA to 194EL and cross-headings inserted
After section 194, insert:

Non-compliance for transmitted interests

194AA EPA may act if persons fail to give notice of transmitted interest
(1) Sections 128A and 128B apply to a person’s failure to give notice in 5

accordance with section 192 (the notice provision)—
(a) as if sections 128A and 128B referred to the transferor and transferee

(as applicable) instead of a participant; and
(b) with the modifications set out in this section.

(2) The deadline that the EPA must give the transferor and transferee under sec- 10
tion 128A(5) to give or correct the required notice is—
(a) 6 months after the end of the mandatory emissions return period in

which the date of transmission falls; or
(b) if the EPA gives its notice after the deadline in paragraph (a), the end

of the 90th working day after the EPA gives its notice. 15
(3) If the transferor and transferee do not give or correct the required notice by that

deadline, the EPA may either—
(a) take action under section 128A; or
(b) amend the register kept under section 57, and the records of carbon

accounting areas kept under section 188(2), to record that— 20
(i) the transferee ceased to be a participant in the relevant activity on

each transferee CAA2 immediately after becoming a participant
for those; and

(ii) if there are 1 or more transferor CAA2s, the transferor ceased to
be a participant in the relevant activity on the transferor CAA2s 25
immediately after becoming a participant for those.

(4) If the EPA acts under subsection (3)(b),—
(a) the transferee is liable to surrender the number of New Zealand units

equal to the unit balance of each transferee CAA2 (calculated under the
last emissions return submitted for the CAA2); and 30

(b) if there are 1 or more transferor CAA2s, the transferor is liable to surren-
der the number of New Zealand units equal to the unit balance of each
transferor CAA2 (calculated under the last emissions return submitted
for the CAA2); and

(c) see sections 188AC and 188AD, which require notice to the partici- 35
pant and notice to interested parties, if any.

(5) If the transferee or transferor submits an emissions return that assesses their
entitlement to receive (or be reimbursed) units in respect of a transferee CAA2

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149



or transferor CAA2 (as applicable), for any period starting on or after the date
of transmission, the entitlement takes effect only when (if ever)—
(a) the transferor and transferee give or correct the required notice; or
(b) the EPA takes action under section 128A that has the same effect as

the required notice. 5

Application to reconfigure carbon accounting areas for standard or permanent
forestry

194CA Application to reconfigure carbon accounting areas for standard or
permanent forestry

(1) A participant in an activity of standard forestry or permanent forestry may 10
apply to reconfigure any of the carbon accounting areas for the activity.

(2) The application must—
(a) specify the activity; and
(b) specify the land to which the application relates, which must be 1 or

more whole carbon accounting areas for the activity (each a CAA1); and 15
(c) include a final forestry emissions return prepared under section 189BA

for the activity—
(i) that covers the CAA1s; and
(ii) that uses the date on which the application is submitted to the EPA

as the relevant date; and 20
(d) include in that return a new unit balance report prepared under section

189EA for the activity that covers 1 or more carbon accounting areas
(CAA2s) consisting of all the same land in the CAA1s.

(3) The application must also—
(a) be signed by the applicant; and 25
(b) be submitted—

(i) in the prescribed manner and format; and
(ii) together with the prescribed fee (if any); and
(iii) together with the prescribed information (if any).

(4) However, subsection (1) is subject to the following provisions (which limit 30
reconfiguration):
(a) section 194FC(5) (carbon accounting areas (averaging)):
(b) section 194HD (approved swap land):
(c) section 194PE (temporary adverse event land).

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194CB Criteria to reconfigure carbon accounting areas for standard or
permanent forestry

(1) If a person submits an application under section 194CA (for a participant in
an activity of standard forestry or permanent forestry to reconfigure carbon
accounting areas for the activity), the EPA,— 5
(a) if satisfied that the criteria in subsection (2) are met, must approve the

application; or
(b) otherwise, may decline the application.

(2) The criteria are—
(a) that the application complies with section 194CA; and 10
(b) that the applicant has paid any prescribed fees or charges; and
(c) that any other criteria prescribed in regulations made under section

168(1)(na) are met.
(3) In considering the application, the EPA must treat the land to which it relates as

post-1989 forest land. 15

194CC Approval of application to reconfigure carbon accounting areas for
standard or permanent forestry

(1) This section applies if the EPA approves a person’s application under section
194CA (for a participant in an activity of standard forestry or permanent for-
estry to reconfigure carbon accounting areas for the activity). 20

(2) Starting on the day on which the application was submitted to the EPA,—
(a) the emissions return for the CAA1s is treated as being submitted (so that

the total liability or entitlement has effect, and the unit balance is
updated, for the CAA1s under section 189DA); and

(b) the person is a participant in the activity on the CAA2s (instead of the 25
CAA1s); and

(c) the person is not liable to surrender the unit balance of each CAA1; and
(d) the unit balance of each CAA2 is the opening unit balance calculated for

it in the new unit balance report.
(3) The EPA must amend the register kept under section 57, and the records of car- 30

bon accounting areas kept under section 188(2), to record the effects of this
section.

194CD Restriction start date of reconfigured carbon accounting area for
permanent forestry

(1) This section applies if a person reconfigures carbon accounting areas for per- 35
manent forestry by approval of an application under section 194CA.

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(2) For the purposes of section 194EA, the restriction start date of a CAA2 is the
latest restriction start date of the CAA1s that overlap with the CAA2 (because
any land in the CAA1 became land in the CAA2).

Application to change activity on post-1989 forest land

194DA Application to change activity on post-1989 forest land 5
(1) A participant in an initial activity on any post-1989 forest land may apply to

become a participant in a final activity on any of the land (to carry over the unit
balances of carbon accounting areas from the initial activity to the final activ-
ity).
Change from standard or permanent forestry 10

(2) If the initial activity is standard forestry or permanent forestry, the application
must—
(a) specify the initial activity and the final activity; and
(b) specify the land to which the application relates, which must be 1 or

more whole carbon accounting areas for the initial activity (each a 15
CAA1); and

(c) include a final forestry emissions return prepared under section 189BA
for the initial activity—
(i) that covers the CAA1s; and
(ii) that uses the date on which the application is submitted to the EPA 20

as the relevant date; and
(iii) that includes any liability or entitlement required to be included

by section 194DF(4) or 194DG(4); and
(d) include in that return a new unit balance report prepared under section

189EA for the final activity that covers the following 1 or more carbon 25
accounting areas (each a CAA2):
(i) CAA2s that have the same boundaries as the CAA1s, to the extent

that subparagraph (ii) does not apply; or
(ii) if the clear-fell exception applies and any land that is now in 1 or

more CAA1s was clear-felled after the forest sink covenant was 30
terminated,—
(A) a CAA2 for all of the land that was clear-felled; and
(B) a CAA2 for each CAA1 to the extent it was not clear-felled.

Change from PFSI activity
(3) If the initial activity is PFSI activity, the application must— 35

(a) specify the initial activity and the final activity; and

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(b) specify the land to which the application relates (the PFSI land), which
must be all of the forest land that a forest sink covenant is registered
against; and

(c) include an emissions return prepared under section 194DD for the ini-
tial activity that covers the PFSI land; and 5

(d) include in that return a new unit balance report prepared under section
194DE for the final activity that covers the following 1 or 2 carbon
accounting areas (each a CAA2):
(i) a CAA2 that has the same boundaries as the PFSI land, if sub-

paragraph (ii) does not apply; or 10
(ii) if the clear-fell exception applies and any of the PFSI land was

clear-felled after the forest sink covenant was terminated,—
(A) a CAA2 for all of the PFSI land that was clear-felled; and
(B) a CAA2 for the rest of the PFSI land.

General provisions 15
(4) The application must also—

(a) be signed by the applicant; and
(b) be submitted—

(i) in the prescribed manner and format; and
(ii) together with the prescribed fee (if any); and 20
(iii) together with the prescribed information (if any).

(5) The following table specifies the matters referred to in this section (under the
relevant headings):
Previous activity Initial activity Final activity Clear-fell exception

PFSI activity Standard forestry
PFSI activity Permanent forestry Exception applies
Standard forestry Permanent forestry

PFSI activity Standard forestry Permanent forestry Exception applies
Permanent forestry Standard forestry

(6) As indicated in the table, the clear-fell exception applies to—
(a) a change from PFSI activity (initial activity) to permanent forestry (final 25

activity):
(b) a change from standard forestry (initial activity) to permanent forestry

(final activity), if the activity on the land was previously changed from
PFSI activity (previous activity) to standard forestry under this section.

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194DB Criteria to change activity on post-1989 forest land
(1) If a person submits an application under section 194DA (for a participant in

an initial activity on post-1989 forest land to become a participant in a final
activity on the land), the EPA,—
(a) if satisfied that the criteria in subsection (2) are met, must approve the 5

application; or
(b) otherwise, may decline the application.

(2) The criteria are—
(a) that the application complies with section 194DA; and
(b) that the applicant has paid any prescribed fees or charges; and 10
(c) if the initial activity is PFSI activity, that the EPA is satisfied that the

person would (if appropriate) qualify to be registered as a participant in
respect of the land under section 187; and

(d) that any other criteria prescribed in regulations made under section
168(1)(na) are met. 15

(3) In considering the application,—
(a) if the initial activity is standard forestry or permanent forestry, the EPA

must treat the land to which the application relates as post-1989 forest
land; or

(b) if the initial activity is PFSI activity, the EPA must treat the forest land to 20
which the application relates as post-1989 forest land.

194DC Approval of application to change activity on post-1989 forest land
(1) This section applies if the EPA approves a person’s application under section

194DA (for a participant in an initial activity on post-1989 forest land to
become a participant in a final activity on the land). 25

(2) If the initial activity is standard forestry or permanent forestry, then, starting on
the day on which the application was submitted to the EPA,—
(a) the emissions return for the CAA1s is treated as being submitted (so that

the total liability or entitlement has effect, and the unit balance is
updated, for the CAA1s under section 189DA); and 30

(b) the person ceases to be a participant in the initial activity on the CAA1s;
and

(c) the person becomes a participant in the final activity on the CAA2s; and
(d) the person is not liable to surrender the unit balance of each CAA1; and
(e) the unit balance of each CAA2 is the opening unit balance calculated for 35

it in the new unit balance report.
(3) If the initial activity is PFSI activity, then, starting on the day on which the

application was submitted to the EPA,—

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(a) the forest sink covenant registered against the PFSI land is terminated;
and

(b) the person becomes a participant in the final activity on the CAA2s; and
(c) the unit balance of each CAA2 is the opening unit balance calculated for

it in the new unit balance report. 5
(4) The EPA must amend the register kept under section 57, and the records of car-

bon accounting areas kept under section 188(2), to record the effects of this
section.

194DD Emissions return for application to change from PFSI activity
(1) An emissions return prepared under this section must— 10

(a) specify the PFSI land that the return covers; and
(b) specify that the person carried out PFSI activity on the PFSI land; and
(c) set out the calculation under subsection (2) of the person’s liability or

entitlement for emissions and removals from the PFSI land while the for-
est sink covenant was registered against it. 15

(2) A person’s liability or entitlement for the PFSI land (g) is calculated as fol-
lows:

g = r − e
where—
r is the number of units transferred by the Crown in respect of the PFSI 20

land while the forest sink covenant was registered against it
e is the number of units transferred to the Crown in respect of the PFSI

land while the forest sink covenant was registered against it.
(3) The emissions return must—

(a) include the prescribed information (if any); and 25
(b) be signed by the participant; and
(c) when submitted under the relevant provision, be submitted—

(i) in the prescribed manner and format; and
(ii) together with the prescribed fee (if any); and
(iii) together with the prescribed information (if any). 30

194DE New unit balance report for application to change from PFSI activity
(1) A new unit balance report prepared under this section must—

(a) specify the CAA2 that the report covers, or specify and define both
CAA2s that the report covers; and

(b) specify the PFSI land (which will form the CAA2 or CAA2s); and 35

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(c) set out the calculation under this section of the opening unit balance of
the CAA2 or each CAA2.

(2) If there is only 1 CAA2 (formed from all the PFSI land), the opening unit bal-
ance of the CAA2 (v) is calculated as the person’s liability or entitlement for
the PFSI land (under the emissions return for the PFSI land that includes the 5
report).

(3) If there are 2 CAA2s, the opening unit balance of a CAA2 (v) is calculated as
follows:

v = g × (a ÷ b)
where— 10
g is the person’s liability or entitlement for the PFSI land (under the emis-

sions return for the PFSI land that includes the report)
a is the area of overlap between the CAA2 and the PFSI land (in hectares)
b is the area of the PFSI land (in hectares).

194DF Liability to surrender units on transfer from permanent forestry to 15
standard forestry in carbon accounting area (averaging)

(1) This section applies if—
(a) a person submits an application under section 194DA; and
(b) the initial activity is permanent forestry and the final activity is standard

forestry; and 20
(c) on the constitution date for any CAA2, any land in it (area A) will have

a determined carbon stock greater than its nominal average carbon stock.
(2) If the EPA accepts the application, the person is liable to surrender the number

of New Zealand units (s) calculated as follows:
s = (d − n) × a 25

where—
d is the determined carbon stock of area A, determined as if it were in a

carbon accounting area (averaging) (in tonnes per hectare)
n is what the nominal average carbon stock for area A will be when CAA2

is constituted (in tonnes per hectare) 30
a is the area (in hectares) of area A.

(3) If CAA2 will have 2 or more areas of land that the regulations require to be
treated separately for the purpose of determining their nominal average carbon
stock or determined carbon stock (or both), subsection (2) applies separately
in respect of each area. 35

(4) The liability to surrender units under subsection (2)—

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(a) is to be treated as a liability for emissions for the CAA1 that includes
area A during the emissions return period for the emissions return under
section 194DA(2)(c); and

(b) must be included in that emissions return as part of the calculation under
section 189CA of the person’s gross liability or entitlement required by 5
section 189BA(1)(c)(iii).

(5) In this section, terms defined in section 194FA have the meanings given in
that section.

194DG Liability to surrender units on transfer from standard forestry in carbon
accounting area (averaging) to permanent forestry 10

(1) This section applies if—
(a) a person submits an application under section 194DA; and
(b) the initial activity is standard forestry and the final activity is permanent

forestry; and
(c) any land (area A) in a CAA1 that is a carbon accounting area (averag- 15

ing)—
(i) has a subsequent rotation forest; and
(ii) has a determined carbon stock that is less than the nominal aver-

age carbon stock for area A.
(2) If the EPA accepts the application, the person is liable to surrender the number 20

of New Zealand units (s) calculated as follows:
s = (n − d) × a

where—
n is the nominal average carbon stock for area A (in tonnes per hectare)
d is the determined carbon stock of area A (in tonnes per hectare) 25
a is the area (in hectares) of area A.

(3) If a CAA1 has 2 or more areas of subsequent rotation forest that the regulations
require to be treated separately for the purpose of determining their nominal
average carbon stock or determined carbon stock (or both), subsection (2)
applies separately in respect of each area. 30

(4) The liability to surrender units under subsection (2)—
(a) is to be treated as a liability for emissions for CAA1 during the emis-

sions return period for the emissions return under section
194DA(2)(c); and

(b) must be included in that emissions return as part of the calculation under 35
section 189CA of the person’s gross liability or entitlement required by
section 189BA(1)(c)(iii).

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(5) In this section, terms defined in section 194FA have the meanings given in
that section.

Restrictions for permanent forestry land

194EA Permanent forestry period for land
(1) If a person becomes registered as a participant carrying out permanent forestry 5

in respect of any land, the permanent forestry period for the land is—
(a) an initial period of 50 years starting on the restriction start date; and
(b) any 1 or more consecutive periods of a further 25 years for which a par-

ticipant chooses the option under section 194EK(1)(a).
(2) The restriction start date for the land is specified by column 4 of the table, 10

which applies to a situation as follows:
(a) if no initial activity is specified (in column 2), it means the person

became registered for the permanent forestry without reference to any
initial activity on the land:

(b) if an initial activity is specified (in column 2) and no previous activity is 15
specified (in column 1), it means—
(i) the person became registered for the permanent forestry by

acceptance of an application under section 194DA to change
from the initial activity; and

(ii) the person previously became registered for the initial activity 20
without reference to any previous activity:

(c) if an initial activity is specified (in column 2) and a previous activity is
specified (in column 1), it means—
(i) the person became registered for the permanent forestry by

acceptance of an application under section 194DA to change 25
from the initial activity; and

(ii) the person previously became registered for the initial activity by
acceptance of an application under section 194DA to change
from the previous activity.

(3) However, as indicated in column 5 of the table, the restriction start date is the 30
registration date for the CAA2 formed from clear-felled land if—
(a) the clear-fell exception applied in the application under section 194DA

to change from the initial activity; and
(b) any of the land in the application was clear-felled after the forest sink

covenant was terminated. 35
(4) After any land’s permanent forestry period has started, its permanent forestry

period—

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(a) may change under section 194CD (if carbon accounting areas are
reconfigured); but

(b) does not change if the land becomes part of a new carbon accounting
area when—
(i) a person ceases to be a participant on other land because of sec- 5

tion 188AB (for a natural event that permanently prevents re-
establishing a forest or land cleared for best practice forest man-
agement); or

(ii) an interest is transmitted under section 192; or
(iii) other land is removed in accordance with section 194EC (an 10

exception requiring the Minister’s approval); or
(iv) any of the land in the carbon accounting area becomes temporary

adverse event land under section 194NC.
(5) In this section,—

covenant date means the date of registration of the forest sink covenant on 15
land
registration date means the date on which the person became registered as a
participant in permanent forestry on the land.

(6) The following table contains the columns referred to in this section:
Column 1 Column 2 Column 3 Column 4 Column 5

Previous
activity

Initial
activity Final activity

Restriction
start date

Later restriction
start date (for
clear-felled land)

Permanent
forestry

Registration
date

PFSI activity Permanent
forestry

Covenant date Registration date

Standard
forestry

Permanent
forestry

Registration
date

PFSI activity Standard
forestry

Permanent
forestry

Covenant date Registration date

194EB Restriction on ceasing to be registered for permanent forestry 20
(1) The only ways in which a person may cease to be registered as a participant

carrying out permanent forestry in respect of any land are as follows:
(a) the person is exempted from this section by an Order in Council under

section 60A:
(b) a person ceases to be a participant because of— 25

(i) section 188AB (for a natural event that permanently prevents re-
establishing a forest or land cleared for best practice forest man-
agement); or

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(ii) section 194QC(2)(e) (for temporary adverse event land that
becomes permanently affected land):

(c) the land becomes land for which a transferee under section 192 is instead
registered as carrying out permanent forestry (if there is a transmitted
interest): 5

(d) the registration is removed in accordance with section 194EC (an
exception requiring the Minister’s approval):

(e) the registration for the whole carbon accounting area that includes the
land is removed because of section 194EH (after land is deforested):

(f) after the permanent forestry period ends,— 10
(i) the EPA removes the registration under section 194EL (because

the person chooses that option, for example):
(ii) the person changes from permanent forestry to standard forestry

on the land by application under section 194DA.
(2) This section overrides any other provision of this Act. 15

194EC Minister may approve removal of land from permanent forestry
(1) This section sets out an exception by which a person can cease to be registered

as a participant carrying out permanent forestry in respect of any land (the
removal of land), whether all or part of a carbon accounting area.

(2) The person must— 20
(a) first obtain the Minister’s approval in writing to the removal of land; and
(b) then apply for the removal of land under section 188AA(4)(a)(i) or

(ii) and comply with sections 191AA and 191AB or sections
191BA and 191BB (whichever apply).

(3) The provisions referred to in subsection (2)(b), and the provisions applied by 25
them, apply as if the land subject to the removal of land were forest land.

(4) The Minister may approve the removal of land only to the extent that the Min-
ister is satisfied that—
(a) it would be unreasonable in the circumstances to require the person to

remain registered in respect of the land; and 30
(b) the removal will not materially undermine the environmental integrity of

1 or both of the following:
(i) the activity of permanent forestry as a whole (not just by that per-

son):
(ii) the emissions trading scheme. 35

(5) In considering those matters, the Minister must have regard to—
(a) the desirability of minimising any compliance and administrative costs

associated with the emissions trading scheme; and

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(b) the relative costs of approving or not approving the removal of land, and
who bears the costs; and

(c) any other matters the Minister considers relevant.

194ED Exception from prohibition on clear-felling and deforestation
(1) Sections 194EE to 194EI do not apply to— 5

(a) land for which a person ceases to be a participant because of—
(i) section 188AB (for a natural event that permanently prevents re-

establishing a forest or land cleared for best practice forest man-
agement); or

(ii) section 194QC(2)(e) (for temporary adverse event land that 10
becomes permanently affected land); or

(b) temporary adverse event land.
(2) However, if land ceases to be temporary adverse event land and section

194SC applies, sections 194EE to 194EI do apply to the land.
(3) For that purpose,— 15

(a) any clear-felling or deforestation that occurred while the land was tem-
porary adverse event land is to be treated as having occurred on the date
the land ceased to be temporary adverse event land; but

(b) any penalty must be calculated by reference to the pre-event carbon
stock rate for the land under section 194NA(3)(d)(i). 20

194EE Permanent forestry land must not be clear-felled
(1) A person who is registered as a participant carrying out permanent forestry on

any land must ensure that the land is not clear-felled.
(2) If any of the land is clear-felled (the clear-felled land),—

(a) the person must, as soon as practicable, notify the EPA of the clear-fell- 25
ing; and

(b) the EPA must apply section 194EF (pecuniary penalty for clear-fell-
ing) when required by that section.

194EF Pecuniary penalty for clear-felling of permanent forestry land
(1) This section applies after— 30

(a) a person has notified the EPA of clear-felling under section 194EE(2);
and

(b) a final forestry emissions return has been submitted that covers the 1 or
more carbon accounting areas that include the clear-felled land.

(2) The EPA must apply to the court for a pecuniary penalty order against the per- 35
son for contravening section 194EE(1) unless the EPA is satisfied that the
defence applies.

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(3) The court—
(a) must determine whether the person has contravened section 194EE(1);

and
(b) must determine whether the defence applies; and
(c) if it is satisfied that the person has contravened the provision without a 5

defence,—
(i) must make a declaration of contravention; and
(ii) must order the person to pay a pecuniary penalty to the Crown.

(4) The amount of the pecuniary penalty—
(a) must be the deemed value of the forest that was on the clear-felled land, 10

as determined by regulations; but
(b) may be reduced, at the court’s discretion, if the court is satisfied that the

person has a reasonable excuse for the contravention.
(5) In this section, defence means that—

(a) the clear-felling was beyond the person’s control; and 15
(b) the person could not reasonably have foreseen the clear-felling; and
(c) the person could not reasonably have taken steps to prevent the clear-

felling.

194EG Regulations for pecuniary penalty for clear-felling
(1) The Governor-General may, by Order in Council made on the recommendation 20

of the Minister, make regulations for 1 or more of the following purposes in
relation to a pecuniary penalty under section 194EF:
(a) specifying the deemed value of the forest that was on clear-felled land:
(b) specifying different deemed values based on different factors, for

example,— 25
(i) the area of the clear-felled land in hectares:
(ii) the geographic region of the clear-felled land:
(iii) the forest species, or the type of forest, that was on the clear-felled

land:
(iv) the age or size of the forest that was on the clear-felled land: 30

(c) providing for any other matters contemplated by section 194EF,
necessary for its administration, or necessary for giving it full effect.

(2) Before recommending the making of regulations under this section, the Minis-
ter must consult, or be satisfied that the chief executive has consulted, the per-
sons (or representatives of those persons) that appear to the Minister or the 35
chief executive likely to be substantially affected by the regulations.

(3) The process for consultation must include—

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(a) adequate and appropriate notice of the proposed terms of the recommen-
dation, and of the reasons for it; and

(b) a reasonable opportunity for interested persons to consider the recom-
mendation and make submissions; and

(c) adequate and appropriate consideration of submissions. 5
(4) Before recommending the making of regulations under this section, the Minis-

ter must also consider—
(a) the differences in value between forests of different types or ages or with

trees of different forest species or sizes; and
(b) the market value of the wood and other products removed from forests, 10

and the historic variation in the market value; and
(c) the need to assign an appropriate value for forests with no market, or for

which no market price is available, so as to deter clear-felling on all land
in permanent forestry; and

(d) any need to deem the volume of the harvest from a forest. 15
(5) Regulations made under this section come into force 3 months after the date of

their notification in the Gazette or any later date specified in the regulations.
(6) A failure to comply with this section does not affect the validity of regulations

made under it.

194EH Permanent forestry land must not be deforested 20
(1) A person who is registered as a participant carrying out permanent forestry on

any land must ensure that the land is not deforested.
(2) If any of the land is deforested (the deforested land),—

(a) the person ceases to be a participant in permanent forestry in respect of
each carbon accounting area that includes any deforested land (each a 25
CAA1); and

(b) accordingly,—
(i) the person must notify the EPA under section 188AA(4)(b) that

they have ceased to carry out the activity on the CAA1s; and
(ii) sections 191AA and 191AB apply in respect of the CAA1s; 30

and
(c) the EPA must apply section 194EI (pecuniary penalty for deforesta-

tion).

194EI Pecuniary penalty for deforestation of permanent forestry land
(1) If this section applies, the EPA must apply to the court for a pecuniary penalty 35

order against the person for contravening section 194EH(1) unless the EPA is
satisfied that the defence applies.

(2) The court—

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(a) must determine whether the person has contravened section 194EH(1);
and

(b) must determine whether the defence applies; and
(c) if it is satisfied that the person has contravened the provision without a

defence,— 5
(i) must make a declaration of contravention; and
(ii) must order the person to pay a pecuniary penalty to the Crown.

(3) The amount of the pecuniary penalty, in dollars (a), must be calculated as fol-
lows:

a = b × c 10
where—
b is the number of units equal to the sum of the unit balance of each CAA1

that was calculated under the last emissions return submitted for the
CAA1 before the clearing that caused the deforestation

c is the price, in dollars, of carbon per tonne set by or in accordance with 15
regulations made under section 30W.

(4) However, the court may reduce the amount, at its discretion, but only if the
court is satisfied that the person has a reasonable excuse for the contravention.

(5) In this section, defence means that—
(a) the deforestation was beyond the person’s control; and 20
(b) the person could not reasonably have foreseen the deforestation; and
(c) the person could not reasonably have taken steps to prevent the defores-

tation.

194EJ Due dates for payment of penalties and recovery of EPA’s costs
(1) This section applies if the court orders that a person pay a pecuniary penalty 25

under section 194EF or 194EI.
(2) The court must also order that the penalty must be applied first to pay the

EPA’s actual costs in bringing the proceedings.
(3) The person must pay the penalty—

(a) within 20 working days after the date on which the order is made or by 30
any later date specified by the order; or

(b) by the date or dates agreed under a deferred payment arrangement under
section 135A.

194EK Option must be chosen at end of permanent forestry period
(1) After the permanent forestry period ends, the participant carrying out perman- 35

ent forestry on post-1989 forest land must choose an option for each carbon
accounting area (each a CAA1) by doing 1 of the following:

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(a) giving notice to the EPA that they will carry out permanent forestry on
the CAA1 for a further 25 years; or

(b) removing the CAA1 from permanent forestry by any means available
under this Act.

(2) The participant must choose an option before or when the first of the following 5
documents is submitted for the CAA1:
(a) a provisional forestry emissions return; or
(b) a final forestry emissions return under section 189AB for the manda-

tory emissions return period in which the permanent forestry period
ended. 10

(3) If the participant does not choose an option before or when submitting an emis-
sions return described by subsection (2), or does not submit the final forestry
emissions return described by subsection (2), the EPA must give notice to
the participant.

(4) The EPA’s notice must state— 15
(a) that the participant must choose an option for each CAA1 within 30

working days after the EPA gave its notice; and
(b) that a CAA1 will be removed from permanent forestry if the participant

does not choose an option for it by then.

194EL Removal of carbon accounting area from permanent forestry 20
(1) This section applies to a CAA1 if the participant does not choose an option for

the CAA1 by the deadline in the EPA’s notice given under section 194EK(3).
(2) As a result,—

(a) the participant ceases to be a participant in permanent forestry on the
CAA1; and 25

(b) the participant is liable to surrender the number of New Zealand units
equal to the unit balance of the CAA1 (calculated under the last emis-
sions return submitted for the CAA1).

(3) The EPA must amend the register kept under section 57, and the records of car-
bon accounting areas kept under section 188(2), to record the effects of this 30
section.

179 New subparts 5 and 6 of Part 5 inserted
After section 194EL (as inserted by section 178), insert:

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Subpart 5—Averaging accounting methodology

General provisions

194FA Interpretation for subpart 5
In this subpart,—
approved swap land means land that— 5
(a) has become approved swap land under section 194GC(2)(f) or

194KE(2)(c); and
(b) has not ceased to be approved swap land under a provision referred to in

section 194HA

average carbon equality, in relation to land in a carbon accounting area (aver- 10
aging), means that the determined carbon stock of the land is equal to the nom-
inal average carbon stock for the land
carbon accounting area (averaging) has the meaning given by section
194FC(3)

determined carbon stock, for land in a carbon accounting area (averaging), 15
means the carbon stock of the land determined in accordance with regulations
made under section 194LA
excess forest land has the meaning given in section 194JB
expected carbon stock, for remainder land, has the meaning given in section
194JA 20
first rotation forest has the meaning given by section 194FD(1) and (2)
nominal average carbon stock, for land in a carbon accounting area (averag-
ing), means the expected long-term average level of carbon stock of the land
over multiple forest rotations determined in accordance with regulations made
under section 194LA 25
non-forest land has the meaning given in section 194JB
qualifying forest land has the meaning given in section 194JB(3)
reference carbon stock, for a CAA1, has the meaning given in section
194GA(2)(e)

release criteria has the meaning given in section 194JA 30
release date, for approved swap land, has the meaning given in section
194GC(2)(g)

remainder land has the meaning given in section 194JB
subsequent rotation forest has the meaning given by section 194FD(4)
swap application date means the date on which an application for a carbon 35
equivalent forest land swap was submitted to the EPA under section 194GA.

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194FB Averaging accounting methodology
(1) The object of averaging accounting methodology is to account for emissions

and removals from an activity of standard forestry—
(a) by reference to the expected long-term average level of carbon stock of

the land over multiple forest rotations, rather than by reference to short- 5
term changes in the actual carbon stock of the land (as required by sec-
tions 63 and 64); and

(b) in a way that achieves approximately the same result in the long term as
would have been achieved using carbon stock change accounting but
without the repeated receipt and surrender of units for each forest rota- 10
tion.

(2) The number of units that a participant for a carbon accounting area (averaging)
is entitled to receive, or is liable to surrender, is determined by reference to the
expected long-term average carbon stock of the land over multiple forest rota-
tions and changes in that average. 15

(3) In general terms, the participant—
(a) is entitled to receive New Zealand units for removals—

(i) for land that has a first rotation forest, if—
(A) it has not reached average carbon equality; or
(B) after it reaches average carbon equality, its nominal average 20

carbon stock increases;
(ii) for land that has a subsequent rotation forest, if its nominal aver-

age carbon stock increases; and
(b) is liable to surrender units for emissions—

(i) for land that has first rotation forest and has reached average car- 25
bon equality, if its nominal average carbon stock decreases; or

(ii) for land that has subsequent rotation forest, if its nominal average
carbon stock decreases; or

(iii) in any case, if the land is deforested.

194FC Averaging accounting applies to carbon accounting areas (averaging) 30
(1) Averaging accounting methodology applies in respect of emissions and remov-

als from an activity of standard forestry on a carbon accounting area (averag-
ing).

(2) The participant in respect of a carbon accounting area (averaging)—
(a) is entitled to receive New Zealand units, and liable to surrender New 35

Zealand units, for the emissions and removals from the activity in
accordance with regulations made under section 194LA; and

(b) if provided in the regulations, is not required to—

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(i) calculate emissions and removal for which they are not liable to
surrender, or entitled to receive, units; or

(ii) submit emissions returns covering a carbon accounting area (aver-
aging) in relation to which they are not liable to surrender, or
entitled to receive, units. 5

(3) A carbon accounting area in respect of which a participant is registered in
respect of an activity of standard forestry is a carbon accounting area (aver-
aging) if—
(a) its constitution date is after 31 December 2020; and
(b) it was constituted— 10

(i) under section 188 from land that was not part of a previous carbon
accounting area; or

(ii) under section 194DC from land on which the initial activity was
permanent forestry or PFSI activity; or

(iii) from a reconfiguration of 1 or more carbon accounting areas 15
(averaging) (and no other land).

(4) See also clause 26 of Schedule 1AA, which allows some other carbon
accounting areas to be converted into carbon accounting areas (averaging).
Limit on reconfiguration

(5) Carbon accounting areas cannot be reconfigured (whether by application under 20
section 194CA or by any other process that requires the submission of a new
unit balance report) so as to combine in a CAA2 land from a CAA1 that is a
carbon accounting area (averaging) and land from a CAA1 that is not.

194FD First rotation forest and subsequent rotation forest
(1) Land in a carbon accounting area (averaging) has a first rotation forest if— 25

(a) the land has not been cleared since it became forest land; or
(b) the land,—

(i) having been forest land, was deforested; and
(ii) remained deforested for at least the stand-down period prescribed

in regulations made under section 194LA (but see subsection 30
(4)); and

(iii) was re-established as forest land; and
(iv) has not been cleared since that re-establishment; or

(c) the land—
(i) is post-1989 forest land because of paragraph (a)(iii) to (vii) of 35

the definition of post-1989 forest land in section 4; and
(ii) has not been cleared since it became post-1989 forest land; or

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(d) the land is declared by regulations made under section 194LA to have
a first rotation forest.

(2) However, land that would otherwise have a first rotation forest under subsec-
tion (1) does not have a first rotation forest if it is declared by regulations
made under section 194LA to have a subsequent rotation forest. 5

(3) Subsection (1)(b)(ii) does not apply if the deforestation referred to in sub-
section (1)(b)(i) occurred before the commencement of this section.

(4) Land in a carbon accounting area (averaging) has a subsequent rotation forest
if it does not have a first rotation forest.

Carbon equivalent forest land swaps: applications 10

194GA Application for carbon equivalent forest land swap
(1) A participant in an activity of standard forestry on 1 or more carbon accounting

areas (averaging) may apply to the EPA to swap other land for those areas (to
transfer the unit balance from the carbon accounting areas (averaging) to the
new land). 15

(2) The application must—
(a) specify the carbon accounting areas (averaging) to which the application

relates (each a CAA1); and
(b) specify the land proposed to be swapped for each CAA1; and
(c) include a final forestry emissions return prepared under section 189BA 20

for the activity—
(i) that covers the CAA1s; and
(ii) that uses the date on which the application is submitted to the EPA

as the relevant date; and
(d) include in that return a new unit balance report prepared under section 25

189EA that covers 1 or more carbon accounting areas (each a CAA2)
for each CAA1 consisting of the land specified under paragraph (b);
and

(e) include—
(i) the carbon stock of each CAA1 on the swap application date 30

determined in accordance with regulations made under section
194LA (the reference carbon stock for the CAA1); and

(ii) if the person proposed as the participant in respect of any of the
CAA2s is not already registered as a participant, the information
necessary for that person to become registered; and 35

(iii) any other information prescribed in regulations made under sec-
tion 194LA.

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(3) If the person proposed as the participant in respect of any of the CAA2s is not
the participant in respect of the CAA1s, the application must be made jointly
with that other person.

(4) The application must—
(a) be signed by all of the applicants; and 5
(b) be submitted—

(i) in the prescribed manner and format; and
(ii) together with the prescribed fee (if any); and
(iii) together with the prescribed information (if any).

194GB Criteria for carbon equivalent forest land swap 10
(1) If a person submits an application under section 194GA for a carbon equiva-

lent forest land swap, the EPA,—
(a) if satisfied that the criteria in subsection (2) are met, must approve the

application; or
(b) otherwise, may decline the application. 15

(2) The criteria are that—
CAA1 criteria

(a) the land in each CAA1 is 1 or both of the following:
(i) land that has a first rotation forest and has reached average carbon

equality: 20
(ii) land that has a subsequent rotation forest; and

(b) the forest species on each CAA1 were established by direct planting
activities, including direct seeding but excluding natural forest regenera-
tion; and
CAA2 criteria 25

(c) the land in each CAA2 is 1 or more of the following:
(i) land that is not forest land on the swap application date, but if it

were to become forest land—
(A) would be post-1989 forest land; and
(B) would meet the criteria in section 194FD for having a 30

first rotation forest:
(ii) post-1989 forest land that—

(A) became post-1989 forest land less than 2 years before the
swap application date; and

(B) meets the criteria in section 194FD for having a first rota- 35
tion forest:

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(iii) offsetting forest land under an approved offsetting forest land
application that was removed as offsetting forest land under sec-
tion 186CA within the period prescribed in regulations made
under section 194LA:

(iv) land that was approved swap land but became excess forest land 5
and ceased to be approved swap land under section 194JF(2)(e)
within the period prescribed in regulations made under section
194LA; and

(d) the total area (whether or not contiguous) of the CAA2s for a CAA1 is
equal to or greater than the area of that CAA1; and 10

(e) each individual parcel that makes up the CAA2 is at least 1 hectare and
has an average width of at least 30 metres; and
Participant criteria

(f) the participant in respect of each CAA2 would, if the land in the CAA2
were forest land,— 15
(i) if they are not already registered as a participant in the activity,

qualify to be registered under section 57; and
(ii) qualify under section 187 to be registered as a participant in

respect of the CAA2; and
Release criteria 20

(g) the EPA is satisfied that, on the release date, the release criteria are likely
to be met in respect of each CAA1 and the CAA2s proposed in respect
of it; and
Prescribed criteria

(h) any other criteria prescribed in regulations made under section 194LA 25
are met.

194GC Effect of approval of application to swap land
(1) This section applies if the EPA approves an application under section 194GA

for a carbon equivalent forest land swap.
(2) Starting on the swap application date,— 30

(a) the emissions return for the CAA1s is treated as being submitted (so that
the total liability or entitlement has effect, and the unit balance is
updated, for the CAA1s under section 189DA); and

(b) if any of the land proposed to be included in a CAA2 is already in a car-
bon accounting area, the participant for that land is liable to surrender 35
the number of New Zealand units equal to the unit balance of that carbon
accounting area; and

(c) the persons proposed as participants for CAA2s are participants in the
activity on the CAA2s; and

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(d) the participant in respect of the CAA1s—
(i) ceases to be a participant in the activity on the CAA1s; and
(ii) is not liable to surrender the unit balances of the CAA1s; and

(e) the unit balance of each CAA2 is the opening unit balance calculated for
it in the new unit balance report; and 5

(f) the land in the CAA2s for a CAA1 is the approved swap land for that
CAA1; and

(g) the release date for the approved swap land for a CAA1 is—
(i) if, on the swap application date, every hectare of land in the

CAA1 had forest species on it that had tree crown cover of more 10
than 30%, 4 years after the swap application date; or

(ii) if not, 4 years after the start of the last time the CAA1 was cleared
before the swap application date.

(3) The EPA must amend the register kept under section 57, and the records of car-
bon accounting areas kept under section 188(2), to record the effects of this 15
section.

Carbon equivalent forest land swaps: approved swap land

194HA Duration of approved swap land status
(1) Land that becomes approved swap land for a CAA1 under section

194GC(2)(f) remains approved swap land until one of the following occurs: 20
(a) the land meets the release criteria and is released from being approved

swap land on the release date under section 194JF(2)(c):
(b) the person ceases to be a participant because of section 188AB (for a

natural event that permanently prevents re-establishing a forest):
(c) the land becomes temporary adverse event land under section 194NC: 25
(d) the land is non-forest land and ceases to be approved swap land under

section 194JF(2)(d):
(e) the land is excess forest land and ceases to be approved swap land under

section 194JF(2)(e):
(f) the land is removed land and ceases to be approved swap land under 30

section 194KE(2)(d).
(2) To avoid doubt, the land continues to be approved swap land even if the carbon

accounting areas containing the land are reconfigured (whether under section
194CC or by any other process that requires the submission of a new unit bal-
ance report). 35

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194HB Effect of being approved swap land
All of the provisions of this Act that apply to post-1989 forest land that is in a
carbon accounting area (averaging) apply to approved swap land as if it were
post-1989 forest land, subject to sections 194HC and 194HD.

194HC Subsequent rotation forest 5
(1) Approved swap land is to be treated as having a subsequent rotation forest

(despite section 194FD(1)).
(2) Subsection (1) continues to apply to remainder land until—

(a) it is first cleared after the release date (even though it ceases to be
approved swap land on the release date); or 10

(b) the participant becomes registered for an activity of permanent forestry
on the land.

(3) To avoid doubt, when subsection (1) ceases to apply to any land, section
194FD applies.

194HD Reconfiguration restrictions 15
(1) A carbon accounting area containing approved swap land cannot be reconfig-

ured (whether by application under section 194CA or by any other process
that requires the submission of a new unit balance report) except as permitted
by subsection (2).

(2) Reconfiguration is permitted— 20
(a) to reconfigure the carbon accounting areas that contain the approved

swap land for the same CAA1 without including any other land:
(b) to remove land that is affected by a natural event that permanently pre-

vents re-establishing a forest in accordance with sections 188AB and
191BA: 25

(c) to remove land that becomes temporary adverse event land under sec-
tion 194NC:

(d) on the release date as required under section 194JB:
(e) to substitute land under sections 194KC to 194KE.

194HE No transfers to permanent forestry 30
A participant for a carbon accounting area containing approved swap land can-
not apply under section 194DA to become a participant in an activity of per-
manent forestry on that land.

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Carbon equivalent forest land swaps: release of approved swap land

194JA Release criteria
(1) The release criteria in respect of a CAA1 and its approved swap land that is

remainder land are that, on the release date,—
(a) the area of the remainder land is equal to or greater than the area of 5

CAA1; and
(b) the expected carbon stock of the remainder land is equal to or greater

than the reference carbon stock of the CAA1; and
(c) any other criteria prescribed in regulations made under section 194LA

are met. 10
(2) The expected carbon stock of land is the carbon stock that the land is expec-

ted to have achieved at the end of the period prescribed in regulations made
under section 194LA, determined in accordance with the regulations made
under section 194LA.
Adjustment if adverse event 15

(3) If any of the approved swap land ceases to be approved swap land under sec-
tion 194HA(1)(b) or (c) (because of adverse events) on or before the release
date,—
(a) for subsection (1)(a), the area of the CAA1 on the swap application

date is to be treated as reduced in accordance with subsection (4); and 20
(b) for subsection (1)(b), the reference carbon stock for the CAA1 is to be

treated as reduced in accordance with subsection (5).
(4) The reduced area of the CAA1 (in hectares) (y) is calculated as follows:

y = a × (j ÷ k)
where— 25
a is the area of the CAA1 on the swap application date (in hectares)
j is the area of the land that ceased to be approved swap land under sec-

tion 194HA(1)(b) or (c) (in hectares)
k is the area of the approved swap land when the land swap was approved

(being all of the CAA2s under section 194GA) (in hectares). 30
(5) The reduced reference carbon stock for the CAA1 (in tonnes) (w) is calculated

as follows:
w = c × (j ÷ k)

where—
c is the reference carbon stock for the CAA1 (in tonnes) 35
j is the area of the land that ceased to be approved swap land under sec-

tion 194HA(1)(b) or (c) (in hectares)

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k is the area of the approved swap land when the land swap was approved
(being all of the CAA2s under section 194GA) (in hectares).

194JB Notice of compliance with release criteria
(1) The participants in an activity of standard forestry on the approved swap land

for a CAA1 on the release date must give notice to the EPA of the extent of 5
compliance with the release criteria on the release date.

(2) The notice must—
(a) identify all of the approved swap land that is each of the following:

(i) remainder land, being all the approved swap land that is qualify-
ing forest land on the release date, other than excess forest land: 10

(ii) non-forest land, being all the approved swap land that is not
qualifying forest land on the release date:

(iii) excess forest land, being any approved swap land that—
(A) is qualifying forest land on the release date; and
(B) does not need to be part of the remainder land in order for 15

the release criteria to be met; and
(C) the participants want to be excluded from the remainder

land; and
(b) include final forestry emissions returns under section 189BA for each

participant and activity— 20
(i) that covers each carbon accounting area that contains the

approved swap land (each a CAA3); and
(ii) that uses the release date as the relevant date; and

(c) include in that return a release date unit balance report under section
194JE that covers the following carbon accounting areas (each a 25
CAA4) formed from each CAA3:
(i) 1 or more remainder CAA4s for the remainder land in the

CAA3:
(ii) a non-forest CAA4 for any non-forest land in the CAA3:
(iii) 1 or more excess CAA4s for any excess forest land in the CAA3; 30

and
(d) include any information prescribed in regulations under section

194LA.
(3) Land is qualifying forest land if—

(a) each hectare of land has forest species on it that have, or are likely to 35
have, tree crown cover of more than 30%; and

(b) those forest species were established by direct planting activities, includ-
ing direct seeding but excluding natural forest regeneration; and

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(c) each individual parcel of the forest land is at least 1 hectare and has an
average width of at least 30 metres; and

(d) the land has not been declared not to be qualifying forest land under
section 194KA(2).

(4) The notice must— 5
(a) be made jointly by the participants in respect of all of the approved swap

land for the CAA1; and
(b) be signed by all of the applicants; and
(c) be given within 60 working days after the release date; and
(d) be given— 10

(i) in the prescribed manner and format; and
(ii) together with the prescribed fee (if any); and
(iii) together with the prescribed information (if any).

(5) In relation to a final forestry emissions return required by subsection (2)(b),
sections 189BA to 189DA apply as if— 15
(a) the references in those sections to CAA1 were references to CAA3; and
(b) the references in those sections to CAA2 were references to CAA4.

194JC Liability to surrender units if release criteria not met
(1) This section applies in relation to the CAA3s for a CAA1 if the release criteria

under either or both of paragraphs (a) and (b) of section 194JA(1) are not 20
met.

(2) The participants for the CAA3 are liable to surrender the number of New Zea-
land units determined under subsections (4) to (6).

(3) That liability is apportioned between the CAA3s under section 194JD.
Liability for area insufficiency 25

(4) If section 194JA(1)(a) is not met, the number of units to be surrendered (sa)
is calculated as follows:

sa = [ (c − d) ÷ c ] × u
where—
c is the area of CAA1 on the swap application date (reduced under section 30

194JA(3) if applicable) (in hectares)
d is the total area of all of the remainder land for the CAA1 (in hectares)
u is the unit balance of the CAA1 in the emissions return that accompanied

the application under section 194GA.
Liability for carbon insufficiency 35

(5) If section 194JA(1)(b) is not met, the number of units to be surrendered (sc)
is calculated as follows:

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sc = (e − f)
where—
e is the reference carbon stock for the CAA1 (reduced under section

194JA(3) if applicable) (in tonnes)
f is the total expected carbon stock of all of the remainder land for the 5

CAA1 (in tonnes).
Total liability

(6) The total liability under this section (t) is calculated as follows:
t = sa + sc

194JD Maximum liability and apportionment 10
(1) This section applies if the participants for the CAA3s for a CAA1 have a liabil-

ity under section 194JC.
One CAA3

(2) If there is only one CAA3,—
(a) section 190 applies; and 15
(b) the liability for that CAA3 is equal to t under section 194JC(6).
Two or more CAA3s: maximum liability

(3) If there are 2 or more CAA3s,—
(a) section 190 does not apply; but
(b) if the total liability calculated under section 194JC(6) (t) is greater 20

than the total of the unit balances of all of the CAA3s, t is reduced to be
equal to that total unit balance.

Two or more CAA3s: apportionment
(4) If there are 2 or more CAA3s, the liability for each CAA3 (k) is calculated as

follows: 25
k = t × (a3 ÷ b3)

where—
t is the total liability under section 194JC(6), reduced under subsec-

tion (3) if applicable
a3 is the area of the CAA3 (in hectares) 30
b3 is the total area of all of the CAA3s (in hectares).

194JE Release date unit balance report
(1) A release date unit balance report required by section 194JB(2)(c) must—

(a) specify the CAA4s that the report covers and, for each CAA4 whose
boundaries are not the same as a CAA3, define the CAA4; and 35

(b) specify the CAA3s (whose land will form the CAA4s); and

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(c) specify the opening unit balance of each non-forest CAA4 and each
excess CAA4 (if any) as zero; and

(d) set out the calculation under subsection (2) of the opening unit balance
of each remainder CAA4.

(2) The opening unit balance of a remainder CAA4 (v) is calculated as follows: 5
v = (u − k) × (a4 ÷ b4)

where—
u is the unit balance of the CAA3 in the emissions return under section

194JB(2)(b)

k is,— 10
(a) if there is only one CAA4, zero; or
(b) if there are 2 or more CAA4s, the liability of the CAA3 under

section 194JD

a4 is the area of the remainder CAA4 (in hectares)
b4 is the total area of all of the remainder land for the CAA1 (in hectares). 15

194JF Effect on release date
(1) This section applies if notice is given to the EPA in accordance with section

194JB, including a final forestry emissions return (for the CAA3s) and release
date unit balance report (for the CAA4s).

(2) Starting on the release date,— 20
(a) the emissions return for the CAA3s is treated as being submitted (so that

the total liability or entitlement has effect, and the unit balance is
updated, for the CAA3s under section 189DA); and

(b) the participants are not liable to surrender the unit balances of each
CAA3 (although they may be liable to surrender units under section 25
194JC); and

(c) for each remainder CAA4,—
(i) the person who was the participant in respect of the CAA3 from

which it was formed is the participant in respect of the remainder
CAA4 (instead of the CAA3); and 30

(ii) the land in the remainder CAA4 is released from being approved
swap land; and

(iii) the unit balance of each remainder CAA4 is the opening unit bal-
ance calculated for it in the release date unit balance report; and

(d) for each non-forest CAA4,— 35
(i) the person who was the participant in respect of the CAA3 from

which it was formed ceases to be a participant in respect of the
non-forest CAA4; and

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(ii) the land in the non-forest CAA4 ceases to be approved swap land;
and

(iii) the unit balance of each non-forest CAA4 is zero; and
(e) for each excess CAA4,—

(i) the person who was the participant in respect of the CAA3 from 5
which it was formed is the participant in respect of the excess
CAA4; and

(ii) the land in the excess CAA4 ceases to be approved swap land; and
(iii) the unit balance of each non-forest CAA4 is zero.

(3) The EPA must amend the register kept under section 57, and the records of car- 10
bon accounting areas kept under section 188(2), to record the effects of this
section.

(4) After the release date, section 179(1) (except section 179(1)(a)) applies to the
remainder land as if it had been cleared on the swap application date.

(5) Subsection (4) ceases to apply when that land is next cleared (after which 15
section 179 will apply).

Carbon equivalent forest land swaps: action if original criteria not met

194KA EPA may take action if original criteria not met
(1) This section applies if the EPA—

(a) approved an application for a carbon equivalent forest land swap; but 20
(b) is now satisfied that the application should not have been approved

because any of the approved swap land did not meet the criteria in sec-
tion 194GB(2)(c) or (e) or any applicable criteria prescribed for sec-
tion 194GB(2)(h).

Action on or before release date 25
(2) If this section applies to land on or before the release date, the EPA may

declare the land that did not meet the criteria not to be qualifying forest land
for the purposes of section 194JB.
Action after release date

(3) If this section applies to land after the release date, the EPA may declare the 30
whole of the carbon accounting area that now contains the land that did not
meet the criteria to not be approved swap land.
Procedure

(4) The EPA cannot make a declaration under this section more than 7 years after
the swap application date. 35

(5) Before making a declaration, the EPA must—

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(a) notify the participant of its intention to do so and the grounds for doing
so; and

(b) give them at least 60 working days to—
(i) show cause why the EPA should not do so; or
(ii) take other remedial action specified in the notice. 5

(6) If the EPA makes a declaration under this section, it must give the participant
notice of—
(a) the declaration and the date on which it was made; and
(b) the participant’s liability under section 194KB; and
(c) the participant’s right under section 144 to seek a review of the decision 10

to make the declaration.

194KB Effect of declaration after release date
(1) This section applies if the EPA makes a declaration under section 194KA(3)

that a carbon accounting area is not approved swap land (the CAA).
(2) Starting on the date on which the declaration is made,— 15

(a) the land ceases to be approved swap land; and
(b) the person ceases to be a participant in the activity on the CAA; and
(c) the person is liable to surrender the number of New Zealand units equal

to the unit balance of the CAA.
(3) The EPA must amend the register kept under section 57, and the records of car- 20

bon accounting areas kept under section 188(2), to record the effects of this
section.

194KC Remedial action: land substitution
(1) In a notice under section 194KA(5), the EPA may give the participant the

option to take remedial action by substituting other land for land that did not 25
meet the criteria (the non-compliant land).

(2) A participant given that option may apply to the EPA to do so.
(3) The application must—

(a) specify the carbon accounting areas (each a CAA5) that include the non-
compliant land for which other land is to be substituted; and 30

(b) identify all the land in each CAA5 as either—
(i) removed land, being the non-compliant land for which other land

is to be substituted; or
(ii) remaining land, being all the land in the CAA5 that is not

removed land; and 35
(c) identify the land that is proposed to be substituted for the removed land

(substitute land); and

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(d) include a final forestry emissions return prepared under section 189BA
for the relevant activity—
(i) that covers the CAA5s; and
(ii) that uses the date on which the application is submitted to the EPA

as the relevant date; and 5
(e) include in that return a new unit balance report that—

(i) relates to the following carbon accounting areas (each a CAA6):
(A) a removed CAA6 for the removed land:
(B) a remaining CAA6 for the remaining land:
(C) a substitute CAA6 for the substitute land; and 10

(ii) specifies the opening unit balance of the removed CAA6 as zero;
and

(iii) calculates the opening unit balance for the remaining CAA6s and
substitute CAA6s in accordance with section 189EA(5); and

(iv) is otherwise prepared under section 189EA; and 15
(f) include any information prescribed in the regulations under section

194LA.
(4) The notice must—

(a) be signed by the participant; and
(b) be given within the period specified in the notice under section 20

194KA(5); and
(c) be given—

(i) in the prescribed manner and format; and
(ii) together with the prescribed fee (if any); and
(iii) together with the prescribed information (if any). 25

(5) In relation to the final forestry emissions return and new unit balance report
required by subsection (3)(d) and (e), sections 189BA to 189EA apply
as if—
(a) the references in those sections to CAA1 were references to CAA5; and
(b) the references in those sections to CAA2 were references to CAA6. 30

194KD Criteria for land substitution
(1) If a person submits an application under section 194KC to substitute land, the

EPA,—
(a) if satisfied that the criteria in subsection (2) are met, must approve the

application; or 35
(b) otherwise, may decline the application.

(2) The criteria are that—

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(a) the substitute land is land of a kind specified in 1 or more of subpara-
graphs (i) to (iv) of section 194GB(2)(c); and

(b) the area of the substitute land is equal to or greater than the area of the
removed land; and

(c) the EPA is satisfied that,— 5
(i) if the substitution date is before the release date, the release cri-

teria are likely to be met in respect of the CAA1 and the new
approved swap land; or

(ii) if the substitution date is on or after the release date, the expected
carbon stock of the new approved swap land as at the substitution 10
date was equal to or greater than the reference carbon stock of the
CAA1; and

(d) any other criteria prescribed in regulations made under section 194LA
are met.

(3) In this section,— 15
new approved swap land means all of the land that will be approved swap
land for the CAA1 if the application is approved
substitution date means the date on which the application under section
194KC was submitted.

194KE Effect of land substitution 20
(1) This section applies if the EPA approves an application under section 194KD.
(2) Starting on the date on which the application was submitted,—

(a) the emissions return for the CAA5s is treated as being submitted (so that
the total liability or entitlement has effect, and the unit balance is
updated, for the CAA5s under section 189DA); and 25

(b) if any of the land in a substitute CAA6 is already in a carbon accounting
area, the participant for that land is liable to surrender the number of
New Zealand units equal to the unit balance of that carbon accounting
area; and

(c) in respect of the remainder CAA6s and substitute CAA6s,— 30
(i) the person becomes a participant in the activity on those CAA6s

(instead of the CAA5s); and
(ii) the unit balance of each of those CAA6s is the opening unit bal-

ance calculated for it in the new unit balance report; and
(iii) the land in those CAA6s is approved swap land for the original 35

CAA1 (together with any approved swap land for the CAA1 that
was not included in this application); and

(d) in respect of each removed CAA6,—

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(i) the person ceases to be a participant in the activity of the removed
CAA6; and

(ii) the land ceases to be approved swap land; and
(iii) the person is not liable to surrender units (because the unit balance

is zero). 5
(3) The EPA must amend the register kept under section 57, and the records of car-

bon accounting areas kept under section 188(2), to record the effects of this
section.

(4) To avoid doubt, the substitution of land under this section does not affect the
release date for the CAA1. 10

Regulations

194LA Regulations for averaging
(1) The Governor-General may, by Order in Council made on the recommendation

of the Minister, make regulations for 1 or more of the following purposes:
(a) prescribing— 15

(i) how emissions and removals from an activity of standard forestry
on a carbon accounting area (averaging) must be calculated and
reported:

(ii) the circumstances in which a participant is or is not liable to sur-
render units, or entitled to receive New Zealand units, for those 20
emissions and removals:

(iii) the methodology for determining the number of units the partici-
pant is entitled to receive or liable to surrender in those circum-
stances:

(b) providing that a participant for a carbon accounting area (averaging) is 25
not required to—
(i) calculate emissions and removals for which they are not liable to

surrender, or entitled to receive, units:
(ii) submit emissions returns for a carbon accounting area (averaging)

in relation to which they are not liable to surrender, or entitled to 30
receive, units:

(c) prescribing the methodology for determining—
(i) determined carbon stock (section 194FA):
(ii) nominal average carbon stock (section 194FA):
(iii) reference carbon stock (section 194GA): 35
(iv) expected carbon stock (section 194JA(2)):

(d) for the purposes the definition of first rotation forest (section
194FD),—

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(i) prescribing the stand-down period:
(ii) declaring land to have a first rotation forest or a subsequent rota-

tion forest:
(e) prescribing the information to be included in, and other requirements

for,— 5
(i) applications for a carbon equivalent forest land swap (section

194GA):
(ii) notices of compliance with release criteria (section 194JB):
(iii) applications to substitute land under (section 194KC):

(f) prescribing time periods for re-using removed offsetting forest land or 10
excess forest land (section 194GB(2)(c)(iii) and (iv)):

(g) prescribing additional criteria for the approval of—
(i) a land swap application (section 194GB(2)(h)):
(ii) a land substitution application (section 194KD(2)(d)):

(h) prescribing additional release criteria (section 194JA(1)(c)): 15
(i) prescribing the period for the purposes of the definition of expected car-

bon stock (section 194JA(2)):
General

(j) providing for any other matters contemplated by this subpart, necessary
for its administration, or necessary for giving it full effect. 20

(2) Regulations made under this section may make different provision for different
cases on any differential basis, including—
(a) for different forest species:
(b) for forest species of different ages:
(c) for different rotation periods: 25
(d) for different parts of New Zealand.

(3) Regulations made under this section may have retrospective effect as follows:
(a) a regulation may apply from the commencement of the mandatory emis-

sions return period in which the regulation is made or from a later date in
that period: 30

(b) a regulation made under subsection (1)(d)(i) may prescribe a stand-
down period that begins before the regulation is made.

(4) Regulations made under this section may require the use of a computer pro-
gramme available via the Internet site of the EPA.

(5) Regulations made under subsection (1)(b) may relate to emissions or remov- 35
als that—
(a) stem directly from an activity; or

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(b) are associated with a product or other thing that is the subject of an
activity.

(6) See also sections 166 (procedure) and 169 to 175 (incorporation by reference).

Subpart 6—Temporary adverse events

194MA Interpretation for subpart 6 5
(1) In this subpart,—

adverse event, in relation to temporary adverse event land, means the event
referred to in section 194NA(1)(b) as a result of which the land became tem-
porary adverse event land
affected land has the meaning given in section 194NA(1) 10
carbon recovery has the meaning given in section 194RA
event date, in relation to an adverse event, means the later of,—
(a) if the event occurs—

(i) on only 1 day, that day; or
(ii) over 2 or more days, the first of those days (even if land in a par- 15

ticular carbon accounting area is not affected until the second or a
later day of the event); or

(b) if the event occurs in circumstances specified in regulations made under
section 194TA, the date provided for in the regulations

non-established land has the meaning given in section 194QB 20
permanently affected land has the meaning given in section 194QB
pre-event carbon stock rate for temporary adverse event land from a CAA1,
means the average carbon stock per hectare of the affected land in the CAA1
on the day before the event date, determined in accordance with regulations
made under section 194TA, unless subsection (2) applies 25
re-established land has the meaning given in section 194QB
re-establishment has the meaning given in section 194QA
re-establishment date, in relation to an adverse event, means the later of—
(a) the date 4 years after the event date; or
(b) in circumstances specified in regulations made under section 194TA, 30

the date provided for in the regulations
temporary adverse event land means land that has become temporary adverse
event land under section 194NC(2)(e) and has not ceased to be so under a
provision referred to in section 194PA.

(2) For the definition of pre-event carbon stock rate,— 35
(a) if land that is temporary adverse event land in relation to an adverse

event (event 1) becomes temporary adverse event land in relation to a

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later adverse event (event 2), the pre-event carbon stock rate for the land
in relation to event 2 is the same as the pre-event carbon stock rate it had
in relation to event 1; and

(b) if approved swap land becomes temporary adverse event land, the pre-
event carbon stock rate for the land is the reference carbon stock (under 5
section 194GA) per hectare of the CAA1 for which the land is
approved swap land.

Application

194NA Application for temporary adverse event suspension
(1) Post-1989 forest land is affected land if— 10

(a) the land is in a carbon accounting area (a CAA1)—
(i) that is a carbon accounting area (averaging); or
(ii) for which a person is a participant in an activity of permanent for-

estry; and
(b) the land is affected by an event of a kind prescribed in regulations made 15

under section 194TA (the adverse event); and
(c) the event results in each hectare of land ceasing to have forest species on

it that have, or are likely to have, tree crown cover of more than 30%;
and

(d) the area of affected land in each CAA1 is equal to or greater than any 20
minimum prescribed in regulations made under section 194TA; and

(e) the extent of carbon stock lost from each CAA1 is equal to or greater
than any minimum prescribed in regulations made under section
194TA.

(2) A participant in an activity of standard forestry or permanent forestry on a 25
CAA1 may apply for a temporary adverse event suspension for the affected
land in that CAA1.

(3) The application must—
(a) specify the CAA1s to which the application relates; and
(b) include a final forestry emissions return prepared under section 189BA 30

for the activity—
(i) that covers the CAA1s; and
(ii) that uses the day before the event date as the relevant date; and

(c) include in that return a new unit balance report prepared under section
189EA for the activity that covers the following carbon accounting areas 35
(CAA2s) formed from each CAA1:
(i) an affected CAA2 for the affected land in the CAA1:
(ii) a remainder CAA2 for the rest of the land in the CAA1; and

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(d) include—
(i) the pre-event carbon stock rate for the affected land; and
(ii) any other information prescribed in regulations made under sec-

tion 194TA.
(4) The application must— 5

(a) be signed by the participant; and
(b) be submitted by the deadline prescribed in regulations made under sec-

tion 194TA; and
(c) be submitted—

(i) in the prescribed manner and format; and 10
(ii) together with the prescribed fee (if any); and
(iii) together with the prescribed information (if any).

194NB Criteria of temporary adverse event suspension
(1) If a person submits an application under section 194NA for a temporary

adverse event suspension, the EPA,— 15
(a) if satisfied that the criteria in subsection (2) are met, must approve the

application; or
(b) otherwise, may decline the application.

(2) The criteria are that—
(a) the land in the affected CAA2s is affected land; and 20
(b) the participant notified the EPA of the occurrence of the adverse event in

accordance with the regulations made under section 194TA; and
(c) the EPA is satisfied that the land in the affected CAA2s—

(i) is likely to achieve re-establishment under section 194QA; and
(ii) is likely to achieve carbon recovery under section 194RA; and 25

(d) any other criteria prescribed in regulations made under section 194TA
are met.

194NC Approval of temporary adverse event suspension
(1) This section applies if the EPA approves an application for a temporary adverse

event suspension under section 194NB. 30
(2) Starting on the day before the event date,—

(a) the emissions return for the CAA1s is treated as being submitted (so that
the total liability or entitlement has effect, and the unit balance is
updated, for the CAA1s under section 189DA); and

(b) the person is a participant in the activity on the CAA2s (instead of the 35
CAA1s); and

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(c) the person is not liable to surrender the unit balance of each CAA1; and
(d) the unit balance of each CAA2 is the opening unit balance calculated for

it in the new unit balance report; and
(e) the land in the affected CAA2s formed from a CAA1 is the temporary

adverse event land from that CAA1 in relation to the adverse event. 5
(3) The approval of land as temporary adverse event land is subject to any condi-

tions prescribed in regulations made under section 194TA.
(4) The EPA must amend the register kept under section 57, and the records of car-

bon accounting areas kept under section 188(2), to record the effects of this
section. 10

Temporary adverse event land

194PA Duration of temporary adverse event land status
(1) Land that becomes temporary adverse event land under section 194NC(2)(e)

remains temporary adverse event land until one of the following occurs:
(a) the land achieves carbon recovery and is released from being temporary 15

adverse event land under section 194RB:
(b) the person ceases to be a participant because of section 188AB (for a

natural event that permanently prevents re-establishing a forest), whether
as a result of the adverse event or a different event:

(c) the land is affected by another event and becomes temporary adverse 20
event land under section 194NC(2)(e) in relation to that later event:

(d) the land is non-established land and ceases to be temporary adverse
event land under section 194QC(2)(d):

(e) the land is permanently affected land and ceases to be temporary adverse
event land under section 194QC(2)(e): 25

(f) the land ceases to be temporary adverse event land under section
194SA because of a breach of condition:

(g) the land ceases to be temporary adverse event land under section
194SB because of deforestation or early clearing.

(2) To avoid doubt, the land continues to be temporary adverse event land even if 30
the carbon accounting areas containing the land—
(a) are reconfigured (whether under section 194CC or by any other

process that requires the submission of a new unit balance report); or
(b) change activity from standard forestry to permanent forestry or vice

versa. 35

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194PB Effect of being temporary adverse event land
All of the provisions of this Act that apply to post-1989 forest land continue to
apply to temporary adverse event land as if it remained forest land, subject to
sections 194PC to 194PF.

194PC No liability or entitlement 5
(1) A participant in respect of temporary adverse event land is not liable to surren-

der units, or entitled to receive New Zealand units, for emissions and removals
for the land (including emissions resulting from the adverse event).

(2) However, subsection (1) is subject to sections 194DF and 194DG, and
the participant is liable to surrender units under those sections if they apply. 10

(3) If provided in regulations made under section 194TA, the participant is not
required to—
(a) calculate emissions and removal for which they are not liable to surren-

der, or entitled to receive, units; or
(b) submit emissions returns covering a carbon accounting area in relation to 15

which they are not liable to surrender, or entitled to receive, units.

194PD First rotation forest
(1) If temporary adverse event land is in carbon accounting area (averaging), and

on the day before the event date the land had a first rotation forest, then the
land is to be treated as continuing to have a first rotation forest. 20

(2) Subsection (1) continues to apply in relation to re-established land until it is
first cleared after the re-establishment date (even though it ceases to be tempor-
ary adverse event land on the re-establishment date).

(3) To avoid doubt, when subsection (1) ceases to apply to land, section
194FD applies. 25

194PE Reconfiguration restrictions
(1) A carbon accounting area containing temporary adverse event land cannot be

reconfigured (whether by application under section 194CA or by any other
process that requires the submission of a new unit balance report) except as
permitted by subsection (2). 30

(2) Reconfiguration is permitted—
(a) to reconfigure the carbon accounting areas that contain the temporary

adverse event land from the same CAA1 without including any other
land:

(b) to remove land that is affected by a natural event that permanently pre- 35
vents re-establishing a forest in accordance with sections 188AB and
191BA (whether that is the adverse event or a different event):

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(c) to remove land that becomes temporary adverse event land in relation to
a different event:

(d) on the re-establishment date as required under section 194QB:
(e) to remove land that has ceased to be temporary adverse event land when

section 194SC(5) applies. 5

194PF Damage to land turns out to be permanent
(1) If the adverse event was a natural event and it becomes apparent that it perman-

ently prevents the re-establishing of a forest on the land,—
(a) if that becomes apparent before the re-establishment date, the participant

may notify the EPA under section 188AB (then see section 10
194PA(1)(b)); or

(b) if that is apparent at the re-establishment date and the participant has not
notified the EPA under section 188AB, the participant must identify
the land as permanently affected land under section 194QB (then see
section 194QC(2)(e)); or 15

(c) if that becomes apparent after the re-establishment date, the participant
may notify the EPA under section 188AB (then see section
194PA(1)(b)).

(2) To avoid doubt, if approved swap land is affected by another event that per-
manently prevents re-establishing a forest on that land, the participant may 20
comply with section 188AB in relation to that event.

Re-establishment

194QA Re-establishment criteria
A hectare of temporary adverse event land achieves re-establishment if, on the
re-establishment date, the hectare has forest species on it that have, or are 25
likely to have, tree crown cover of more than 30%.

194QB Notice of achievement of re-establishment
(1) A participant in an activity of standard forestry or permanent forestry on 1 or

more carbon accounting areas that contain temporary adverse event land from a
CAA1 (each a CAA3) must give notice to the EPA of the extent to which the 30
temporary adverse event land has achieved re-establishment.

(2) The notice must,—
(a) for each CAA3, identify all of the land in the CAA3 that is each of the

following:
(i) re-established land, being all of the land in the CAA3 that, on the 35

re-establishment date, has achieved re-establishment:

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(ii) non-established land, being all of the land in the CAA3 that, on
the re-establishment date, has not achieved re-establishment and is
not permanently affected land:

(iii) if the adverse event was a natural event, permanently affected
land, being all of the land in the CAA3— 5
(A) that, on the re-establishment date, has not achieved re-

establishment; and
(B) on which the adverse event has permanently prevented re-

establishing a forest; and
(b) include a final forestry emissions return under section 189BA for the 10

activity—
(i) that covers each CAA3; and
(ii) that uses the re-establishment date as the relevant date; and

(c) include in that return a new unit balance report under section 189EA
that covers the following carbon accounting areas (each a CAA4) 15
formed from each CAA3:
(i) 1 or more re-established CAA4s for any re-established land in

the CAA3:
(ii) a non-established CAA4 for any non-established land in the

CAA3: 20
(iii) a permanently affected CAA4 for any permanently affected land

in the CAA3; and
(d) include any information prescribed in the regulations under section

194TA.
(3) The notice must— 25

(a) be signed by the participant; and
(b) be given within 60 working days after the re-establishment date; and
(c) be given—

(i) in the prescribed manner and format; and
(ii) together with the prescribed fee (if any); and 30
(iii) together with the prescribed information (if any).

(4) In relation to the final forestry emissions return and new unit balance report
required by subsection (2)(b) and (c), sections 189BA to 189EA apply
as if—
(a) the references in those sections to CAA1 were references to CAA3; and 35
(b) the references in those sections to CAA2 were references to CAA4.

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194QC Effect on re-establishment date
(1) This section applies if a person gives the EPA a notice in accordance with sec-

tion 194QB, including a final forestry emissions return (for the CAA3s) and
new unit balance report (for the CAA4s).

(2) Starting on the re-establishment date,— 5
(a) the emissions return for the CAA3s is treated as being submitted (so that

the total liability or entitlement has effect, and the unit balance is
updated, for the CAA3s under section 189DA); and

(b) the person is not liable to surrender the unit balance of each CAA3; and
(c) for each re-established CAA4,— 10

(i) the person is the participant in respect of the re-established CAA4
(instead of the CAA3); and

(ii) the land in the re-established CAA4 remains temporary adverse
event land; and

(iii) the unit balance of the re-established CAA4 is the opening unit 15
balance calculated for it in the new unit balance report; and

(d) for each non-established CAA4,—
(i) the person is a participant in respect of the non-established CAA4;

and
(ii) the land in the non-established CAA4 ceases to be temporary 20

adverse event land; and
(iii) the unit balance of the non-established CAA4 is the opening unit

balance calculated for it in the new unit balance report; and
(iv) section 194SC applies to the land; and

(e) for each permanently affected CAA4,— 25
(i) the person ceases to be a participant in respect of the permanently

affected CAA4; and
(ii) the land in the permanently affected CAA4 ceases to be temporary

adverse event land; and
(iii) the person is not liable to surrender the unit balance of each per- 30

manently affected CAA4.
(3) The EPA must amend the register kept under section 57, and the records of car-

bon accounting areas kept under section 188(2), to record the effects of this
section.

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Carbon recovery

194RA Carbon recovery criteria
A hectare of temporary adverse event land achieves carbon recovery when the
carbon stock of the hectare (determined in accordance with regulations made
under section 194TA) is equal to the pre-event carbon stock rate. 5

194RB Notice when land achieves carbon recovery
(1) When temporary adverse event land achieves carbon recovery, the participant

in respect of the land must give notice to the EPA that the land has achieved
carbon recovery.

(2) The notice must— 10
(a) be signed by the participant; and
(b) be given when the next emissions return that covers the land is submit-

ted; and
(c) be given—

(i) in the prescribed manner and format; and 15
(ii) together with the prescribed fee (if any); and
(iii) together with the prescribed information (if any).

(3) If a participant gives the EPA notice in accordance with this section, the land is
taken to have recovered and is released from being temporary adverse event
land with effect from when carbon recovery was achieved. 20

Ceasing to be temporary adverse event land before recovery

194SA Cancellation for breach of conditions
(1) If the EPA is satisfied that a condition applying under section 194NC(3) has

not been met in respect of temporary adverse event land in a carbon accounting
area, the EPA may cancel the approval in respect of all of the land in the carbon 25
accounting area.

(2) If the approval is cancelled,—
(a) the land ceases to be temporary adverse event land; and
(b) section 194SC applies to the land.
Procedure 30

(3) Before cancelling an approval, the EPA must—
(a) notify the participant of its intention to do so and the grounds for doing

so; and
(b) give them at least 60 working days to—

(i) rectify the non-compliance; or 35
(ii) show cause why the EPA should not cancel the approval.

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(4) If the EPA cancels an approval, it must give the participant notice of—
(a) its decision and the reasons for it; and
(b) the date on which the cancellation occurred; and
(c) the person’s right to seek a review of the decision under section 144.

194SB Other circumstances causing land to cease to be temporary adverse event 5
land
Intentional conversion to non-forest land

(1) Temporary adverse event land is intentionally converted if the participant—
(a) takes any action that is inconsistent with the land achieving re-establish-

ment; or 10
(b) otherwise takes any action for the purpose of converting the land to land

that is not forest land.
(2) If temporary adverse event land is intentionally converted,—

(a) the land ceases to be temporary adverse event land; and
(b) the land is to be treated as deforested (despite section 179A); and 15
(c) the reversion date for section 194SC is the date on which the first

action referred to in subsection (1)(a) or (b) occurred.
Re-established land cleared before carbon recovery

(3) If re-established land is cleared after its re-establishment date but before it
achieves carbon recovery,— 20
(a) the land ceases to be temporary adverse event land; and
(b) the land is to be treated as deforested; and
(c) the reversion date for section 194SC is the date the clearing com-

menced.
Re-established land treated as deforested 25

(4) If re-established land becomes land that is to be treated as deforested under
section 179(1)(b) or (c) before it achieves carbon recovery,—
(a) the land ceases to be temporary adverse event land; and
(b) the reversion date for section 194SC is the 10 or 20 year date under

section 179. 30

194SC Consequences if land ceases to be temporary adverse event land
(1) This section applies to the following land:

(a) non-established land that ceases to be temporary adverse event land
under section 194QC(2)(d), for which the reversion date is the re-
establishment date: 35

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(b) land in a carbon accounting area in respect of which the approval is can-
celled under section 194SA, for which the reversion date is the date
of the cancellation:

(c) land that ceases to be temporary adverse event land under section
194SB, for which the reversion date is the date specified in that sec- 5
tion.

Act reapplies
(2) Starting on the reversion date, the provisions of the Act apply to the land as if

the land had never become temporary adverse event land.
Liability or entitlement 10

(3) As a result, the participant must include all the emissions and removals for the
land on and after the event date (including as a result of the adverse event) in
the next emissions return the participant is required to submit.

(4) For that purpose,—
(a) all of those emissions and removals are to be treated as having occurred 15

on the re-establishment date; but
(b) the emissions resulting from the adverse event are to be determined by

reference to the pre-event carbon stock rate for the land.
Reconfiguration

(5) Section 194PE(2)(e) applies to a reconfiguration if— 20
(a) the land to which this section applies is only part of a carbon accounting

area; and
(b) as a result of subsection (2), the participant is required to reconfigure

that carbon accounting area to remove that land.

Permanent forestry 25
(6) If the activity on the land is permanent forestry, see also section 194ED(2).

Regulations

194TA Regulations for temporary adverse events
(1) The Governor-General may, by Order in Council made on the recommendation

of the Minister, make regulations for 1 or more of the following purposes: 30
(a) prescribing circumstances and dates for the definitions of event date and

re-establishment date in section 194MA:
(b) prescribing the methodology for determining:

(i) pre-event carbon stock rate (section 194MA):
(ii) carbon stock loss (section 194NA): 35
(iii) carbon stock for the purpose of determining carbon recovery

(section 194RA):

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195



(c) prescribing the kinds of events that are adverse events (section
194NA):

(d) prescribing—
(i) minimum affected area (section 194NA(1)(d)):
(ii) minimum carbon stock loss (section 194NA(1)(e)): 5

(e) prescribing other information to be included in, the submission date for,
and other requirements for applications made under section 194NA:

(f) prescribing notification requirements and other criteria for approval
under section 194NB:

(g) prescribing conditions for section 194NC(3): 10
(h) providing that a participant for temporary adverse event land is not

required to—
(i) calculate emissions and removals for which they are not liable to

surrender, or entitled to receive, units:
(ii) submit emissions returns covering a carbon accounting area in 15

relation to which they are not liable to surrender, or entitled to
receive, units (section 194PC(3)):

(i) prescribing other information to be included in, and other requirements
for, notices under section 194QB:

(j) providing for any other matters contemplated by this subpart, necessary 20
for its administration, or necessary for giving it full effect.

(2) Regulations under this section may make different provision for different cases
on any differential basis.

(3) Regulations made under this section may require the use of a computer pro-
gramme available via the Internet site of the EPA. 25

(4) Regulations made under subsection (1)(g) may relate to emissions or remov-
als that—
(a) stem directly from an activity; or
(b) are associated with a product or other thing that is the subject of an

activity. 30
(5) See also sections 166 (procedure) and 169 to 175 (incorporation by reference).

180 New sections 194UA to 194UC and cross-headings inserted
Before section 195, insert:

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Input returns may be submitted before actual emissions returns

194UA Input returns may be submitted for certain emissions returns for
forestry activities

(1) This section applies before a person submits an emissions return (for a forestry
activity) of a type specified in the regulations. 5

(2) The person may first submit, for the activity and 1 or more of the areas or car-
bon accounting areas covered by the emissions return, an input return that con-
tains the data or information required by the regulations.

(3) The input return must be submitted by—
(a) the deadline specified in the regulations; or 10
(b) any extended deadline granted by the EPA under the regulations.

(4) In this section, regulations means regulations made under section 194UC.

194UB EPA may do calculations based on input return
(1) This section applies if the EPA receives an input return in accordance with

section 194UA. 15
(2) As soon as practicable after receipt, the EPA must—

(a) calculate for each area or carbon accounting area covered by the input
return, as required for the relevant emissions return,—
(i) the participant’s emissions and removals; and
(ii) the participant’s liability to surrender units for their emissions or 20

entitlement to receive New Zealand units for their removals; and
(b) give a notice to the participant that includes—

(i) the calculations and the calculated amounts; and
(ii) the data, information, or other matters on which the calculations

were are based; and 25
(iii) a statement that the participant may choose to include the calcula-

tions and the calculated amounts in the relevant emissions return;
and

(iv) a statement about the effect of subsection (3).
(3) The EPA is not liable for anything that results from its calculations under this 30

section, and the EPA’s calculations or notice do no and notice do not affect any
obligation of the participant under this Act (such as the obligation to submit an
accurate emissions return).

194UC Regulations for input returns
(1) The Governor-General may, by Order in Council made on the recommendation 35

of the Minister, make regulations for 1 or more of the following purposes:

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197



(a) specifying the 1 or more types of emissions return for a forestry activity
for which input returns may be submitted, which may be specified by
reference to 1 or more of the following:
(i) the type of forestry activity:
(ii) any feature of the forest or land to which the activity relates: 5
(iii) any other matter:

(b) specifying the data or information that must be contained in any input
return or the input return for each type of emissions return:

(c) specifying the deadline for submitting the input return for each type of
emissions return, which must be a reasonable period before the deadline 10
for submitting the emissions return:

(d) providing for how, and for how long, the EPA may extend a deadline for
submitting the input return for any emissions return or for each type of
emissions return:

(e) authorising the EPA to issue guidelines or standards by notice in the 15
Gazette in relation to the matters specified under paragraphs (b) to
(d).

(2) Before recommending the making of regulations under this section, the Minis-
ter must consult, or be satisfied that the chief executive has consulted, the per-
sons (or representatives of those persons) that appear to the Minister or the 20
chief executive likely to be substantially affected by the regulations.

(3) The process for consultation must include—
(a) giving adequate and appropriate notice of the proposed terms of the rec-

ommendation, and of the reasons for it; and
(b) the provision of a reasonable opportunity for interested persons to con- 25

sider the recommendation and make submissions; and
(c) adequate and appropriate consideration of submissions.

(4) A failure to comply with this section does not affect the validity of regulations
made under it.

(2) See sections 3A and 3B for consultation requirements that apply to the making 30
of the regulations.

(5) Any guidelines or standards issued by the EPA under regulations made under
subsection (1)(e) are a disallowable instrument, but not a legislative instru-
ment, for the purposes of the Legislation Act 2012 and must be presented to the
House of Representatives under section 41 of that Act. 35

(6) A person who has complied with guidelines or standards issued by the EPA
under regulations made under subsection (1)(e) is, in the absence of proof to
the contrary, presumed to have complied with the relevant requirements speci-
fied in regulations corresponding to those guidelines or standards.

Part 1 cl 180
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Notification of status of forest land

181 Section 195 amended (Notification of status of forest land)
(1) In section 195(1), replace “pre-1990 forest land, pre-1990 offsetting forest

land, or post-1989 forest land in respect of which a person has registered as a
participant under section 57, or that the EPA has declared to be exempt land” 5
with “a type of land described by subsection (1A)”.

(2) After section 195(1), insert:
(1A) The types of land are—

(a) the following types of land in respect of which a person is registered as a
participant: 10
(i) pre-1990 forest land:
(ii) pre-1990 offsetting forest land:
(iii) post-1989 forest land:

(b) the following types of post-1989 forest land:
(i) approved swap land (as defined by section 194FA): 15
(ii) temporary adverse event land:
(iii) land for which a person is registered as a participant in permanent

forestry:
(c) land that the EPA has declared to be exempt land.

182 Sections 196 and 197 and cross-heading replaced 20
Replace sections 196 and 197 and the cross-heading above section 196 with:

Forestry classifications of land

196A Meaning of forestry classification
In this Act, forestry classification means 1 or more classifications of an area
of land that— 25
(a) classifies the area by whether or how—

(i) a definition or matter in the Act that relates to forestry applies to
the area; or

(ii) the area is eligible to have a definition or matter in the Act apply
to it if certain requirements are satisfied; and 30

(b) is given—
(i) by the EPA under section 196B (initial classification), 196D

(change of classification to correct error), 196E (change of classi-
fication to update for changes), or 144 (review of classification);
or 35

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199



(ii) by the decision of the District Court or High Court under section
145 or 146.

Examples
If specified by regulations, an area of land might be classified as—
• pre-1990 forest land: 5
• post-1989 forest land:
• land that is eligible to become post-1989 forest land (if it becomes forest

land):
• pre-1990 offsetting forest land:
• land that has been deforested, or deforested on specified dates: 10
• land that is eligible to be declared exempt land under section 184 (because

of tree weeds):
• post-1989 forest land for which a participant is registered for standard for-

estry that is or is not a carbon accounting area (averaging):
• post-1989 forest land for which a participant is registered for permanent for- 15

estry:
• land that was forest land on 31 December 1989:
• exempt land:
• pre-1990 forest land to which the pre-1990 forest land allocation plan

applies: 20
• something else.

196B EPA may give forestry classifications to areas of land
The EPA may give 1 or more forestry classifications to an area of land in
accordance with regulations made under section 196G.

196C Effect of forestry classifications 25
(1) The forestry classification of an area of land is conclusive evidence of how the

relevant definition or matter in the Act applies to the area.
(2) The EPA must apply this Act to the area in accordance with the forestry classi-

fication.
(3) If a person’s application, notice, emissions return, or other document under this 30

Act specifies the forestry classification of an area of land, the document—
(a) need not include any information that is covered by the forestry classifi-

cation; but
(b) for a forestry classification that an area of land is eligible for something

if certain requirements are satisfied, must include information about 35
whether the requirements are satisfied.

(4) The EPA, or any person carrying out its powers, duties, or functions,—

Part 1 cl 182
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(a) does not warrant that any forestry classification is correct and not based
on, or affected by, something that is incorrect or that has materially
changed; and

(b) is not liable for anything that results from a forestry classification being
incorrect or based on, or affected by, something that is incorrect or that 5
has materially changed.

196D Change of forestry classification to correct error
(1) The EPA may change the forestry classification of an area of land to correct

any error that the EPA is satisfied is contained in the classification, including
where the classification was based on incorrect information. 10

(2) The EPA must make the change in accordance with regulations made under
section 196G.

196E Change of forestry classification to update for changes
(1) The EPA may change the forestry classification of an area of land if—

(a) there is a material change in any of the information or facts on which the 15
classification is based; or

(b) there is a material change to this Act, or to any regulations made under
this Act, that affects the classification.

(2) The EPA must make the change in accordance with regulations made under
section 196G. 20

196F Forestry classification with effect before date classification given
(1) This section applies if a forestry classification has effect before the date on

which the classification is given, whether—
(a) by the EPA under section 196B, 196D, or 196E or on review under

section 144; or 25
(b) by the decision of a court on appeal under section 145 or 146.

(2) The forestry classification must be ignored in respect of the period before the
date of the decision—
(a) to the extent that it would increase the number of units that a person is

required to surrender, or decrease the number of New Zealand units that 30
a person is entitled to receive, in respect of that period; and

(b) in respect of any other matter specified by regulations made under sec-
tion 196G.

(3) In all other respects, the forestry classification must be applied to that period.
(4) To avoid doubt, where the forestry classification is ignored under subsection 35

(2), the earlier forestry classification (if any) applies instead.

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196G Regulations for forestry classifications
(1) The Governor-General may, by Order in Council made on the recommendation

of the Minister, make regulations for 1 or more of the following purposes:
(a) specifying the forestry classifications that the EPA may give to areas of

land: 5
(b) prescribing 1 or more methods or processes by which the EPA may give

a new or changed forestry classification to an area, and those methods or
processes—
(i) may or may not provide for a person to apply for a classification;

and 10
(ii) may prescribe the fees or charges payable by an applicant for a

classification to enable the recovery of all or part of the direct and
indirect costs of the EPA in—
(A) receiving and processing the application; and
(B) considering, granting, or declining the application; and 15

(iii) must require the EPA to first consult the persons that the regula-
tions specify are likely to be substantially affected by the classifi-
cation, unless the only persons likely to be substantially affected
have applied for, or agreed to, the classification:

(c) providing for when a forestry classification comes into effect, which 20
may, for example,—
(i) subject to section 196F, be before the date of the decision if the

classification is changed under section 196D or 196E, on
review by the EPA under section 144, or on appeal to the court
under section 145 or 146: 25

(ii) differ for different forestry classifications or circumstances, such
as whether a person is responsible for a material change described
in section 196E(1)(a):

(d) specifying matters for the purposes of section 196F(2)(b) (in respect
of which a forestry classification is ignored for the period before the date 30
of the decision):

(e) providing for the publication of the following in 1 or more notices,
instruments, maps, or tools, which may be electronic:
(i) any decision to give a forestry classification to an area of land:
(ii) the current forestry classifications of all areas of land, and any 35

related matters.
(2) Examples of the costs that may be recovered under regulations made under

subsection (1)(b)(ii) include (but are not limited to)—
(a) the costs of providing, operating, and maintaining systems, databases,

and other processes in connection with the application: 40

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(b) the costs of services provided by third parties.
(3) Section 167(4) also applies to regulations made under subsection (1)(b)(ii).
(4) See sections 3A and 3B for consultation requirements that apply to the making

of regulations under this section.
(5) Regulations made under this section come into force 3 months after the date of 5

their notification in the Gazette, or on any later date specified in the regula-
tions.

Grant-funded forests

197 Entitlement to units for removals from grant-funded forests
A participant in an activity of standard forestry or permanent forestry on a car- 10
bon accounting area is not entitled to receive New Zealand units for removals
that—
(a) are attributable to forest species in relation to which the participant has

received a grant from the Crown under a grant scheme relating to for-
estry that is prescribed in regulations made under section 197A (a 15
grant-funded forest); and

(b) occur during the stand-down period for that forest prescribed in regula-
tion made under section 197A.

197A Regulations for grant-funded forests
(1) The Governor-General may, by Order in Council made on the recommendation 20

of the Minister, make regulations for 1 or more of the following purposes:
(a) prescribing Crown grant schemes relating to forestry:
(b) prescribing stand-down periods for grant-funded forests:
(c) prescribing methodologies for attributing removals to grant-funded for-

ests: 25
(d) providing for any other matters contemplated by section 197, neces-

sary for its administration, or necessary for giving it full effect.
(2) Regulations made under this section may make different provision for different

cases on any differential basis, including—
(a) for different grant schemes: 30
(b) for different periods of time:
(c) for different forest species:
(d) for different parts of New Zealand.

(3) Regulations made under this section may require the use of a computer pro-
gramme available via the Internet site of the EPA. 35

(4) Regulations made under subsection (1)(c) may relate to emissions or remov-
als that—

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203



(a) stem directly from the activity; or
(b) are associated with a product or other thing that is the subject of the

activity.

183 Section 198 amended (Registration as participant by purchasers of
obligation fuel) 5
Replace section 198(2) and (3) with:

(2) If the EPA registers a person as a participant under section 57 in respect of an
activity listed in Part 3 of Schedule 4, the registration takes effect 12 months
after the date of the notice issued under section 57(6).

(3) If the EPA has received an application under section 58 for removal of a per- 10
son’s name from the register as a participant in respect of an activity listed in
Part 3 of Schedule 4, the EPA must remove, under section 58(4), the appli-
cant’s name from the register on the date that is 48 months after the notice
issued under section 58(3)(b).

(4) The participant who is registered, or removed from registration, under this sec- 15
tion must give notice of that matter, and the date that it took or takes effect, to
every person who is registered under section 56 in respect of an activity in Part
2 of Schedule 3.

(5) The notice must be given in writing or electronically as soon as practicable
after the participant receives the EPA’s notice about, or becomes aware of, the 20
matter.

(6) The EPA must provide the participant with any address that it has recorded for
each person who must be notified.

184 Section 202 amended (Activities added to Part 2 of Schedule 3)
(1) In section 202(2), replace “that an Order in Council be made” with “recom- 25

mend the making of an Order in Council”.
(2) In section 202(2)(b)(ii), replace “New Zealand’s international obligations” with

“international climate change obligations”.

185 Section 209 amended (Registration as participant by purchasers of coal or
natural gas) 30
Replace section 209(2) to (4) with:

(2) If the EPA registers a person as a participant under section 57 in respect of an
activity listed in Part 4 of Schedule 4, the registration takes effect 12 months
from the date of the notice issued under section 57(6).

(3) If the EPA has received an application under section 58 for removal of a per- 35
son’s name from the register as a participant in respect of an activity listed in
Part 4 of Schedule 4, the EPA must remove, under section 58(4), the appli-
cant’s name from the register on the date that is 48 months after the date of the
notice issued under section 58(3)(b).

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(4) The participant who is registered, or removed from registration, under this sec-
tion in respect of an activity must give notice of that matter, and the date that it
took or takes effect, to every person who—
(a) mines—

(i) coal, if the activity is purchasing coal; or 5
(ii) natural gas, if the activity is purchasing natural gas; and

(b) is registered under section 56.
(5) The notice must be given in writing or electronically as soon as practicable

after the participant receives the EPA’s notice about, or becomes aware of, the
matter. 10

(6) The EPA must provide the participant with any address that it has recorded for
each person who must be notified.

186 New section 211A inserted (Effect of stockpiling coal by coal importer or
miner)
After section 211, insert: 15

211A Effect of stockpiling coal by coal importer or miner
(1) This section applies to a person if—

(a) they are registered as a participant in an activity listed in Part 3 of
Schedule 3 of—
(i) importing coal; or 20
(ii) mining coal where the volume of coal mined exceeds 2,000

tonnes in a year; and
(b) any of the coal they imported or mined as a participant in that activity

has not been used or sold, gifted, or otherwise provided free of charge to
anyone else. 25

(2) If this section applies to a person,—
(a) the person must not notify the EPA under section 59(1) that they have

ceased, or will cease, to carry out the activity; and
(b) the EPA must not, under section 59(2), treat the person as having ceased

to carry out the activity; and 30
(c) the person remains a participant in the activity until their name is

removed, in accordance with this Act, from the register that is kept for
the purposes of section 57.

186A Section 213 amended (Participant in respect of subpart 4 of Part 5 of
Schedule 3) 35
In section 213(1)(b)(i) and (ii), replace “section 2A(9)” with “section
2A(5D)”.

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205



186B New sections 215 and 216 inserted
After section 214, insert:

215 Ministers to report on alternative pricing system for farm-level agriculture
emissions

(1) The Minister and the Minister of Agriculture must prepare a report that outlines 5
a system to put a price on emissions from agricultural activities (including, but
not limited to, the activities listed in Part 5 of Schedule 3) as an alternative to
the emissions trading scheme currently provided for in this Act.

(2) The report must be prepared and made publicly available by 31 December
2022. 10

(3) The report must discuss the following matters in relation to the emissions trad-
ing scheme and the alternative system outlined under subsection (1):
(a) how emissions from those activities would be priced and accounted for:
(b) whether other activities or participants would be included in the system:
(c) what methodologies would be used for calculating emissions and remov- 15

als:
(d) what assistance, if any, would be given to participants:
(e) how emissions of methane would be treated relative to other greenhouse

gases, including whether, how, and what types of removals would be
recognised: 20

(f) what information participants would need to provide and how that infor-
mation would be used, shared, or made publicly available:

(g) how participants and relevant industry groups would be engaged with in
designing, implementing, and operating the system:

(h) who would be responsible for administering the system: 25
(i) what amendments would need to be made to legislation to enable the

system to work.
(4) Before preparing the report, the Ministers must—

(a) request a report from the Climate Change Commission under section
5K about what assistance, if any, should be given to participants; and 30

(b) consider that advice.
(5) In this section, Minister of Agriculture means the Minister of the Crown who,

under the authority of a warrant or with the authority of the Prime Minister, is
responsible for the administration of the Commodity Levies Act 1990.

216 Regulations for voluntary reporting or surrender for animals–farmer or 35
fertiliser–farmer activity

(1) The Governor-General may, by Order in Council made on the recommendation
of the Minister, make regulations for 1 or more of the following purposes:

Part 1 cl 186B
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(a) providing for a process by which a person carrying out an activity
described by the fertiliser–farmer subpart or animals–farmer subpart (of
Part 5 of Schedule 3) may choose to be treated as a participant in the
activity described:

(b) providing that the person may choose to be treated in that way in respect 5
of 1 or both of—
(i) obligations to report under this Act on the emissions from the

activity:
(ii) obligations to surrender units under this Act for the emissions

from the activity: 10
(c) providing for the following participants in corresponding processor

activities to be notified:
(i) a participant in a fertiliser–processor activity that corresponds to a

fertiliser–farmer activity for which a participant has become sub-
ject to obligations to surrender under this Act: 15

(ii) a participant in an animals–processor activity that corresponds to
an animals–farmer activity for which a participant has become
subject to obligations to surrender under this Act:

(d) if regulations are made under paragraph (b)(ii), providing for a process
by which a participant in a corresponding processor activity— 20
(i) ceases to be subject to obligations to surrender under this Act in

respect of that activity, or becomes subject to such obligations as
varied to ensure that only 1 person is liable to surrender units in
respect of the corresponding processor activities or the activities
to which they correspond; and 25

(ii) ceases to be entitled to allocations in respect of the activities for
which they are no longer liable to surrender units.

(2) Before recommending the making of the regulations, the Minister must consult
the Minister of Agriculture.

(3) See section 3B for consultation requirements that apply to the making of the 30
regulations.

187 Section 217 amended (Transitional provision for penalties)
(1) Repeal section 217(1)(a) to (c) and (2)(a).
(2) In section 217(2)(b)(ii), replace “an excess emissions penalty under section

134(2)(b)(ii) or 134A(2)(b)” with “a penalty under section 134, 134A, or 35
134C”.

(3) In section 217(2)(c), replace “section 134, 134A, or 136” with “section 134”.

187 Section 217 amended (Transitional provision for penalties)
(1) Replace section 217(1) with:

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207



(1) This section applies in respect of the first year in which a participant is required
to surrender units for emissions in respect of an activity listed in subpart 2 or 4
of Part 5 of Schedule 3.

(1A) Subsection (2) applies—
(a) to the participant if they submit an annual emissions return that relates to 5

that first year; and
(b) in respect of the units that the participant is required to surrender in

respect of the activity.
(2) Repeal section 217(2)(a).

188 Section 218 amended (Transitional provision for voluntary reporting) 10
(1) Replace section 218(1) with:
(1) This section applies to a person who carries out an activity listed in subpart 2

of Part 5 of Schedule 3 in the year commencing on a date appointed by Order
in Council made under section 2A(8) section 2A(5B) (to the extent the order
applies to persons carrying out an activity listed in those subparts that subpart) 15
on and after which the relevant that subpart applies to the person.

(2) Repeal section 218(2)(a).
(3) In section 218(2)(ab), delete “, if the person carries out an activity specified in

subsection (1)(a)(iv) during the relevant period,”.
(4) In section 218(2)(b), delete “, if the person has notified the EPA that the person 20

carries out an activity in subsection (1)(a), or is a person to whom subsection
(1)(b) applies,”.

(5) In section 218(2)(b), delete “66 or”.

189 Section 219 amended (Transitional provision for mandatory reporting by
certain participants) 25

(1) Replace section 219(1) with:
(1) This section applies to a person who carries out an activity listed in any of the

following:
(a) subpart 1 or 3 of Part 5 of Schedule 3 in the period—

(i) beginning on 1 January 2012; and 30
(ii) ending on the date that surrender obligations for agriculture start:

(b) subpart 2 of Part 5 of Schedule 3 in the year following the year com-
mencing on a date appointed by Order in Council made under section
2A(8) (to the extent the order applies to persons carrying out an activity
listed in those subparts) on and after which the relevant subpart applies 35
to the person:

(c) subpart 4 of Part 5 of Schedule 3 in the 2024 calendar year.
(2) Repeal section 219(3) to (5).

Part 1 cl 188
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190 Sections 220 to 222 repealed
Repeal sections 220 to 222.

190 Sections 219 to 222 replaced
Replace sections 219 to 222 with:

219 Transitional provision for surrender obligations of certain participants 5
(1) This section applies to a person who carries out the following in the specified

period (the excluded period):
(a) a fertiliser–processor activity in the period starting on 1 January 2011

and ending on—
(i) 31 December 2024, if by that date no earlier date has been appoin- 10

ted; or
(ii) an earlier date appointed by an Order in Council made under sub-

section (3); or
(b) a fertiliser–farmer activity in the first year in which the fertiliser–farmer

subpart applies to persons, or the class of persons, carrying out that 15
activity (starting on a date appointed by an Order in Council made under
section 2A(5B)); or

(c) an animals–processor activity in the period starting on 1 January 2011
and ending on—
(i) 31 December 2024, if by that date no earlier date has been appoin- 20

ted; or
(ii) an earlier date appointed by an Order in Council made under sub-

section (3); or
(d) an animals–farmer activity in the first year in which the animals–farmer

subpart applies to persons, or the class of persons, carrying out that 25
activity (starting on 1 January 2024 or a later date appointed by an Order
in Council made under section 2A(5D)).

(2) Even if the person’s emissions return reports emissions for the excluded period,
the person is not liable under this Act to surrender units for those emissions.

(3) The Governor-General may, by Order in Council made on the recommendation 30
of the Minister, appoint a date for the purpose of subsection (1)(a)(ii) or
(c)(ii) (the earlier date).

(4) Before recommending the making of an order appointing an earlier date, the
Minister must—
(a) consult with the Minister of Agriculture (as defined in section 215); 35

and
(b) consider the report provided by the Climate Change Commission under

section 220; and

Climate Change Response (Emissions Trading Reform)
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209



(c) be satisfied that progress of the kind referred to in section 220(b) has
been insufficient.

(5) In recommending the making of an order appointing an earlier date, the Minis-
ter must not recommend a date that is before 1 July 2022.

220 Commission to report on progress towards meeting farm-level obligations 5
The Commission must, not later than 30 June 2022, provide written advice to
the Minister on—
(a) the progress that has been made towards meeting the primary sector cli-

mate change commitments set out in Schedule 5; and
(b) the progress that has been made towards participants in an activity listed 10

in subpart 4 of Part 5 of Schedule 3 being ready to start complying with
reporting and surrender obligations under this Act in respect of that
activity; and

(c) any barriers to those participants being ready to start complying with
those obligations; and 15

(d) what further steps (if any) are required by the primary sector or the Gov-
ernment for those participants to be ready to start complying with those
obligations.

191 Section 222H amended (Transitional provision for unincorporated bodies)
Repeal section 222H(3) to (5). 20

192 Section 233 amended (Rate of synthetic greenhouse gas levy)
(1) In section 233(1), formula, replace the definition of variable B with:

B is the lesser of $25 and the price of carbon specified by or under regula-
tions made under section 30W

(2) Repeal section 233(4) to (6). 25

192 Section 233 amended (Rate of synthetic greenhouse gas levy)
(1) Replace section 233(5) with:
(5) Regulations made under subsection (4)(a)—

(a) must be made in accordance with the consultation requirements in sec-
tion 3B; and 30

(b) come into force 3 months after the date of their notification in the Gaz-
ette, or on any later date specified in the regulations.

(2) In section 233(6), replace “making a recommendation under subsection (4)”
with “recommending the making of the regulations”.

193 Sections 234 and 236 repealed 35
Repeal sections 234 and 236.

Part 1 cl 191
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193 Section 234 repealed (Transitional provision for synthetic greenhouse gas
levy)
Repeal section 234.

193A Section 236 amended (Maximum price of carbon for purpose of levy
calculation) 5
In section 236(3), replace “the Minister may make a recommendation” with
“recommending the making of an Order in Council”.

194 Section 243 amended (Circumstances where levy may be refunded)
In section 243(1)(b), replace “greenhouse gas emissions” with “emissions”.

194A Section 244 amended (Exemptions from payment of synthetic greenhouse 10
gas levy)
Replace section 244(6) with:

(6) See sections 3A and 3B for consultation requirements that apply to the making
or revocation of an order under this section.

194B Section 245 amended (Regulations specifying levy rates) 15
Replace section 245(4) with:

(4) Regulations made under subsection (1) come into force 3 months after the date
of their notification in the Gazette, or on any later date specified in the regula-
tions.

195 Section 246 amended (Regulations relating to synthetic greenhouse gas 20
levy)
In section 246(2), replace “New Zealand’s international obligations” with
“international climate change obligations”.

195 Section 246 amended (Regulations relating to synthetic greenhouse gas
levy) 25
Replace section 246(2) and (3) with:

(2) Before recommending the making of regulations under subsection (1)(a), the
Minister must have regard to international climate change obligations relating
to synthetic greenhouse gases.

(3) See sections 3A and 3B for consultation requirements that apply to the making 30
of regulations under subsection (1)(a) to (e).

(4) Regulations made under subsection (1)(a) to (e) come into force 3 months after
the date of their notification in the Gazette, or on any later date specified in the
regulations.

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211



196 Section 247 amended (Process for making orders and regulations)
In section 247(1) and (3), replace “section 233(4)(a), 246(1)(a) to (e), or” with
“section 246(1)(a) to (e) or”.

196 Section 247 repealed (Process for making orders and regulations)
Repeal section 247. 5

197 Section 249 amended (Application of section 88 (Directions to EPA))
In section 249, replace “Part 5” with “the ETS participant provisions”.

198 Section 252 amended (Enforcement officers)
In section 252, replace “under Part 4 in relation to this Part” with “under this
Part (which relate to verification and inquiry about compliance with this Part)”. 10

199 Section 257 amended (Power of entry for investigation, warrants, etc)
In section 257, replace “Part 5” with “the ETS participant provisions”.

200 Section 258 amended (Regulations relating to verifiers)
In section 258(3), replace “New Zealand’s international obligations” with
“international climate change obligations”. 15

200 Section 258 amended (Regulations relating to verifiers)
Replace section 258(3) with:

(3) Before recommending the making of regulations under subsection (1)(a), the
Minister must have regard to international climate change obligations in
respect of the collection of data and information relating to specified synthetic 20
greenhouse gases.

(4) See sections 3A and 3B for consultation requirements that apply to the making
of regulations under this section.

200A Section 269 amended (Review of operation and effectiveness of levy)
Replace section 269(4)(b) with: 25
(b) make the report of the panel publicly available; and

201 Section 270 amended (Appointment and conduct of independent panel)
Replace section 270(1)(c)(ii) with:

(ii) international climate change obligations and any other relevant
international agreement; and 30

202 New Schedule 1AA inserted
Before Schedule 1, insert the Schedule 1AA set out in Schedule 1 of this
Act.

Part 1 cl 196
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202 Schedule 1AA amended
In Schedule 1AA, after clause 3, insert:

Part 2
Provisions relating to Climate Change Response (Emissions Trading

Reform) Amendment Act 2019 5

4 Interpretation
In this Part,—
amendment Act means the Climate Change Response (Emissions Trading
Reform) Amendment Act 2019
third mandatory emissions return period means the 5-year period starting on 10
1 January 2018 and ending on 31 December 2022.

Subpart 1—Provisions that commence on day after Royal assent

5 Satisfying requirements for making regulations
(1) This clause applies to any requirement for the making of any regulations under

this Act as amended by the amendment Act. 15
(2) Anything done before the commencement of this clause satisfies the require-

ment as long as it would have satisfied the requirement if it had been done after
the commencement.

6 New regulations may commence on or after commencement of clause
Any regulations made under this Act before the commencement of this clause 20
may come into force on, or at any time after, that commencement, despite any-
thing in this Act that prevents them from coming into force within a certain
period after the date of their notification in the Gazette.

7 Making first regulations about limits and price controls for units
(1) If regulations are to be made under section 30GB before there is an emissions 25

budget, section 30GC(2)(a) applies as if it instead referred to any provisional
budget for the emission of greenhouse gases that is set by the Crown.

(2) When an emissions budget is first set,—
(a) the Minister must recommend the making of regulations under section

30GB to prescribe new limits or price control settings as required to 30
comply with section 30GC(2); and

(b) the Minister may recommend prescribing a new limit or price control
settings for 1 or both of the 2 calendar years after the year in which the
amendment is made, despite section 30GB(5).

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213



8 Existing accounts continue
If any account established in the Registry (under section 7(1)(a), for example)
existed immediately before the commencement of this clause, it continues to
exist after the commencement.

9 Information accessible by search of unit register 5
If section 27 applies to information immediately before its amendment by the
amendment Act, it continues to apply in accordance with that section as if it
were not amended.

10 Information to be published by EPA
(1) For a reporting year beginning before 1 January 2023, the EPA is not required 10

to publish the information required under section 89(1)(e) in respect of an
activity or the information required under section 89(1)(i) if the EPA is satis-
fied that publishing the information would result in the disclosure of a partici-
pant’s individual emissions or an eligible person’s own allocation, unless—
(a) the participant or eligible person to whom the information relates has 15

consented to the publication of the information; or
(b) the information is already in the public domain.

(2) Section 89A does not apply in respect of an emissions return for emissions or
removals before 1 January 2020, unless—
(a) the return also relates to a period after 1 January 2020; and 20
(b) it is possible for emissions or removals occurring before 1 January 2020

to be excluded from the published information.
(3) Section 89A—

(a) applies in respect of emissions returns submitted under section 189, 191,
or 193 for emissions or removals on or after 1 January 2020; but 25

(b) does not apply in respect of any other emissions returns in relation to
post-1989 forest land during a mandatory emissions returns period com-
mencing before 1 January 2023.

11 Members of existing consolidated groups jointly and severally liable
(1) The joint and several liability to which each member of a consolidated group 30

has agreed, immediately before the commencement of this clause, is treated as
if it were joint and several liability for any obligations under the ETS partici-
pant provisions in respect of emissions and removals resulting from, or alloca-
tions, penalties, or interest relating to, the relevant activities.

(2) The transfer of units to the consolidated group’s holding account (on behalf of 35
the group) to which each member of a consolidated group has agreed, immedi-
ately before the commencement of this clause, is treated as if it included the
transfer of any units to which a member becomes entitled by an allocation
relating to a relevant eligible activity.

Part 1 cl 202
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12 Consolidated group for activity relating to forestry
(1) In this clause, an existing forestry consolidated group means a consolidated

group that—
(a) was formed in respect of an activity or activities listed in Part 1 or 1A of

Schedule 3 or Part 1 of Schedule 4; and 5
(b) exists immediately before the commencement of this clause.

(2) Sections 150 and 151A do not apply to an existing forestry consolidated group
(so that no members or activities may be added to the group).

(3) The nominated entity of an existing forestry consolidated group—
(a) may submit a single emissions return under section 189(3) in respect of 10

1 or more of the activities listed in Part 1 of Schedule 4 carried out by a
member of the group in a year; and

(b) must submit any emissions return required under a provision of Part 5
on behalf of any member of the group when the member is required to
do so; and 15

(c) must sign any emissions return submitted by the nominated entity in
accordance with section 65(2)(f) on behalf of the group.

(4) In relation to an existing forestry consolidated group, section 153(2) to (4)
applies to the liability to surrender units or entitlement to be transferred units in
relation to an emissions return referred to in subclause (2) as if the references 20
in that section to a year were references to the period covered by the emissions
return.

(5) To avoid doubt, only the nominated entity for an existing forestry consolidated
group may submit an emissions return for the group.

203 New Schedule 2A inserted 25
After Schedule 2, insert the Schedule 2A set out in Schedule 2 of this Act.

204 Schedule 3 amended
(1) In Schedule 3, Part 1, replace “the 5-year period commencing on 1 January

2008, or in any subsequent 5-year period after that” with “any mandatory emis-
sions return period”. 30

(2) In Schedule 3, Part 2, delete “, subject to sections 218 and 219,”.
(2A) In Schedule 3, Part 3, subpart 1, replace the item “Mining coal where the vol-

ume of coal mined exceeds 2 000 tonnes in a year” with:
Satisfying 1 or both of the following in respect of a year (mining coal):
(a) mining more than 2 000 tonnes of coal in the year (direct coal mining): 35
(b) owning at least 2 000 tonnes of coal, from the person’s direct coal min-

ing, at the start of the year, and where the year is immediately after (coal
stockpiling)—

Climate Change Response (Emissions Trading Reform)
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215



(i) a year of direct coal mining; or
(ii) 1 or more consecutive years of owning at least 2 000 tonnes of

coal (from the person’s direct coal mining) at the start of the year,
after an initial year of direct coal mining.

(2B) In Schedule 3, Part 3, subpart 1, after the final item, insert: 5

Example
A person mines 2 500 tonnes of coal in 2022, which is “direct coal mining” and
therefore “mining coal” in 2022. They stop direct coal mining, but still own (from
their mining) 2 250 tonnes of coal at the start of 2023 and 2 000 tonnes at the start
of 2024, which is “coal stockpiling” and therefore “mining coal” in 2023 and 2024 10
(under paragraph (b)(i) and (ii) of that term, respectively).

(3) In Schedule 3, subpart 2 of Part 4, delete “, subject to sections 218 and 219,”.
(4) In Schedule 3, subpart 1 of Part 5, replace “(applies, subject to sections 218

and 219, on and after 1 January 2011 unless subpart 2 brought into force)”
with “(reporting obligations apply from 1 January 2011; surrender obligations 15
apply from 1 January 2025)(applies on and after 1 January 2011, but is subject
to section 219)”.

(5) In Schedule 3, subpart 2 of Part 5, replace “(applies, subject to sections 218
and 219, from 1 January 2011, if determined by Order in Council)” with
“(reporting and surrender obligations apply from a date to be determined by 20
Order in Council)(applies on and after a date appointed by Order in Council,
but is subject to sections 218 and 219)”.

(6) In Schedule 3, subpart 3 of Part 5, replace “(applies, subject to sections 218
and 219, on and after 1 January 2011 unless subpart 4 brought into force)”
with “(reporting obligations apply from 1 January 2011)(applies on and after 25
1 January 2011, but is subject to section 219)”.

(7) In Schedule 3, subpart 4 of Part 5, replace “(applies, subject to sections 218
and 219, from 1 January 2011, if determined by Order in Council)” with
“(reporting obligations apply from 1 January 2024; surrender obligations
apply from 1 January 2025)(applies on and after 1 January 2024 or a later 30
date appointed by Order in Council, but is subject to section 219)”.

(8) In Schedule 3, Part 6, delete “, subject to sections 218 and 219,”.

205 Schedule 4 amended
(1) In Schedule 4, replace Part 1 with:

Part 1 cl 205
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Part 1
Standard forestry removal activities

(applies on and after 1 January 2008)
Any of the following activities in respect of post-1989 forest land, having chosen this
Part (instead of Part 1A) to apply to the land: 5
(a) owning the land, other than post-1989 forest land that is subject to a forest sink

covenant registered under section 67ZD of the Forests Act 1949:
(b) holding a registered forestry right for the land or being the leaseholder under a

registered lease of the land, other than post-1989 forest land that is subject to a
forest sink covenant registered under section 67ZD of the Forests Act 1949: 10

(c) being a party to a Crown conservation contract in respect of the land.

Part 1A
Permanent forestry removal activities

(applies on and after the day after Royal assent for Climate Change Response
(Emissions Trading Reform) Amendment Act 2019) 15

Any of the activities specified in Part 1 in respect of post-1989 forest land, having
chosen this Part (instead of Part 1) to apply to the land.
(2) In Schedule 4, subpart 1 of Part 2, paragraph (c)(ii), replace “New Zealand’s

annual inventory report under the Convention or Protocol or any emissions
report from New Zealand under a successor international agreement” with “any 20
emissions report provided by New Zealand under its international climate
change obligations”.

(3) In Schedule 4, subpart 2 of Part 2, paragraph (b), replace “New Zealand’s
annual inventory report under the Convention or Protocol or any emissions
report from New Zealand under a successor international agreement” with “any 25
emissions report provided by New Zealand under its international climate
change obligations”.

(4) In Schedule 4, subpart 3 of Part 2, delete “, subject to sections 218, 219, and
220,”.

205A New Schedule 5 inserted 30
After Schedule 4, insert the Schedule 5 set out in Schedule 2A of this Act.

Subpart 2—Amendments that commence on 30 November 2020

206 Section 30G amended (Regulations relating to Part 2)
Replace section 30G(3) with:

Climate Change Response (Emissions Trading Reform)
Amendment Bill Part 1 cl 206

217



(3) Any regulation made under subsection (1)(b)(i) or (c) applies to only the fol-
lowing units:
(a) all units that are not held in an account in the Registry at the time that

the regulation comes into force; and
(b) approved overseas units that are issued before 1 January 2021 (the start 5

of the third commitment period).

207 Section 183A amended (Certain applications not otherwise permitted by
section 183)
In section 183A(2)(b), replace “New Zealand units” with “units”.

208 Section 186B amended (Criteria for approving offsetting forest land 10
applications)
In section 186B(3)(a)(i), delete “New Zealand”.

209 Section 186H amended (Treatment of allocations in respect of pre-1990
forest land that is offset)

(1) In section 186H(2)(b), replace “New Zealand units equivalent to the portion of 15
New Zealand” with “units equivalent to the portion of”.

(2) In section 186H(3)(a), (4), and (6), delete “New Zealand”.

209A Section 189 amended (Emissions returns for post-1989 forest land
activities)
In section 189(8)(b), delete “New Zealand”. 20

209B Section 191 amended (Ceasing to be registered as participant in respect of
post-1989 forest land)
Repeal section 191(1)(c) and (1A).

210 Section 189DA amended (Total liability or entitlement has effect, and unit
balance updated, when emissions return submitted) 25
In section 189DA(2)(b), delete “New Zealand”.

211 Section 191AB amended (Effect of ceasing participation for whole carbon
accounting areas)
In section 191AB(1)(b), delete “New Zealand”.

212 Section 191BB amended (Effect of ceasing participation for part carbon 30
accounting areas)

(1) In section 191BB(2)(c), delete “New Zealand”.
(2) In section 191BB(2)(f), delete “(as long as only New Zealand units are sur-

rendered for the liability in paragraph (c))”.

Part 1 cl 207
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213 Section 194AA amended (EPA may act if persons fail to give notice of
transmitted interest)
In section 194AA(4)(a) and (b), delete “New Zealand”.

214 Section 194DF amended (Liability to surrender units on transfer from
permanent forestry to standard forestry in carbon accounting area 5
(averaging))
In section 194DF(2), delete “New Zealand”.

215 Section 194DG amended (Liability to surrender units on transfer from
standard forestry in carbon accounting area (averaging) to permanent
forestry) 10
In section 194DG(2), delete “New Zealand”.

216 Section 194EL amended (Removal of carbon accounting area from
permanent forestry)
In section 194EL(2)(b), delete “New Zealand”.

217 Section 194FC amended (Averaging accounting applies to carbon 15
accounting areas (averaging))
In section 194FC(2)(a), replace “surrender New Zealand units” with “surren-
der units”.

218 Section 194GC amended (Effect of approval of application to swap land)
In section 194GC(2)(b), delete “New Zealand”. 20

219 Section 194JC amended (Liability to surrender units if release criteria not
met)
In section 194JC(2), delete “New Zealand”.

220 Section 194KB amended (Effect of declaration after release date)
In section 194KB(2)(c), delete “New Zealand”. 25

221 Section 194KE amended (Effect of land substitution)
In section 194KE(2)(b), delete “New Zealand”.

222 Schedule 1AA amended
(1) In Schedule 1AA, clause 12(3)(c)(i)(A), delete “New Zealand”.
(2) In Schedule 1AA, after clause 13, insert: 30

14 Cancellation of historic approved overseas units
(1) This clause applies to approved overseas units that were issued in the first com-

mitment period starting on 1 January 2008 and ending on 31 December 2012,

Climate Change Response (Emissions Trading Reform)
Amendment Bill Part 1 cl 222

219



other than those that are held by the Crown in a Crown holding account or an
account established under section 7.

(2) If any person holds any of the approved overseas units, the Registrar must
transfer the units to a cancellation account.

(3) The EPA must direct the Registrar to transfer a New Zealand unit from a 5
Crown holding account to a person’s holding account for each of that person’s
approved overseas units—
(a) that is a New Zealand assigned amount unit (as defined by regulation 3

of the Climate Change (Unit Register) Regulations 2008); and
(b) that the Registrar transfers to a cancellation account under this clause. 10

(4) No compensation is payable for any other units that the Registrar transfers to a
cancellation account under this clause.

(3) In Schedule 1AA, clause 26(2)(b), delete “New Zealand”.

222 Schedule 1AA amended
In Schedule 1AA, after clause 12, insert: 15

Subpart 2—Provisions that commence on 30 November 2020

13 Cancellation of historic approved overseas units
(1) This clause applies to approved overseas units that were issued in the first com-

mitment period starting on 1 January 2008 and ending on 31 December 2012,
other than those that are held by the Crown in a Crown holding account or an 20
account established under section 7.

(2) If any person holds any of the approved overseas units, the Registrar must
transfer the units to a cancellation account.

(3) The EPA must direct the Registrar to transfer a New Zealand unit from a
Crown holding account to a person’s holding account for each of that person’s 25
approved overseas units—
(a) that is a New Zealand assigned amount unit (as defined by regulation 3

of the Climate Change (Unit Register) Regulations 2008); and
(b) that the Registrar transfers to a cancellation account under this clause.

(4) No compensation is payable for any other units that the Registrar transfers to a 30
cancellation account under this clause.

Subpart 3—Amendment that commences on 31 December 2020

223 Section 89 amended (EPA to publish certain information)
Repeal section 89(1)(e) and (3).

Part 1 cl 222
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Subpart 3—Amendments that commence on 1 January 2021

222A Section 3A amended (Treaty of Waitangi (Te Tiriti o Waitangi))
After section 3A(a)(vi), insert:

(via) section 30W(1)(a) (price of carbon):

222B Section 3B amended (Consultation about certain regulations, orders, and 5
notices)

(1) After section 3B(1)(e), insert:
(ea) section 30W(1)(a) (price of carbon):

(2) Repeal section 3B(1)(s).

222C Section 4 amended (Interpretation) 10
In section 4(1), replace the definition of deforest with:
deforest, in relation to forest land,—
(a) means to convert forest land to land that is not forest land (see section

181, for example); and
(b) includes deforestation after forest land is cleared, where section 179 15

applies

222D New subpart 4 of Part 2 inserted
After section 30V, insert:

Subpart 4—Regulations setting price of carbon

30W Regulations setting price of carbon 20
(1) For the purpose of sections 134 to 134D and any other provisions that refer

to regulations made under this section, the Governor-General may, by Order in
Council made on the recommendation of the Minister, make regulations—
(a) prescribing the methodology for specifying the price of carbon; and
(b) specifying the price of carbon by applying the methodology. 25

(2) Before recommending the making of regulations, the Minister must take into
account—
(a) the price of the units used to calculate revenue from the emissions trad-

ing scheme in the Crown annual financial statements in the preceding 12
months; and 30

(b) the price of New Zealand units sold by auction in the preceding 12
months; and

(c) any changes to the operation of the emissions trading scheme that have
affected the price of the units surrendered under that scheme, or that may
do so before the end of the next levy year. 35

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221



(3) See sections 3A and 3B for consultation requirements that apply to the making
of regulations under subsection (1)(a).

(4) Regulations made under subsection (1)(a) come into force 3 months after the
date of their notification in the Gazette, or on any later date specified in the
regulations. 5

223 Section 89 amended (EPA to publish certain information)
(1) Repeal section 89(1)(e).
(2) After section 89(1), insert:
(1A) The EPA must, for each reporting year, publish information about—

(a) each qualifying penalty imposed in that reporting year; and 10
(b) each qualifying penalty imposed in a previous reporting year that has

any amount still owing at any time in that reporting year.
(1B) The information required for each of those penalties is—

(a) the name of the person on whom the penalty was imposed; and
(b) the section under which the penalty was imposed; and 15
(c) the amount of the penalty; and
(d) the date on which the last payment for the penalty was due and, if the

penalty has been paid in full, the date on which it was paid in full; and
(e) in the case of a penalty imposed under section 134, the provision

under which the person was liable to surrender or repay units; and 20
(f) in the case of a penalty imposed under sections 134A to 134D,

whether the penalty was imposed for behaviour that was grossly careless
or behaviour that was knowing.

(1C) In subsection (1A), qualifying penalty means—
(a) a penalty imposed under section 134; or 25
(b) a penalty imposed under sections 134A to 134D, if the EPA is satis-

fied that the penalty was imposed for behaviour that was grossly careless
or knowing.

(3) In section 89(2)(a) and (b), replace “subsection (1)” with “subsections (1) to
(1B)”. 30

(4) Repeal section 89(4).

223A Section 120 amended (Amendment to emissions returns by EPA)
After section 120(2), insert:

(3) If the EPA proposes to amend a person’s emissions return, the EPA must notify
the person of that proposal as soon as practicable. 35

(4) If the EPA then becomes satisfied that the information contained in the emis-
sions return was correct,—

Part 1 cl 223
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(a) the EPA must notify the person of that fact and of the effects of para-
graph (b); and

(b) section 123 applies as if the EPA had assessed the matters in the emis-
sions return under section 121.

223B Section 123 amended (Effect of amendment or assessment) 5
In section 123(2), replace “section 134(3)(b)” with “section 134A or 134C”.

223C Section 129 amended (Offences in relation to failure to comply with
various provisions)
In section 129(1)(a), replace “(requirement to collect data or other information,
calculate emissions and removals, and keep records)” with “(other than by sub- 10
mitting an emissions return containing incorrect calculations)”.

223D Section 132 amended (Other offences)
In section 132(1)(c), replace “(requirement to collect data or other information,
calculate emissions and removals, and keep records)” with “(other than by sub-
mitting an emissions return containing incorrect calculations)”. 15

223E Sections 134 to 136 replaced
Replace sections 134 to 136 with:

134 Penalty for failing to surrender or repay units by due date
(1) This section applies if a person fails, by the due date,—

(a) to surrender units that the person is required to surrender; or 20
(b) to repay units that the person is required to repay.

(2) The person must (in addition to surrendering or repaying the units) pay to the
EPA a penalty calculated as follows:

3 × a × b
where— 25
a is the number of units that the person failed to surrender or repay by the

due date
b is the price, in dollars, of carbon per tonne on the due date, as set by or

in accordance with regulations made under section 30W.
(3) The EPA must give a notice to the person that— 30

(a) refers to the person’s failure to surrender or repay units by the due date
and the provision under which the person is liable to surrender or repay
the units; and

(b) refers to any relevant notice that the EPA has given the person in respect
of the requirement to surrender or repay the units (for example, a notice 35
given under section 123(1)); and

Climate Change Response (Emissions Trading Reform)
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223



(c) specifies the number of units that the person must surrender or repay;
and

(d) specifies the amount of the penalty that the person must pay under this
section; and

(e) advises that the person may request to enter into a deferred payment 5
arrangement under section 135A; and

(f) advises that, unless the units are surrendered or repaid and the penalty is
paid in full within 20 working days after the notice is given, interest on
the amount of the penalty will accrue in accordance with section 137.

(4) If the EPA notifies a person that the EPA proposes to amend the person’s emis- 10
sions return under section 120, the EPA must reverse any penalty charged
under this section that relates to the original return.

(5) In this section, due date means the final date by which the person was required
to surrender or repay the units.

134A Penalty for failing to submit emissions return by due date 15
(1) This section applies if—

(a) a person fails to submit an emissions return by the due date; and
(b) the EPA is satisfied that the person has not taken reasonable care; and
(c) the EPA gives a notice to the person stating that—

(i) the person has failed to submit the emissions return by the due 20
date; and

(ii) if the person does not submit the return within 20 working days
after the notice is given, the EPA will make an assessment under
section 121 and a penalty may apply; and

(d) the person fails to submit the emissions return within 20 working days 25
after the notice is given.

(2) If the emissions return is for an activity listed in Part 1 of Schedule 4 (for
post-1989 forestry), the person has either—
(a) emissions equal to the carbon dioxide equivalent tonnes of emissions,

less removals (if any), assessed for the return to the extent they match a 30
net liability to surrender or repay units; or

(b) removals equal to the carbon dioxide equivalent tonnes of removals, less
emissions (if any), assessed for the return to the extent they match a net
entitlement to receive or be reimbursed units.

(3) If the emissions return is for any other activity, the person has either— 35
(a) emissions equal to the carbon dioxide equivalent tonnes of emissions

assessed for the return; or
(b) removals equal to carbon dioxide equivalent tonnes of removals

assessed for the return.

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(4) If the person has—
(a) emissions, they must pay to the EPA the penalty calculated under sub-

section (5):
(b) removals, they must pay to the EPA the penalty calculated under sub-

section (5), but the maximum penalty is $1,000: 5
(c) neither emissions nor removals, no penalty is payable.

(5) The calculation is—
a × b × c

where—
a is the person’s emissions or removals in tonnes (whichever applies) 10
b is the price, in dollars, of carbon per tonne on the due date, as set by or

in accordance with regulations made under section 30W
c is the culpability factor determined under subsection (6).

(6) The culpability factor for a person is the greatest culpability factor that the EPA
is satisfied applies under this table: 15

Person’s level of culpability

Did person voluntarily
disclose failure or error to
EPA before being informed
of it by EPA?

Culpability
factor

Person did not take reasonable care Yes 0.1
No 0.2

Person was grossly careless Yes 0.2
No 0.4

Person knowingly failed Yes 1.0
No 1.0

Notice of penalty
(7) If the person must pay a penalty, the EPA must give a notice to the person

that—
(a) refers to the person’s failure to submit the emissions return by the due

date and the provision under which the person is required to submit the 20
return; and

(b) refers to the notice issued under subsection (1)(c); and
(c) specifies the amount of the penalty that the person must pay under this

section; and
(d) advises that the person may request to enter into a deferred payment 25

arrangement under section 135A; and
(e) advises that, unless the penalty is paid in full within 20 working days

after the notice is given, interest on the amount of the penalty will accrue
in accordance with section 137.

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Meaning of due date
(8) In this section, due date—

(a) means the final date by which the person—
(i) was originally required to submit the emissions return; or
(ii) would have been required to submit the emissions return had they 5

complied with this Act in all respects; and
(b) excludes any extension under subsection (1)(d).

134B Penalty for failing to submit annual or closing allocation adjustment by
due date

(1) This section applies if— 10
(a) a person fails to submit an annual allocation adjustment under section 83

or a closing allocation adjustment under section 84 by the due date; and
(b) the EPA is satisfied that the person has not taken reasonable care; and
(c) the EPA gives a notice to the person stating that—

(i) the person has failed to submit the allocation adjustment by the 15
due date; and

(ii) if the person does not submit the allocation adjustment within 20
working days after the notice is given, the EPA will make a deci-
sion under section 86B(4) and a penalty may apply; and

(d) the person fails to submit the allocation adjustment within 20 working 20
days after the notice is given.

(2) If the result of a decision made under section 86B(4) is that—
(a) the person is liable to surrender or repay units, they must pay to the EPA

the penalty calculated under subsection (3) (in addition to surrender-
ing or repaying the units): 25

(b) the person is entitled to receive units, they must pay to the EPA the pen-
alty calculated under subsection (3), but the maximum penalty is
$1,000:

(c) there is no change in the person’s liability or entitlement, no penalty is
payable. 30

(3) The calculation is—
a × b × c

where—
a is the number of units that the person—

(i) is liable to surrender or repay; or 35
(ii) is entitled to receive

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b is the price, in dollars, of carbon per tonne on the due date, as set by or
in accordance with regulations made under section 30W

c is the culpability factor determined under subsection (4).
(4) The culpability factor for a person is the greatest culpability factor that the EPA

is satisfied applies under this table: 5

Person’s level of culpability

Did person voluntarily
disclose failure or error to
EPA before being informed
of it by EPA?

Culpability
factor

Person did not take reasonable care Yes 0.1
No 0.2

Person was grossly careless Yes 0.2
No 0.4

Person knowingly failed Yes 1.0
No 1.0

(5) If the person must pay a penalty, the EPA must give a notice to the person
that—
(a) refers to the person’s failure to submit the allocation adjustment by the

due date and the provision under which the person is required to submit
the allocation adjustment; and 10

(b) refers to the notice issued under subsection (1)(c); and
(c) specifies the amount of the penalty that the person must pay under this

section; and
(d) advises that the person may request to enter into a deferred payment

arrangement under section 135A; and 15
(e) advises that, unless the penalty is paid in full within 20 working days

after the notice is given, interest on the amount of the penalty will accrue
in accordance with section 137.

(6) In this section, due date—
(a) means the final date by which the person was originally required to sub- 20

mit the allocation adjustment; and
(b) excludes any extension under subsection (1)(d).

134C Penalty for submitting incorrect emissions return
(1) This section applies if—

(a) the EPA amends a person’s emissions return under section 120; and 25
(b) the EPA is satisfied that the amendment was needed because the person

failed to take reasonable care.
(2) In particular,—

(a) subsections (3) to (5) apply if the emissions return is for an activity
listed in Part 1 of Schedule 4 (for post-1989 forestry): 30

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227



(b) subsections (6) to (8) apply if the emissions return is for any other
activity.

Activities relating to post-1989 forestry
(3) The person has either—

(a) emissions equal to the carbon dioxide equivalent tonnes of emissions, 5
less removals (if any), assessed for the return to the extent they match a
net liability to surrender or repay units; or

(b) removals equal to the carbon dioxide equivalent tonnes of removals, less
emissions (if any), assessed for the return to the extent they match a net
entitlement to receive or be reimbursed units. 10

(4) If the effect of the amendment is that—
(a) the person’s emissions are greater, removals are lesser, or removals have

become emissions, they must pay to the EPA the penalty calculated
under subsection (5):

(b) the person’s removals are greater, emissions are lesser, or emissions have 15
become removals, they must pay to the EPA the penalty calculated under
subsection (5), but the maximum penalty is $1,000:

(c) there is no change in the person’s emissions or removals, no penalty is
payable.

(5) The calculation is— 20
a × b × c

where—
a is the lesser of—

(a) the person’s emissions or removals under the emissions return, as
amended; and 25

(b) the difference between (whichever applies)—
(i) the person’s emissions under the emissions return before

and after amendment; or
(ii) the person’s removals under the emissions return before and

after amendment; or 30
(iii) the person’s emissions and removals under the emissions

return before and after amendment, with the emissions con-
verted to a negative number

b is the price, in dollars, of carbon per tonne on the due date, as set by or
in accordance with regulations made under section 30W 35

c is the culpability factor determined under subsection (9).
Other activities

(6) The person has either—

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(a) emissions equal to the carbon dioxide equivalent tonnes of emissions
assessed for the return; or

(b) removals equal to the carbon dioxide equivalent tonnes of removals
assessed for the return.

(7) If the effect of the amendment is that— 5
(a) the person’s emissions are greater or removals are lesser, they must pay

to the EPA the penalty calculated under subsection (8):
(b) the person’s removals are greater or emissions are lesser, they must pay

to the EPA the penalty calculated under subsection (8), but the maxi-
mum penalty is $1,000: 10

(c) there is no change in the person’s emissions or removals, no penalty is
payable.

(8) The calculation is—
a × b × c

where— 15
a is the lesser of—

(a) the person’s emissions or removals under the emissions return, as
amended; and

(b) whichever of the following applies:
(i) the difference between the person’s emissions under the 20

emissions return before and after amendment; or
(ii) the difference between the person’s removals under the

emissions return before and after amendment
b is the price, in dollars, of carbon per tonne on the due date, as set by or

in accordance with regulations made under section 30W 25
c is the culpability factor determined under subsection (9).
Culpability factor

(9) The culpability factor for a person is the greatest culpability factor that the EPA
is satisfied applies under this table:

Person’s level of culpability

Did person voluntarily
disclose failure or error to
EPA before being informed
of it by EPA?

Culpability
factor

Person did not take reasonable care Yes 0.1
No 0.2

Person was grossly careless Yes 0.2
No 0.4

Person knowingly failed Yes 1.0
No 1.0

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229



Notice of penalty
(10) If the person must pay a penalty, the EPA must give a notice to the person

that—
(a) refers to the amendment under section 120; and
(b) specifies the amount of the penalty that the person must pay under this 5

section; and
(c) advises that the person may request to enter into a deferred payment

arrangement under section 135A; and
(d) advises that, unless the penalty is paid in full within 20 working days

after the notice is given, interest on the amount of the penalty will accrue 10
in accordance with section 137.

Meaning of due date
(11) In this section, due date—

(a) means the final date by which the person—
(i) was originally required to submit the emissions return; or 15
(ii) would have been required to submit the emissions return had they

complied with this Act in all respects; and
(b) excludes any extension under section 134A(1)(d).

134D Penalty for providing incorrect information in allocation application or
adjustment 20

(1) This section applies if—
(a) the EPA reconsiders, varies, or revokes (changes) a decision on a per-

son’s allocation application or adjustment under section 86C; and
(b) the EPA is satisfied that the change was needed because the person failed

to take reasonable care. 25
(2) If the effect of the change is that—

(a) the person is liable to surrender or repay additional units, or is entitled to
receive fewer units, they must pay to the EPA the penalty calculated
under subsection (3) (in addition to surrendering or repaying any
required units): 30

(b) the person is liable to surrender or repay fewer units, or is entitled to
receive additional units, they must pay to the EPA the penalty calculated
under subsection (3), but the maximum penalty is $1,000:

(c) there is no change in the person’s liability or entitlement, no penalty is
payable. 35

(3) The calculation is—
a × b × c

where—

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a is the lesser of—
(a) the total number of units the person is liable to surrender or repay,

or is entitled to receive, under the decision, as changed; and
(b) the number of units that the person—

(i) is now liable to surrender or repay as additional units, or is 5
no longer entitled to receive, as a result of the change (if
subsection (2)(a) applies); or

(ii) is no longer liable to surrender or repay, or is now entitled
to receive as additional units, as a result of the change (if
subsection (2)(b) applies) 10

b is the price, in dollars, of carbon per tonne on the due date, as set by or
in accordance with regulations made under section 30W

c is the culpability factor determined under subsection (4).
(4) The culpability factor for a person is the greatest culpability factor that the EPA

is satisfied applies under this table: 15

Person’s level of culpability

Did person voluntarily
disclose failure or error to
EPA before being informed
of it by EPA?

Culpability
factor

Person did not take reasonable care Yes 0.1
No 0.2

Person was grossly careless Yes 0.2
No 0.4

Person knowingly failed Yes 1.0
No 1.0

(5) If the person must pay a penalty, the EPA must give a notice to the person
that—
(a) refers to the change under section 86C; and
(b) specifies the amount of the penalty that the person must pay under this

section; and 20
(c) advises that the person may request to enter into a deferred payment

arrangement under section 135A; and
(d) advises that, unless the penalty is paid in full within 20 working days

after the notice is given, interest on the amount of the penalty will accrue
in accordance with section 137. 25

(6) In this section, due date—
(a) means the final date by which the person was originally required to sub-

mit the allocation application or adjustment; and
(b) excludes any extension under section 134B(1)(d).

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135 Date for payment of penalty
(1) A person must pay a penalty imposed under sections 134 to 134D within 20

working days after notice is given of the penalty.
(2) However, if a deferred payment arrangement has been made under section

135A, the person must pay the penalty by the date or dates agreed under the 5
arrangement.

135A Deferred payment arrangements for payments of penalties
(1) A person who is liable to pay a penalty imposed under sections 134 to 134D

may request to enter into an arrangement with the EPA for the person to pay
the penalty after the date required by section 135(1), either in a single pay- 10
ment or in instalments.

(2) The EPA must consider the request, taking into account the person’s financial
position on the date on which the request is made.

(3) The EPA may—
(a) accept the request; or 15
(b) request further information from the person; or
(c) make a counter offer; or
(d) if subsection (5) applies, decline the request.

(4) If the EPA requests further information from the person or makes a counter
offer,— 20
(a) the person must provide the information or respond to the offer within

20 working days after the request or offer, or within a longer period
allowed by the EPA; and

(b) if the person provides the information or responds to the offer later than
required, the provision of the information or the response must be treated 25
as a new request to enter into an arrangement.

(5) The EPA may decline to enter into an arrangement with the person if the EPA
considers that—
(a) the person is in a position to pay all of the penalty immediately; or
(b) the person is being frivolous or vexatious; or 30
(c) the person has not met their obligations under a previous arrangement.

(6) The renegotiation of an arrangement is treated as if it were a new request to
enter into an arrangement. Renegotiation may be initiated—
(a) by the person at any time; or
(b) by the EPA at any time after the end of 12 months after the date on 35

which the arrangement was entered into.
(7) The EPA may cancel an arrangement if—

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(a) it was entered into on the basis of false or misleading information provi-
ded by the person; or

(b) the person is not meeting their obligations under the arrangement.

136 Penalties are debt due to Crown
The amount of a penalty imposed under sections 134 to 134D, together with 5
any interest that accrues on that penalty, constitutes a debt due to the Crown
and is recoverable by the EPA in a court of competent jurisdiction.

223F Section 137 amended (Interest for late payment)
(1) Replace section 137(1) with:
(1) This section applies if— 10

(a) a person is liable to pay a penalty imposed under sections 134 to
134D; and

(b) the person has not paid the penalty by the date on which the penalty was
due (as stated in the notice issued under the relevant section); and

(c) in the case of a penalty imposed under section 134, the person has not 15
surrendered or repaid the units to which the penalty relates.

(2) In section 137(2), delete “excess emissions”.
(3) Replace section 137(2)(b) with:

(b) for the period from the date by which the penalty was due to be paid
until the penalty and any interest due have been paid in full and, in the 20
case of a penalty imposed under section 134, the person has surren-
dered or repaid the units to which the penalty relates.

(4) Repeal section 137(3).
(5) In section 137(4)(a), replace “or to transfer units to a Crown holding account

under section 136 and pay the penalty in full” with “and pay the penalty”. 25
(6) Replace section 137(6) with:
(6) Despite anything in this section, the EPA may remit all or part of an amount of

interest that has accrued under this section if the EPA is satisfied that it would
be manifestly unfair or unjust to impose all, or that part, of the amount.

223G Section 138 amended (Obligation to pay penalty not suspended by appeal) 30
(1) Replace section 138(1) with:
(1) The obligation to pay and the right to receive and recover any penalty imposed

under sections 134 to 134D or interest imposed under section 137 are not
suspended by any review or appeal.

(2) In section 138(2) and (4), delete “excess emissions”. 35

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233



223H Section 138A replaced (Penalties to be paid into Crown account)
Replace section 138A with:

138A Penalties to be paid into Crown account
The EPA must pay the amount of all penalties and interest on the penalties
received from a person in accordance with sections 134 to 134D or 137 into 5
a Crown Bank Account.

223I Section 159 amended (Recovery of costs)
(1) In section 159(1)(a), replace “1 year of the date of a penalty notice given under

section 134 or 136” with “90 days after the date of a penalty notice given under
section 134”. 10

(2) In section 159(3), replace definition of variable C with:

C is the price, in dollars, of carbon per tonne on the relevant date, as set by
or in accordance with regulations made under section 30W.

(3) In section 159(4), replace “section 134, 134A, or 136” with “section 134 to
134D”. 15

(4) Replace section 159(5) with:
(5) In this section—

insolvency process means receivership under the Receiverships Act 1993,
liquidation under the Companies Act 1993, or bankruptcy under the Insolvency
Act 2006 20
relevant date means the earlier of—
(a) the date that is 90 days after the date of the penalty notice; and
(b) the date on which the person enters into an insolvency process.

223J Section 179 amended (Forest land to be treated as deforested in certain
cases) 25

(1) Replace section 179(1)(a) with:
(a) 4 years after clearing, none of the following apply:

(i) the hectare has at least 500 stems of exotic forest species growing:
(ii) the hectare has been replanted with at least 100 stems of willows

or poplars in a manner consistent with managing soil erosion: 30
(iii) the hectare has predominantly indigenous forest species growing

in a manner in which the hectare is likely to be forest land 10
years after the hectare was cleared; or

(2) In section 179(1)(b)(i) and (c), replace “at least” with “more than”.

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223K Section 181 amended (When deforestation to be treated as occurring in
respect of pre-1990 forest land)

(1) Replace section 181(1) with:
(1) This section applies to any hectare of pre-1990 forest land that is being conver-

ted to land that is not forest land. 5
(1A) The hectare of forest land is to be treated as being deforested on the date of the

first action on it that is inconsistent with it remaining forest land.
(2) In section 181(2), replace “Subsection (3) applies to a landowner converting a

hectare of pre-1990 forest land that” with “However, subsection (3) applies
if the hectare of forest land”. 10

(3) Replace section 181(3) with:
(3) The hectare of forest land is to be treated as being deforested on the date of the

first action on it that—
(a) is inconsistent with the hectare remaining forest land; and
(b) happens after the date of transfer of the land or the date of the expiry or 15

termination of the forestry right, Crown forestry licence, lease, or other
agreement relating to the land.

(3A) In any case, the liability in respect of the deforestation must be calculated by
reference to the age and forest species of the trees when they were cleared,
unless section 186(2) applies. 20

223L Section 189 amended (Emissions returns for post-1989 forest land
activities)
In section 189(8)(d)(ii), replace “sections 134 and 135” with “sections 134,
134A, and 134C”.

223M Section 192 amended (Effect of transmission of interest in post-1989 25
forest land)

(1) In section 192(1), table, Part B, in the first and second rows, in the third and
fourth columns, after “forest land”, insert “(only if agreed under subsection
(1A))”.

(2) After section 192(1), insert: 30
(1A) Despite subsection (1)(b), if a transferor covered by that paragraph grants a

registered forestry right or registered lease described in the second column of
Part B of the table in that subsection, this section applies only if, before the
date of transmission,—
(a) the transferor and the transferee have agreed in writing that the trans- 35

feree is to become the participant in relation to the post-1989 forest land
to which the transmitted interest relates; and

(b) the transferor has given written notice of the agreement to the EPA.

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235



(3) In section 192(2), replace “In subsections (1)” with “In subsections (1), (1A),”.

223N Section 217 amended (Transitional provision for penalties)
(1) In section 217(2)(b)(ii), replace “excess emissions penalty under section

134(2)(b)(ii) or 134A(2)(b)” with “a penalty under section 134, 134A, or
134C”. 5

(2) In section 217(2)(c), replace “section 134, 134A, or 136” with “section 134”.
(3) After section 217(2), insert:
(3) The participant—

(a) is not liable to pay a penalty under section 134B or 134D that relates
to an allocation of units in respect of that first year; and 10

(b) is not liable for any infringement offence (as defined by section 30L)
in respect of an act or omission in that first year.

223O Section 233 amended (Rate of synthetic greenhouse gas levy)
(1) In section 233(1), replace definition of variable B with:

B is the lesser of $25 and the price of carbon specified by or under regula- 15
tions made under section 30W

(2) Repeal section 233(4) to (6).

223P Section 236 repealed (Maximum price of carbon for purpose of levy
calculation)
Repeal section 236. 20

223Q Schedule 1AA amended
(1) In Schedule 1AA, after clause 10(3), insert:
(4) Section 89(1A) and (1B) does not apply in respect of failures or errors made

by a person before 1 January 2021.
(2) In Schedule 1AA, after clause 13, insert: 25

Subpart 3—Provisions that commence on 1 January 2021

14 Existing regulations about price of carbon
(1) This clause applies to any regulations made under section 233(4) that, immedi-

ately before the commencement of this clause,—
(a) prescribe the methodology for specifying the price of carbon; or 30
(b) specify the price of carbon by applying the methodology.

(2) On and after the commencement of this clause, the regulations continue in
force and must be treated as if they were made under section 30W.

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15 Penalties
(1) This clause applies in respect of a person who, before the commencement of

this clause,—
(a) fails to surrender or repay units by the due date; or
(b) fails to submit an emissions return or annual or closing allocation adjust- 5

ment; or
(c) submits an incorrect emissions return, allocation application, or alloca-

tion adjustment.
(2) Sections 134 to 134D, as inserted by the amendment Act, do not apply in

respect of the person for the failure or error. 10
(3) This Act, as in force immediately before the commencement of this clause,

applies in respect of the person for the failure or error.

Subpart 3A—Amendments that commence on 1 January 2022

223R Section 3A amended (Treaty of Waitangi (Te Tiriti o Waitangi))
(1) Replace section 3A(a)(viii) with: 15

(viii) section 60A (exemptions for participants in standard forestry or
permanent forestry):

(2) Replace section 3A(a)(xvi) with:
(xva) section 185A (exemptions for deforestation of land with tree

weeds): 20
(xvi) section 186FC (P90 offsetting):
(xvia) section 194EG (pecuniary penalty for clear-felling):
(xvib) section 194FE (averaging):
(xvic) section 194LA (P89 offsetting):
(xvid) section 194TA (temporary adverse event suspensions): 25

223S Section 3B amended (Consultation about certain regulations, orders, and
notices)

(1) Replace section 3B(1)(g) with:
(g) section 60A (exemptions for participants in standard forestry or per-

manent forestry): 30
(2) Replace section 3B(1)(o) with:

(na) section 185A (exemptions for deforestation of land with tree weeds):
(o) section 186FC (P90 offsetting):
(oa) section 194EG (pecuniary penalty for clear-felling):
(ob) section 194FE (averaging): 35

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237



(oc) section 194LA (P89 offsetting):
(od) section 194TA (temporary adverse event suspensions):

223T Section 4 amended (Interpretation)
(1) In section 4(1), repeal the definitions of carbon accounting area, carbon

equivalence, clear, forestry activity, offsetting forest land, pre-1990 forest 5
land, pre-1990 offsetting forest land, removal activity, and usual rotation
period.

(2) In section 4(1), insert in their appropriate alphabetical order:
carbon accounting area means an area of post-1989 forest land—
(a) that— 10

(i) is defined by a person who is registered, or has applied to register,
as a participant under section 57 in relation to an activity of stand-
ard forestry or permanent forestry; and

(ii) meets any relevant criteria specified in regulations made under
this Act; or 15

(b) that is constituted as a carbon accounting area by a provision of this Act
carbon accounting area (averaging) has the meaning given in section
194FC(3)

clear,—
(a) in relation to a tree,— 20

(i) includes—
(A) felling, harvesting, burning, removing by mechanical

means, spraying with a herbicide intended to kill the tree, or
undertaking any other form of human activity that kills the
tree; and 25

(B) felling, burning, killing, uprooting, or destroying by a nat-
ural cause or event; but

(ii) does not include pruning or thinning; and
(b) in relation to land, means to clear (as defined in paragraph (a)) the for-

est species that are on the land 30
clear-felled, in relation to an area of land, means an area—
(a) of at least 1 hectare; and
(b) on which any trees are cleared or killed by any form of human activity,

including by felling, harvesting, burning, removing by mechanical
means, or spraying with a herbicide intended to kill the tree; and 35

(c) that, after that type of clearing or killing, has tree crown cover from for-
est species of 30% or less in each hectare

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constitution date, in relation to a carbon accounting area, means,—
(a) for a carbon accounting area that is defined in an application referred to

in section 188(1), the date the applicant’s registration takes effect
under section 57(8); or

(b) for a carbon accounting area that a participant applies to add under sec- 5
tion 188(3), the date of the notice given under section 188(6)(b)(ii);
or

(c) for any other carbon accounting area, the date on which a person
becomes a participant in an activity on the carbon accounting area under
a provision of Part 5 10

first rotation forest has the meaning given in section 194FD(1) and (2)
forest sink covenant means a forest sink covenant that is or was registered
against land under section 67ZD of the Forests Act 1949
forestry activity means—
(a) an activity listed in Part 1 or 1A of Schedule 3 (deforesting certain 15

pre-1990 forest land or P90 offsetting land); or
(b) an activity listed in Part 1 or 1A of Schedule 4 (standard forestry or per-

manent forestry on post-1989 forest land)
permanent forestry has the meaning given in section 186K
pre-1990 forest land means forest land that— 20
(a) is either of the following:

(i) land—
(A) that was forest land on 31 December 1989; and
(B) that remained as forest land on 31 December 2007 (taking

into account subsection (5)); and 25
(C) where the forest species on the forest land on 31 December

2007 consisted predominantly of exotic forest species; or
(ii) land that has become pre-1990 forest land under section 186EE;

and
(b) is not either of the following: 30

(i) land that has been deforested and in respect of which any liability
to surrender units arising in respect of an activity listed in Part 1
of Schedule 3 has been satisfied; or

(ii) land that was declared to be exempt land, has been deforested, and
in respect of which the number of units that would have been 35
required to be surrendered in respect of an activity listed in Part 1
of Schedule 3 had the land not been exempt land have been sur-
rendered under section 187(2)(b)

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removal activity means—
(a) an activity of standard forestry or permanent forestry (on post-1989 for-

est land); or
(b) an activity that is listed in Part 2 of Schedule 4 (other removal activities)
standard forestry has the meaning given in section 186K 5
subsequent rotation forest has the meaning given in section 194FD(4)
temporary adverse event land has the meaning given in section 194MA(1)

(3) In section 4(1), definition of exempt land, replace paragraph (a)(ii) with:
(ii) under section 184, as long as the EPA has not declared other-

wise (because a requirement or condition has been breached); but 10
(4) In section 4(1), definition of post-1989 forest land, replace paragraph (a)(iv)

with:
(iv) land—

(A) that was pre-1990 forest land that was the subject of a P90
offset application; and 15

(B) that ceased to be forest land while section 179A(1)(b)
applied to it (so it could not be treated as deforested); and

(C) in respect of which a liability to surrender units arose under
section 186BD (because the P90 offset application was
declined) or section 186DI(3) (because the land became 20
area 1 (not offset) land),—

but only if that liability has been satisfied; or
(5) In section 4(1), definition of post-1989 forest land, paragraph (a)(v), replace

“pre-1990 offsetting forest land” with “P90 offsetting land”.
(6) In section 4(1), definition of post-1989 forest land, replace paragraph (b) with: 25

(b) is not area 1 (approved) land (as defined in section 186AA) or P90 off-
setting land

(7) In section 4(1), definition of tree weed, replace “a tree” with “a forest species”.

223U Section 54 amended (Participants)
In section 54(1)(a)(i) and (2), replace “186I” with “186EA”. 30

223V Section 56 amended (Registration as participant in respect of activities
listed in Schedule 3)
After section 56(4), insert:

(5) To avoid doubt, a person carrying out an activity on land to which section
179A applies (and which therefore may not be treated as deforested) is not 35
carrying out an activity listed in Schedule 3, and so does not have to notify the
EPA under subsection (1)(a).

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223W Section 57 amended (Applicant to be registered as participant in respect
of activities listed in Schedule 4)
After section 57(4)(ba), insert:
(bb) if the activity is standard forestry or permanent forestry, has met any

obligations incurred while previously registered (if ever) in respect of an 5
activity of standard forestry; and

223X Section 58 amended (Removal from register of participants in respect of
activities listed in Schedule 4)
In section 58(4), replace “section 188(7)” with “section 191AB”.

223Y New section 59A inserted (Removal from register for persistent non- 10
compliance (standard forestry participants only))
After section 59, insert:

59A Removal from register for persistent non-compliance (standard forestry
participants only)

(1) The EPA may remove the name of a person from the register kept under section 15
57 in respect of an activity of standard forestry if—
(a) the person has not submitted an emissions return required by section

189AB by 365 days after the date on which the person was required to
submit the emissions return; or

(b) the person has not surrendered or repaid units by 365 days after the date 20
on which the person was required to surrender or repay the units; or

(c) the person has not paid a penalty imposed by sections 134 to 134D
by the first day that is—
(i) at least 90 days after the date on which the person was required to

pay the penalty; and 25
(ii) at least 365 days after the date on which the person was required

to surrender or repay the units or submit the emissions return to
which the penalty relates.

(2) However, the EPA may not rely on subsection (1)(a) to remove the name of
a person from the register if— 30
(a) the person has submitted an emissions return under section 189AA

within 365 days after the date on which the emissions return required by
section 189AB was required to be submitted; or

(b) the EPA has made an assessment under section 121 of the matters that
should have been in the person’s emissions return, and— 35
(i) the person has surrendered any units required to be surrendered as

a result of the assessment; and

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(ii) the person has paid any penalties resulting from the failure to sub-
mit the return and from the assessment.

(3) At least 90 days before removing the name of the person from the register, the
EPA must notify the person—
(a) that the EPA proposes to remove the name of the person from the regis- 5

ter; and
(b) of the reason for the proposed removal (for example, failure to surrender

units); and
(c) of the actions that the person may take to prevent the removal (for

example, surrender the units that the person has failed to surrender). 10
(4) The EPA may still take action under this section if it is unable to notify the per-

son of its proposal to do so because it is not reasonably practicable to locate
them or their address.

223Z Section 60A amended (Exemption for participants in activity listed in Part
1 of Schedule 4) 15

(1) In the heading to section 60A, replace “activity listed in Part 1 of Schedule
4” with “standard forestry or permanent forestry”.

(2) In section 60A(1), replace “an activity listed in Part 1 of Schedule 4” with
“standard forestry or permanent forestry”.

223ZA Section 62 amended (Monitoring of emissions and removals) 20
In section 62, insert as subsection (2):

(2) Subsection (1)(b) does not apply in relation to emissions and removals that a
person is not required to calculate under—
(a) section 194FC(2), relating to carbon accounting areas (averaging); or
(b) section 194PC(3), relating to temporary adverse event land. 25

223ZB Section 63 amended (Liability to surrender units to cover emissions)
(1) After section 63(1), insert:
(1A) However, subsection (1) does not apply to emissions for which a participant is

not liable to surrender units as a result of any of the following:
(a) section 179A (when forest land may not be treated as deforested): 30
(b) section 188AB (certain natural events or clearance for forest manage-

ment):
(c) sections 190 and 194JD(3) (limiting liability to unit balances for car-

bon accounting areas):
(d) section 194FC(2) (carbon accounting areas (averaging)): 35
(e) section 194PC(1) (temporary adverse event land).

(2) Repeal section 63(3).

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(3) After section 63(4), insert:
(5) See also sections 194DEA, 194DF, and 194DG in relation to liability to

surrender units when transferring—
(a) from PFSI activity to standard forestry in a carbon accounting area

(averaging); or 5
(b) between permanent forestry and standard forestry in a carbon accounting

area (averaging).

223ZC Section 64 amended (Entitlement to receive New Zealand units for
removal activities)
Replace section 64(1A) with: 10

(1A) Subsection (1) does not apply to removals for which a participant is not entitled
to receive units under—
(a) section 194FC(2), relating to carbon accounting areas (averaging); or
(b) section 194PC(1), relating to temporary adverse event land; or
(c) section 197, relating to grant-funded forests. 15

223ZD Section 65 amended (Annual emissions returns)
(1) Replace section 65(1) and (1A) with:
(1) In the period beginning on 1 January and ending on 31 March in each year, a

participant must submit an annual emissions return to the EPA in respect of
each of the activities listed in Schedule 3 or Part 2, 3, or 4 of Schedule 4 that 20
the participant carried out in the immediately preceding year.

(2) In section 65(2)(b), replace “section 62(b)” with “section 62(1)(b)”.
(3) Repeal section 65(2A).
(4) In section 65(4)(a), delete “or recorded under subsection (2A)(b)”.
(5) Replace section 65(5) with: 25
(5) Despite the rest of this section, a participant in an activity of standard forestry

or permanent forestry (on post-1989 forest land) must instead submit emissions
returns as required by Part 5.

(6) To avoid doubt, a person carrying out an activity on land to which section
179A applies (and which therefore may not be treated as deforested) is not 30
carrying out an activity listed in Schedule 3, and so does not have to notify to
submit an annual emissions return under subsection (1).

223ZE Section 67 amended (Retention of emissions records)
(1) In section 67(1)(b), replace “section 62(b)” with “section 62(1)(b)”.
(2) In section 67(2)(a), replace “section 62(d)” with “section 62(1)(d)”. 35
(3) In section 67(2)(b), replace “an activity listed in Part 1 of Schedule 3 or 4” with

“a forestry activity”.

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223ZF Section 89 amended (EPA to publish certain information)
After section 89(1C)(b), insert:
(c) a penalty imposed under section 194EF or 194EI.

223ZG Section 91 amended (Approval of unique emissions factors)
In section 91(1), replace “section 62(b)” with “section 62(1)(b)”. 5

223ZH Section 92 amended (Recognition of verifiers)
In section 92(1), replace “section 62(a)” with “section 62(1)(a)”.

223ZI Section 107 amended (Applications for emissions rulings)
(1) In section 107(1)(c), replace “186F,” with “185A, 186FC, 194EG, 194FE,

194LA, 194TA,”. 10
(2) In section 107(1)(ca)(ii), replace “section 184(5)(a)” with “section

184(3)(a)”.

223ZJ Section 109 amended (Making of emissions rulings)
In section 109(3), example, replace “listed in Part 1 of Schedule 4” with “of
standard forestry”. 15

223ZK Section 118 amended (Submission of final emissions returns)
After section 118(3), insert:

(3A) However, subsections (1) and (3) do not apply to a participant in an activity of
standard forestry or permanent forestry (on post-1989 forest land), who must
instead submit emissions returns as required by Part 5. 20

223ZL Section 127 amended (Time bar for amendment of emissions returns)
(1) In section 127(1)(a), replace “under section 187 or 191” with “required by sec-

tion 187 or 191BA”.
(2) In section 127(1)(b), replace “section 189 or 193” with “section 189AA,

189AB, 192, 194CA, 194DA, 194GA, 194KC, 194NA, or 194QB”. 25

223ZM New section 128A and cross-heading inserted
After section 128, insert:

Notices required from participants

128A EPA may act if participant fails to give notice
(1) The EPA may act under this section if it is satisfied that a participant has failed 30

to give a notice in accordance with section 186DB, 194JB or 194QB (the
notice provision).

(2) The EPA may,—

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(a) if no notice has been given, prepare the notice that ought to have been
given; or

(b) if a notice has been given but is not complete, complete the notice.
(3) The EPA may do the following when preparing or completing the notice:

(a) if the notice must include an emissions return (including any new unit 5
balance report), the EPA may apply—
(i) section 120 to amend an emissions return that was included; or
(ii) section 121 to assess the matters that should have been in an emis-

sions return that was not included; and
(b) if the notice must include any other information, prepare or complete 10

that information by making any required assumptions or estimates.
(4) Before taking action under this section, the EPA must notify the participant of

its intention to do so, and give them at least 60 working days to give or correct
the required notice.

(5) If the participant gives or corrects the required notice by that deadline, the 15
notice must be treated as having been given to the EPA—
(a) in accordance with the notice provision; and
(b) on the last day on which it could have been given under that provision.

(6) The EPA may still take action under this section if it is unable to notify the par-
ticipant of its intention to do so because it is not reasonably practicable to iden- 20
tify or locate them or their address.

(7) Despite subsection (2),—
(a) for a notice under section 186DB,—

(i) the EPA cannot identify land as area 2 (excess) land; and
(ii) if any land in area 2 that is qualifying forest land is not identified 25

as area 2 (forested land), the EPA must identify it as area 2 (non-
ETS) land; and

(b) for a notice required by section 194JB, the EPA cannot identify any land
as P89 offsetting (excess) land.

223ZN Section 134A amended (Penalty for failing to submit emissions return by 30
due date)
In section 134A(2), replace “listed in Part 1 of Schedule 4 (for post-1989 for-
estry)” with “of standard forestry or permanent forestry”.

223ZO Section 134C amended (Penalty for submitting incorrect emissions
return) 35
In section 134C(2)(a), replace “listed in Part 1 of Schedule 4 (for post-1989
forestry)” with “of standard forestry or permanent forestry”.

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223ZP Section 135A amended (Deferred payment arrangements for payments
of penalties)

(1) In section 135A(1), after “sections 134 to 134D”, insert “, 194EF, or
194EI”.

(2) In section 135A(1), after “section 135(1)”, insert “or 194EJ(3)(a)”. 5

223ZQ Section 136 amended (Penalties are debt due to Crown)
In section 136, after “sections 134 to 134D”, insert “, 194EF, or 194EI”.

223ZR Section 137 amended (Interest for late payment)
In section 137(1)(a), after “sections 134 to 134D”, insert “, 194EF, or
194EI”. 10

223ZS Section 138 amended (Obligation to pay penalty not suspended by
appeal)
In section 138(1), after “sections 134 to 134D”, insert “, 194EF, or
194EI”.

223ZT Section 138A amended (Penalties to be paid into Crown account) 15
(1) In section 138A, replace “or 137” with “, 137, 194EF, or 194EI”.
(2) In section 138A, insert as subsection (2):
(2) However, this section is subject to a court order that a penalty imposed under

section 194EF or 194EI must be applied first to pay the EPA’s actual costs
in bringing the proceedings. 20

223ZU Section 159 amended (Recovery of costs)
In section 159(4), after “section 134 to 134D”, insert “, 194EF, or 194EI”.

223ZV Section 163 amended (Regulations relating to methodologies and
verifiers)

(1) In section 163(1)(a) and (e)(i), replace “section 62(a)” with “section 25
62(1)(a)”.

(2) In section 163(1)(b), replace “section 62(b)” with “section 62(1)(b)”.

223ZW Section 168 amended (Other regulations)
(1) In section 168(1)(j), replace “section 62(d)” with “section 62(1)(d)”.
(2) After section 168(1)(n), insert: 30

(na) prescribing additional criteria for the approval of—
(i) an application to reconfigure carbon accounting areas for standard

or permanent forestry, for the purposes of section 194CB(2)(c):
(ii) an application to change activity on post-1989 forest land, for the

purposes of section 194DB(2)(d); and 35

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223ZX Section 169 amended (Incorporation by reference in certain regulations)
In section 169(4), replace “186F,” with “185A, 186FC, 194EG, 194FE,
194LA, 194TA,”.

223ZY Part 5 replaced
Replace Part 5 with: 5

Part 5
Sector-specific provisions: forestry

Subpart 1—Deforestation

179 Forest land to be treated as deforested in certain cases
(1) Without limiting paragraph (a) of the definition of deforest in section 10

4(1), a hectare of forest land must be treated as deforested for the purposes of
this Act if the forest species on that hectare have been cleared and,—
(a) 4 years after clearing, none of the following apply:

(i) the hectare has at least 500 stems of exotic forest species growing:
(ii) the hectare has been replanted with at least 100 stems of willows 15

or poplars in a manner consistent with managing soil erosion:
(iii) the hectare has predominantly indigenous forest species growing

in a manner in which the hectare is likely to be forest land 10
years after the hectare was cleared; or

(b) 10 years after clearing,— 20
(i) predominantly exotic forest species are growing, but that hectare

does not have tree crown cover of more than 30% from trees that
have reached 5 metres in height; or

(ii) predominantly indigenous forest species are growing, but that
hectare is not forest land; or 25

(c) 20 years after clearing, predominantly indigenous forest species are
growing, but that hectare does not have tree crown cover of more than
30% from trees that have reached 5 metres in height.

(2) Subsection (1)(a)(iii) applies only if the EPA is satisfied that the relevant
local authority has determined that the soil erosion risk of the land is at least 30
moderate.

(3) If forest land is to be treated as deforested under subsection (1),—
(a) the deforestation is to be treated as having been carried out 4 years,

10 years, or 20 years after the clearing of the forest species, as the case
may be; but 35

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(b) the liability in respect of the deforestation must be calculated by refer-
ence to the age and forest species of the trees cleared 4 years, 10 years,
or 20 years earlier, as the case may be.

(4) Nothing in this section limits the EPA’s ability to exercise powers under section
121 in respect of the deforestation of a hectare of forest land whenever the EPA 5
considers that—
(a) the hectare has been converted to land that is not forest land; and
(b) any obligations imposed under this Act in respect of the deforestation

have not been complied with.

179A Forest land may not be treated as deforested in certain cases 10
(1) Despite section 179 and the definition of deforest in section 4(1),—

(a) in the case of pre-1990 forest land, pre-1990 forest land that is cleared
may not be treated as deforested for the purposes of this Act if the
cleared land is exempt land or—
(i) is contiguous with the edge of pre-1990 forest land that existed on 15

31 December 2007; and
(ii) is an area that is less than 1 hectare or that is less than 30 metres

wide at its widest point; and
(iii) is required to be or remain cleared to implement New Zealand’s

best practice forest management; and 20
(iv) is used only for the purpose of implementing New Zealand’s best

practice forest management:
(b) in the case of pre-1990 forest land in relation to which a P90 offset

application has been submitted under section 186BA, the land may not
be treated as deforested during the period— 25
(i) starting on the date on which the application is submitted; and
(ii) ending on the P90 offset date for the land under section

186DA(3):
(c) in the case of post-1989 forest land, the post-1989 forest land that is

cleared may not be treated as deforested if the cleared land— 30
(i) is contiguous with the edge of post-1989 forest land that existed

on the date of the first registration of any person as a participant in
standard forestry or permanent forestry in respect of the cleared
land; and

(ii) is an area that is less than 1 hectare or that is less than 30 metres 35
wide at its widest point; and

(iii) is required to be or remain cleared to implement New Zealand’s
best practice forest management; and

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(iv) is used only for the purpose of implementing New Zealand’s best
practice forest management.

(2) However, in relation to subsection (1)(b), see section 186BD, under which
the effect of subsection (1)(b) may be reversed.

(3) If subsection (1)(c) applies (where land is cleared for forest management), 5
see sections 188AB, 191AB, and 191BB.

(4) This section applies to land that was cleared before, on, or after the commence-
ment of this section.

(5) If regulations prescribe any meaning for New Zealand’s best practice forest
management, then that term has (or includes) that meaning in this section. 10

Subpart 2—Pre-1990 forest land

180 Participant in respect of pre-1990 forest land
(1) If the activity listed in Part 1 of Schedule 3 is carried out, the landowner of the

pre-1990 forest land is to be treated as the person carrying out the activity
unless the EPA is satisfied that— 15
(a) the right to decide to deforest the pre-1990 forest land was vested by the

landowner in a third party, whether before or after 1 January 2008; and
(b) the landowner had no control over the decision.

(2) If the EPA is satisfied that the criteria specified in subsection (1)(a) and (b)
are met, the third party is to be treated as the person carrying out the activity. 20

(3) To avoid doubt, for the purposes of this Act, no person, other than a landowner
or, in the circumstances in subsection (2), a third party, is to be treated
as carrying out an activity listed in Part 1 of Schedule 3.

181 When deforestation to be treated as occurring in respect of pre-1990 forest
land 25

(1) This section applies to any hectare of pre-1990 forest land that is being conver-
ted to land that is not forest land.

(2) The hectare of forest land is to be treated as being deforested on the date of the
first action on it that is inconsistent with it remaining forest land.

(3) However, subsection (4) applies if the hectare of forest land was cleared but 30
not deforested prior to—
(a) the forest land being transferred to the landowner; or
(b) control of the forest land reverting to that landowner following the

expiry or termination of a forestry right, Crown forestry licence, lease, or
other agreement that relates to the land. 35

(4) The hectare of forest land is to be treated as being deforested on the date of the
first action on it that—

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(a) is inconsistent with the hectare remaining forest land; and
(b) happens after the date of transfer of the land or the date of the expiry or

termination of the forestry right, Crown forestry licence, lease, or other
agreement relating to the land.

(5) In any case, the liability in respect of the deforestation must be calculated by 5
reference to the age and forest species of the trees when they were cleared,
unless section 186(2) applies.

(6) This section applies only if section 4(5) does not apply.
(7) To avoid doubt, this section does not apply—

(a) to land to which section 179A applies (and which therefore may not be 10
treated as deforested); or

(b) to land to which section 186DI(3) applies.

183 Applications for exemption for land holdings of less than 50 hectares of
pre-1990 forest land

(1) This section applies to a person who— 15
(a) is a landowner of an area of pre-1990 forest land at the date of issue of

the pre-1990 forest land allocation plan; or
(b) was the landowner of an area of pre-1990 forest land at the date (if any),

between 1 January 2008 and the date of issue of the pre-1990 forest land
allocation plan, on which the area was converted to land that is not forest 20
land.

(2) A person to whom this section applies may apply to the EPA for the area of
pre-1990 forest land to be declared exempt land if—
(a) the area is less than 50 hectares; and
(b) the area was owned on 1 September 2007 by a person or persons who, 25

along with any associated persons, owned in total less than 50 hectares
of pre-1990 forest land; and

(c) no allocation of units to a landowner has been made in respect of the
area under the pre-1990 forest land allocation plan.

(3) An application under subsection (2) must— 30
(a) be submitted to the EPA by—

(i) the date prescribed by regulations made under section
168(1)(ca); or

(ii) in the absence of a date prescribed by regulations made under
section 168(1)(ca), the date specified by public notice given by 35
the EPA; and

(b) be in the prescribed form and accompanied by the prescribed fee (if
any); and

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(c) contain details of the area of pre-1990 forest land to which the applica-
tion relates; and

(d) be accompanied by evidence showing that the land is pre-1990 forest
land; and

(e) be accompanied by a statutory declaration,— 5
(i) in the case of land owned by a sole professional trustee or owned

by professional trustees only, from the trustee of the trust that is
the subject of the exemption application stating that the total of
pre-1990 forest land held in the trust on 1 September 2007—
(A) was less than 50 hectares; and 10
(B) was owned by a sole professional trustee or owned by pro-

fessional trustees only:
(ii) in any other case, from each person who owned the land on 1 Sep-

tember 2007 (other than a joint tenant who is a professional
trustee) stating that the person, together with any persons associ- 15
ated with that person, owned less than a total of 50 hectares of
pre-1990 forest land on 1 September 2007; and

(f) be signed by the applicant; and
(g) be accompanied by any other prescribed information.

(4) If the EPA is satisfied that the applicant is a person to whom this section 20
applies, the land is pre-1990 forest land, and each of the criteria specified in
subsection (2)(a) to (c) is met, the EPA must—
(a) declare the land to be exempt land; and
(b) notify the applicant that the land has been declared exempt land.

(5) Despite subsection (3)(a), the EPA may, at its discretion, accept applications 25
after the date specified in the public notice given under subsection (3)(a)(ii)
or prescribed by regulations under section 168(1)(ca).

(6) The following rules apply for the purposes of determining, under subsection
(2)(b), whether an area of pre-1990 forest land was owned on 1 September
2007 by a person or persons who, along with any associated persons, owned in 30
total less than 50 hectares of pre-1990 forest land:
(a) the EPA must consider only pre-1990 forest land in respect of which the

person or associated person was a landowner on 1 September 2007; and
(b) if land was owned by persons as joint tenants,—

(i) in the case where 1 or more of the joint tenants is a professional 35
trustee, each of the joint tenants other than the professional trustee
or trustees must individually have been a landowner of less than
50 hectares of pre-1990 forest land; or

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(ii) in the case where none of the joint tenants is a professional
trustee, each of the joint tenants must individually have been a
landowner of less than 50 hectares of pre-1990 forest land; and

(c) if land was owned by persons as tenants in common, each tenant in com-
mon’s interest in the land is to be treated as a divided interest on 1 Sep- 5
tember 2007; and

(d) if land was owned by a sole professional trustee or owned by professio-
nal trustees only, the total pre-1990 forest land held in the trust on 1 Sep-
tember 2007 was less than 50 hectares.

(7) For the purposes of this section and section 183B,— 10
own, in relation to pre-1990 forest land, means to be a landowner of the land
professional trustee—
(a) means a trustee whose profession, employment, or business is or

includes acting as a trustee or investing money on behalf of others; and
(b) includes a trustee in whom property is vested under Te Ture Whenua 15

Maori Act 1993.

183A Certain applications not otherwise permitted by section 183
(1) Despite section 183(2)(c) and (3)(a), a person may make an application

under section 183 by 31 December 2013 if—
(a) the area concerned was owned, as at 1 September 2007, by a sole profes- 20

sional trustee or by professional trustees only; and
(b) an allocation of units has been made before the commencement of the

Climate Change Response (Emissions Trading and Other Matters)
Amendment Act 2012 in respect of the area under the pre-1990 forest
land allocation plan. 25

(2) If the EPA proposes to accept the application, the EPA must notify the appli-
cant that—
(a) it proposes to accept the application; but
(b) the applicant must first, within 30 working days after receiving the

notice, surrender or repay to the Crown holding account specified in the 30
notice the number of units specified in the notice; and

(c) if the units are not surrendered or repaid in accordance with paragraph
(b), then the application will be declined.

(3) The units referred to in subsection (2) must be the same number of units that
have been allocated and transferred under the pre-1990 forest land allocation 35
plan in relation to the land concerned.

(4) The EPA must,—

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(a) accept the application and declare the area concerned to be exempt land
if, by the expiry of the 30 days, the units have been surrendered or
repaid; or

(b) decline the application if, by the expiry of the 30 days, the units have not
been surrendered or repaid. 5

(5) To avoid doubt,—
(a) section 183 (as amended by the Climate Change Response (Emissions

Trading and Other Matters) Amendment Act 2012) otherwise applies to
an application permitted by this section, but subject to the modifications
made by this section; and 10

(b) if an application is granted and an area is declared to be exempt land, the
entitlement to units under the pre-1990 forest land allocation plan in
respect of the land is cancelled.

183B Applications for exemption for some Maori land or land with 10 or more
owners 15

(1) This section applies to an area of pre-1990 forest land that—
(a) is less than 50 hectares; and
(b) on 1 September 2007,—

(i) was all of the pre-1990 forest land held in a document that is
equivalent to a record of title under the Land Transfer Act 2017 20
or, if there was no such document, in another instrument of title;
and

(ii) was Maori land or was owned by more than 10 persons; and
(c) was an area of pre-1990 forest land on the following date (the qualifying

date): 25
(i) the date of issue of the pre-1990 forest land allocation plan; or
(ii) the date (if any), between 1 January 2008 and the date of issue of

the pre-1990 forest land allocation plan, on which the area was
converted to land that is not forest land; and

(d) after the qualifying date,— 30
(i) became owned by the trustees of a trust; or
(ii) in the case of Maori freehold land, had an agent appointed for it

under Te Ture Whenua Maori Act 1993 with the power to apply
under this section; and

(e) has not been the subject of an allocation of units to a landowner under 35
the pre-1990 forest land allocation plan.

(2) The trustees or agent described in subsection (1)(d) may apply to the EPA
for the area of pre-1990 forest land to be declared exempt land.

(3) The application—

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(a) may be submitted to the EPA at any time; and
(b) must be in the prescribed form and accompanied by the prescribed fee (if

any); and
(c) must contain details of the area of pre-1990 forest land to which the

application relates; and 5
(d) must be accompanied by evidence showing that the land is pre-1990 for-

est land; and
(e) must be accompanied by a statutory declaration from the applicant stat-

ing that the area of pre-1990 forest land was, on 1 September 2007, all of
the pre-1990 forest land held in a document that is equivalent to a record 10
of title under the Land Transfer Act 2017 or, if there was no such docu-
ment, in another instrument of title; and

(f) must be signed by the applicant; and
(g) must be accompanied by any other prescribed information.

(4) If the EPA is satisfied that the applicant is trustees or an agent described in 15
subsection (1)(d), that the land is pre-1990 forest land, and that each of the
criteria specified in subsection (1)(a) to (e) is met, the EPA must—
(a) declare the land to be exempt land; and
(b) notify the applicant that the land has been declared exempt land.

184 Exemptions for deforestation of land with tree weeds 20
(1) An application may be made under this section for pre-1990 forest land to be

declared exempt land (in relation to deforestation) if a prescribed type of tree
weed—
(a) is growing on the land; or
(b) was cleared from the land as part of the deforestation process on or after 25

1 January 2008.
(2) The application may be made by—

(a) the landowner of the pre-1990 forest land; or
(b) a third party to whom section 180 applies.

(3) The EPA must consider the application against the prescribed criteria and prior- 30
ities and—
(a) may declare the land, or any part of the land, to be exempt land, if satis-

fied that—
(i) the applicant is eligible to apply for the exemption under subsec-

tion (2); and 35
(ii) the land is pre-1990 forest land; and
(iii) the criteria specified in subsection (1) are met; and

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(b) must, if the EPA declares any land to be exempt land, notify the appli-
cant of—
(i) the declaration; and
(ii) any requirements or conditions that the EPA has decided to

impose on the person whose land is exempted. 5
(4) The EPA—

(a) may declare that a person’s land ceases to be exempt land (under this
section) if the person breaches any requirement or condition that the
EPA imposed on them for the exempt land; and

(b) if it does so, must notify the person of the declaration. 10
(5) If a person is convicted of an offence under section 132 or 133 in relation to an

application under this section,—
(a) the person must be treated as a person who has failed to submit an

annual emissions return in respect of an activity listed in Part 1 of
Schedule 3 when required to do so under this Act; and 15

(b) the EPA must make an assessment of the matters that should have been
in the person’s annual emissions return and the number of units the per-
son would have been liable to surrender if the land had not been exempt
land; and

(c) the person is liable to surrender the number of units in the assessment 20
under paragraph (b); and

(d) section 123(1) to (3) and the other provisions of this Act apply as if the
assessment under paragraph (b) were an assessment under section 121.

185 Effect of exemption
The status of pre-1990 forest land as exempt land runs with the land and is not 25
affected by any change in the ownership of the land.

185A Regulations about exemptions for deforestation of land with tree weeds
(1) The Governor-General may, by Order in Council made on the recommendation

of the Minister, make regulations for 1 or more of the following purposes in
relation to exemptions under section 184: 30
(a) prescribing the types of tree weed for which an application may be made

for pre-1990 forest land to be declared exempt land:
(b) defining those types of tree weed based on any matter, such as the fol-

lowing:
(i) the species of tree weed: 35
(ii) the geographical location of the tree weed:
(iii) whether a weed control programme applies to the tree weed:

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(c) prescribing processes for making applications to the EPA for an exemp-
tion, including fees for applications:

(d) prescribing the information required in an application, including—
(i) information to properly describe or define the land:
(ii) evidence about the land and the forest species on the land: 5

(e) prescribing the criteria and priorities that the EPA must consider in
deciding whether to grant an exemption:

(f) prescribing any requirements or conditions that the EPA may impose on
a person whose land is exempted, including for weed control on the
land: 10

(g) specifying that 1 or more of the following is different for different types
of tree weed:
(i) the process for making the application:
(ii) the information required in the application:
(iii) the criteria and priorities that the EPA must consider: 15
(iv) any requirements or conditions that the EPA may impose on a per-

son whose land is exempted:
(h) providing for any other matters contemplated by sections 184 and

185, necessary for their administration, or necessary for giving them full
effect. 20

(2) See sections 3A and 3B for consultation requirements that apply to the making
of the regulations.

(3) The regulations come into force 3 months after the date of their notification in
the Gazette, or on any later date specified in the regulations.

186 Methodology for pre-1990 forest land cleared in 8 years or less 25
(1) Subsection (2) applies where the trees cleared from pre-1990 forest land by a

person carrying out the activity in Part 1 of Schedule 3 are 8 years or younger.
(2) If this subsection applies, the participant must,—

(a) for the purposes of sections 62(1)(b) and 65(2)(b), apply any pre-
scribed methodology and calculate and record the emissions from the 30
activity as if the trees cleared from the pre-1990 forest land were trees of
the age and species of the oldest trees of the predominant species (as
determined by regulations made under section 163) cleared from the
pre-1990 forest land during the previous 9 years (excluding any period
in which the pre-1990 forest land is temporarily unstocked); and 35

(b) surrender units under this Act based on emissions calculated and recor-
ded in accordance with paragraph (a).

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(3) A methodology for calculating emissions from the activity in Part 1 of Sched-
ule 3 prescribed in regulations under section 163 must relate to the trees that
are cleared from the pre-1990 forest land as part of the deforestation activity.

Subpart 3—P90 offsetting land

186AA Interpretation 5
In this subpart,—
area 1 (approved) land means land that—
(a) has become area 1 (approved) land under section 186BC(2)(a); and
(b) has not ceased to be area 1 (approved) land under section 186DI(2)(a)

to (d) 10
area 1 (damaged) land has the meaning given in section 186DB(3)(a)(iii)
area 1 (forested) land has the meaning given in section 186DB(3)(a)(ii)
area 1 (not offset) land has the meaning given in section 186DB(3)(a)(iv)
area 1 (offset) land has the meaning given in section 186DB(3)(a)(i)
area 2 (approved) land means land that— 15
(a) has become area 2 (approved) land under section 186BC(2)(c) or

186DE(2)(b); and
(b) has not ceased to be area 2 (approved) land under section 186DI(2)(e)

to (i)

area 2 (damaged) land has the meaning given in section 186DB(3)(b)(iii) 20
area 2 (excess) land means land that—
(a) has become area 2 (excess) land under section 186DB(3)(b)(iv); and
(b) has not ceased to be area 2 (excess) land under section 186DI(5)
area 2 (forested) land has the meaning given in section 186DB(3)(b)(i)
area 2 (non-ETS) land has the meaning given in section 186DB(3)(b)(v) 25
area 2 (unforested) land has the meaning given in section 186DB(3)(b)(ii)
baseline carbon stock has the meaning given in section 186DA(2)
baseline date has the meaning given in section 186DA(3)
default P90 offset date has the meaning given in section 186DA(5)(a)
expected carbon stock has the meaning given in section 186DA(4) 30
P90 offset application means an application submitted to the EPA under sec-
tion 186BA

P90 offset application date means the date on which a P90 offset application
is submitted to the EPA under section 186BA
P90 offset date has the meaning given in section 186DA(5) 35

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P90 offset release criteria has the meaning given in section 186DA(1)
P90 offsetting land means land that—
(a) has become P90 offsetting land under section 186DI(2)(e); and
(b) has not ceased to be P90 offsetting land under—

(i) section 186EC(1)(a), for clearing before the required equiva- 5
lence date; or

(ii) section 186ED(1)(a), for deforestation before the required
equivalence date; or

(iii) section 186EE(1)(a), on the required equivalence date
P90 release criteria notice means a notice given under section 186DB(1) 10
required equivalence date has the meaning given in section 186DA(6).

P90 offset application

186BA Application to offset land for pre-1990 forest land
(1) The owner of pre-1990 forest land may apply to the EPA to offset other land

for the pre-1990 forest land. 15
(2) The application must—

(a) specify the pre-1990 forest land to which the application relates (area 1);
and

(b) specify the land proposed as offsetting land for that pre-1990 forest land
(area 2); and 20

(c) include any information prescribed in regulations made under section
186FC.

(3) If area 1 and area 2 are owned by different persons, the application must be
made jointly by all the owners of both areas.

(4) The application must— 25
(a) be signed by all of the applicants; and
(b) be submitted—

(i) in the prescribed manner and format; and
(ii) together with the prescribed fee (if any); and
(iii) together with the prescribed information (if any). 30

186BB Criteria for P90 offset application
(1) If a person submits a P90 offset application, the EPA—

(a) if satisfied that the criteria in subsection (2) were met on the P90 off-
set application date, must approve the application; or

(b) otherwise, may decline the application (then see section 186BD). 35

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(2) The criteria are that—
Area 1 criteria

(a) the land in area 1 is pre-1990 forest land that is one or other of the fol-
lowing:
(i) land that was first planted before 1 January 1990; or 5
(ii) land that was harvested and re-established after 1 January 1960;

and
Area 2 criteria

(b) the land in area 2 is 1 or more of the following:
(i) land that is not forest land on the P90 offset application date but, 10

if it were to become forest land,—
(A) would be post-1989 forest land; and
(B) if it were in a carbon accounting area, would meet the cri-

teria in section 194FD for having a first rotation forest:
(ii) post-1989 forest land that— 15

(A) became post-1989 forest land less than 2 years before the
P90 offset application date; and

(B) meets the criteria in section 194FD for having a first rota-
tion forest (or would do so if it were in a carbon accounting
area): 20

(iii) area 2 (excess) land, unless the re-use period prescribed in regula-
tions made under section 186FC has expired:

(iv) P89 offsetting (excess) land (as defined in section 194GAA),
unless the re-use period prescribed in regulations made under
section 186FC has expired; and 25

(c) if any of the land in area 2 is in a carbon accounting area, all of the land
in the carbon accounting area—
(i) is land to which paragraph (b) applies; and
(ii) is part of area 2; and

(d) the total area (whether contiguous or not) of area 2 is equal to or greater 30
than the total area (whether contiguous or not) of area 1; and

(e) each individual parcel that makes up area 2 has an area of at least 1 hec-
tare with an average width of at least 30 metres; and
Participant criteria

(f) each person who will be a participant in respect of land in area 2 would 35
be eligible to be a participant under section 57 if the person were carry-
ing out an activity listed in Part 1 of Schedule 4 on that land; and

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P90 offset release criteria
(g) the EPA is satisfied that, if all of the land in area 1 becomes area 1 (off-

set) land, on the P90 offset date the P90 offset release criteria are likely
to be met; and
Prescribed criteria 5

(h) any other criteria prescribed in regulations made under section 186FC
are met.

186BC Effect of approval of P90 offset application
(1) This section applies if the EPA approves a P90 offset application.
(2) Starting on the P90 offset application date,— 10

(a) area 1 is area 1 (approved) land; and
(b) if any of the land in area 2 is in a carbon accounting area, the participant

for that land—
(i) is liable to surrender the number of units equal to the unit balance

of that carbon accounting area; and 15
(ii) ceases to be a participant in the relevant activity on that carbon

accounting area; and
(c) area 2 is the area 2 (approved) land for area 1.

(3) If subsection (2)(b) applies, the EPA must amend the register kept under sec-
tion 57, and the records of carbon accounting areas kept under section 188(2), 20
to record the effects of this section.

(4) If subsection (2)(b)(i) applies,—
(a) the notice requiring those units to be surrendered (referred to in section

63(4)) must also set out the effect of paragraph (b); and
(b) if the units are not surrendered by the due date, the EPA may revoke the 25

approval by giving written notice to the participant.
(5) If an approval is revoked under subsection (4), this Act applies as if the

application had never been made.
(6) However, despite subsection (5), the effect of subsection (2)(b)(ii) is not

reversed (so the person is not reinstated as a participant for the carbon account- 30
ing area).

186BD Effect of P90 offset application being declined
(1) This section applies if—

(a) the EPA declines a P90 offset application; and
(b) an activity listed in Part 1 of Schedule 3 was carried out on any of the 35

land in area 1 (the affected land) on a date (date D) that was on or after
the P90 offset application date but before the application was declined.

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(2) The owner of the affected land on date D—
(a) is liable to surrender the number of units they would have been required

to surrender when that activity was carried out if the application had not
been made; and

(b) must comply with sections 56 and 65 in relation to that liability. 5
(3) The emissions return required under subsection (2)(b) must cover the period

starting on the P90 offset application date and ending on date D, as if that
period were all part of the immediately preceding year.

Liability to surrender allocation

186CA Allocations for pre-1990 forest land to be surrendered when application 10
approved

(1) This section applies in relation to pre-1990 forest land if—
(a) the land becomes area 1 (approved) land; and
(b) an allocation was made in respect of the land as part of the second tran-

che (whether or not the units were actually transferred when allocated). 15
(2) The owner of the land must—

(a) if they do not have a holding account under section 18A, open a holding
account; and

(b) surrender or repay the number of units equal to the number allocated as
part of the second tranche by transferring them to a Crown holding 20
account.

(3) The owner must do so within 30 working days after the EPA gives them a
notice requiring them to do so.

(4) The notice must specify—
(a) the number of units to be surrendered or repaid; and 25
(b) the Crown holding account to which the units must be transferred.

(5) In this section, second tranche means the allocation of units under the
pre-1990 forest land allocation plan that were transferred on or after 1 January
2013.

Offsetting on P90 offset date 30

186DA P90 offset release criteria
(1) The P90 offset release criteria in respect of area 1 (approved) land and its area

2 (approved) land are that, on the P90 offset date,—
(a) the area of the area 2 (forested) land and any area 2 (damaged) land is

equal to or greater than the area of the area 1 (offset) land; and 35

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(b) the expected carbon stock of the area 2 (forested) land and any area 2
(damaged) land is equal to or greater than the baseline carbon stock for
the area 1 (offset) land; and

(c) any other criteria prescribed in regulations made under section 186FC
are met. 5

(2) The baseline carbon stock for area 1 (offset) land is the carbon stock that the
land had on the baseline date, determined in accordance with regulations made
under section 186FC.

(3) The baseline date, for area 1 (approved) land, is—
(a) if, on the P90 offset application date, every hectare of land in area 1 had 10

forest species on it that had tree crown cover of more than 30%, the P90
offset application date; or

(b) if not, the date on which the clearing of area 1 started most recently
before the P90 offset application date.

(4) The expected carbon stock,— 15
(a) of area 2 (forested) land, is the carbon stock that the land is expected to

have achieved on the required equivalence date determined in accord-
ance with regulations made under section 186FC; and

(b) of area 2 (damaged) land, is the carbon stock that the land would have
been expected to have achieved on the required equivalence date had it 20
not been affected by the adverse natural event determined in accordance
with regulations made under section 186FC.

(5) The P90 offset date, in relation to area 1 (approved) land, is—
(a) the date 4 years after the baseline date (the default P90 offset date); or
(b) if a P90 release criteria notice is given before the default P90 offset date, 25

the date on which the notice is given.
(6) The required equivalence date is the last day of the period that—

(a) starts when the forest species on area 2 (approved) land are first estab-
lished; and

(b) ends at the end of the usual rotation period prescribed in regulations 30
made under section 186FC for the forest species that were on the area
1 (approved) land on the baseline date.

186DB P90 release criteria notice
(1) The owners of the land in area 1 and area 2 must give notice (P90 release cri-

teria notice) to the EPA under this section identifying the status of all land in 35
area 1 and area 2 (including any additional land in relation to which an applica-
tion is being made under section 186DC) on the P90 offset date.

(2) The P90 release criteria notice—

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(a) may be given before the default P90 offset date (under section
186DA(5)(a)); but

(b) if not given before that date, must be given within 60 working days after
the default P90 offset date.

(3) The P90 release criteria notice must— 5
(a) identify all of the land in area 1 as one of the following:

(i) area 1 (offset) land, being all the land in area 1 (other than any
area 1 (damaged) land) that, on the P90 offset date,—
(A) has ceased to be forest land; or
(B) has been cleared with the intention that it will cease to be 10

forest land:
(ii) area 1 (forested) land, being all the land in area 1 that is still for-

est land on the P90 offset date, other than any land that is area 1
(offset) land under subparagraph (i)(B):

(iii) area 1 (damaged) land, being any land in area 1 that has been 15
affected by a natural event that permanently prevents re-establish-
ing a forest on the land:

(iv) area 1 (not offset) land, being any land in area 1 that section
186DG requires to be identified as area 1 (not offset) land; and

(b) identify all of the land in area 2 as one of the following: 20
(i) area 2 (forested) land, being all the land in area 2 that is qualify-

ing forest land on the P90 offset date, other than any land that is
area 2 (excess) land or area 2 (non-ETS) land:

(ii) area 2 (unforested) land, being all the land in area 2 that is not
qualifying forest land on the P90 offset date, other than land that 25
is area 2 (damaged) land:

(iii) area 2 (damaged) land, being any land in area 2 that, before the
P90 offset date, was affected by a natural event that permanently
prevents establishing a forest on the land:

(iv) area 2 (excess) land, being any land in area 2 that— 30
(A) is qualifying forest land on the P90 offset date (but see sub-

section (4)); and
(B) does not need to be included in the area 2 (forested) land in

order for the P90 offset release criteria to be met; and
(C) the owners want to be excluded from the area 2 (forested) 35

land and to be available for re-use under section
186BB(2)(b)(iii) or 194GB(2)(c)(iii):

(v) area 2 (non-ETS) land, being any land in area 2 that—

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(A) is qualifying forest land on the P90 offset date (but see sub-
section (4)); and

(B) does not need to be included in the area 2 (forested) land in
order for the P90 offset release criteria to be met; and

(C) the owners want to be excluded from the area 2 (forested) 5
land but not to be available for re-use under section
186BB(2)(b)(iii) or 194GB(2)(c)(iii); and

(c) specify—
(i) the baseline carbon stock for the area 1 (offset) land; and
(ii) the expected carbon stock of the area 2 (forested) land; and 10

(d) include any information prescribed in regulations made under section
186FC.

(4) If an application is made under section 186DC to add additional land, the
additional land must be identified as area 2 (forested) land.

(5) The P90 release criteria notice must— 15
(a) be made jointly by all of the persons who, on the P90 offset date, own

land in area 1 or area 2 (including any additional land in relation to
which an application is made under section 186DC); and

(b) be signed by all of the owners; and
(c) be given within 60 working days after the P90 offset date; and 20
(d) be given—

(i) in the prescribed manner and format; and
(ii) together with the prescribed fee (if any); and
(iii) together with the prescribed information (if any).

(6) Land is qualifying forest land if— 25
(a) each hectare of the land has forest species on it that have, or are likely to

have, tree crown cover of more than 30%; and
(b) those forest species were established by direct planting activities, includ-

ing direct seeding but excluding natural forest regeneration; and
(c) each individual parcel that makes up the land has an area of at least 1 30

hectare and has an average width of at least 30 metres.

186DC Application to add area 2 (approved) land
(1) An application to add more land (additional land) to the area 2 (approved)

land may be made when the P90 release criteria notice is given to the EPA.
(2) The application must— 35

(a) be made jointly by all of the persons who own land in area 1, area 2, or
the additional land; and

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(b) be signed by all of the applicants; and
(c) be given—

(i) in the prescribed manner and format; and
(ii) together with the prescribed fee (if any); and
(iii) together with the prescribed information (if any). 5

186DD Criteria for adding area 2 (approved) land
(1) If an application is made under section 186DC, the EPA,—

(a) if satisfied that the criteria in subsection (2) are met, must approve the
application; or

(b) otherwise, may decline the application. 10
(2) The criteria are that—

(a) the additional land—
(i) is land of a kind specified in section 186BB(2)(b)(ii), (iii), or

(iv); and
(ii) is qualifying forest land (as defined in section 186DB(6)); and 15

(b) if the application is not approved, on the P90 offset date the P90 offset
release criteria in section 186DA(1)(a) or (b) (or both) will not be
met; and

(c) the area of the additional land is not more than is necessary to enable the
P90 offset release criteria to be met; and 20

(d) any other criteria prescribed in regulations made under section 186FC
are met.

186DE Effect of approval of application to add area 2 (approved) land
(1) This section applies if the EPA approves an application under section 186DC

to add land to the area 2 (approved) land. 25
(2) On the P90 offset date (but before section 186DI takes effect),—

(a) if any of the additional land is a carbon accounting area, the participant
for that land—
(i) is liable to surrender the number of units equal to the unit balance

of that carbon accounting area; and 30
(ii) ceases to be a participant in the relevant activity on that carbon

accounting area; and
(b) the additional land becomes part of the area 2 (approved) land (and is

therefore part of area 2 and becomes area 2 (forested) land (see section
186DB(3)(b)(i) and (4)). 35

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(3) If subsection (2)(a) applies, the EPA must amend the register kept under sec-
tion 57, and the records of carbon accounting areas kept under section 188(2),
to record the effects of this section.

(4) If subsection (2)(a)(i) applies,—
(a) the notice requiring those units to be surrendered (referred to in section 5

63(4)) must also set out the effect of paragraph (b); and
(b) if the units are not surrendered by the due date, the EPA may revoke the

approval by giving written notice to the participant.
(5) If an approval is revoked under subsection (4), this Act applies as if the

application had never been made, except that— 10
(a) the effect of subsection (2)(a)(ii) is not reversed (so the person is not

reinstated as a participant for the carbon accounting area); and
(b) section 186DH does not apply.

186DF Effect of application to add area 2 (approved) land being declined
(1) This section applies if the EPA declines an application under section 186DC 15

to add land to the area 2 (approved) land.
(2) The EPA must notify the applicants of—

(a) the decision and the reasons for it; and
(b) the owners’ right under section 144 to seek a review of that decision;

and 20
(c) the effect of subsection (3) and section 128A.

(3) If the EPA gives a notice under subsection (2),—
(a) the P90 release criteria notice that was accompanied by the application is

taken not to have been given; and
(b) the owners must give the EPA— 25

(i) a revised P90 release criteria notice for area 1 and area 2; and
(ii) if they wish to do so, another application under section 186DC

to add additional land; and
(c) the deadline for giving the P90 release criteria notice under section

186DB(2)(b) is extended to 60 working days after the notice was given 30
under subsection (2).

(4) However, if the owners have previously given a revised notice under subsec-
tion (3)(b)(i) that was accompanied by an application under section
186DC,—
(a) subsection (3)(b)(ii) does not apply and the owners cannot make 35

another application under section 186DC; and
(b) section 186DH does not apply.

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186DG Land that must be identified as area 1 (not offset) land
(1) Land in area 1 must be identified as area 1 (not offset) land if, in the absence of

this section,—
(a) the land would be identified as area 1 (offset) land; and
(b) either or both of the following would apply: 5

(i) the area of the area 1 (offset) land would be greater than the area
of the area 2 (forested) land and any area 2 (damaged) land:

(ii) the baseline carbon stock for the area 1 (offset) land would be
greater than the expected carbon stock of the area 2 (forested) land
and any area 2 (damaged) land. 10

(2) The area of any land identified as area 1 (not offset) land must be the minimum
area necessary to result in the P90 offset release criteria being met.

186DH Extension of time to add area 2 (approved) land
(1) This section applies if—

(a) a P90 release criteria notice is given to the EPA within the time required 15
by section 186DB(2); and

(b) an application under section 186DC was not made when the P90
release criteria notice was given; and

(c) the P90 release criteria notice is not a revised notice given under sec-
tion 186DF(3)(b); and 20

(d) the EPA is not satisfied that the P90 release criteria notice identifies the
land in a way that results in the P90 offset release criteria being met.

(2) The EPA may, by giving a notice to the owners of area 1 and area 2, offer them
an opportunity to submit a revised P90 release criteria notice with an applica-
tion under section 186DC. 25

(3) The EPA’s notice must set out—
(a) the reasons for the EPA’s decision that the P90 release criteria notice is

not correct; and
(b) the owners’ right under section 144 to seek a review of that decision;

and 30
(c) the effect of subsection (4) and section 128A.

(4) If the EPA gives a notice under subsection (2),—
(a) the P90 release criteria notice referred to in subsection (1)(a) is taken

not to have been given; and
(b) the owners must give the EPA— 35

(i) a revised P90 release criteria notice for area 1 and area 2; and
(ii) if they wish to do so, an application under section 186DC to add

additional land; and

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(c) the deadline for giving the P90 release criteria notice under section
186DB(2)(b) is extended to 60 working days after the notice was given
under subsection (2).

186DI Effect on P90 offset date
(1) This section applies if a P90 release criteria notice is given to the EPA in 5

accordance with section 186DB.
(2) With effect on the P90 offset date,—

(a) the area 1 (offset) land—
(i) ceases to be area 1 (approved) land; and
(ii) is the land against which the area 2 (forested) land and area 2 10

(damaged) land are compared to determine whether the P90 offset
release criteria are met; and

(b) the area 1 (forested) land—
(i) ceases to be area 1 (approved) land; and
(ii) is not part of the land used to determine whether the P90 offset 15

release criteria are met; and
(c) the area 1 (damaged) land—

(i) ceases to be area 1 (approved) land; and
(ii) is not part of the land used to determine whether the P90 offset

release criteria are met; and 20
(d) the area 1 (not offset) land—

(i) ceases to be area 1 (approved) land; and
(ii) is not part of the land used to determine whether the P90 offset

release criteria are met; and
(e) the area 2 (forested) land— 25

(i) is part of the land used to determine whether the P90 offset release
criteria are met; and

(ii) becomes P90 offsetting land (then see sections 186EA to
186EE and Part 1A of Schedule 3); and

(iii) ceases to be area 2 (approved) land; and 30
(f) the area 2 (unforested) land—

(i) is not part of the land used to determine whether the P90 offset
release criteria are met; and

(ii) ceases to be area 2 (approved) land; and
(g) the area 2 (damaged) land— 35

(i) is part of the land used to determine whether the P90 offset release
criteria are met; and

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(ii) ceases to be area 2 (approved) land; and
(h) the area 2 (excess) land—

(i) is not part of the land used to determine whether the P90 offset
release criteria are met; and

(ii) ceases to be area 2 (approved) land, but remains area 2 (excess) 5
land subject to subsection (5); and

(i) the area 2 (non-ETS) land—
(i) is not part of the land used to determine whether the P90 offset

release criteria are met; and
(ii) ceases to be area 2 (approved) land and area 2 (non-ETS) land. 10

(3) Starting on the P90 offset date, the owner of the area 1 (not offset) land on the
P90 offset date—
(a) is liable to surrender units as a result of the deforestation of the land as if

that deforestation had occurred on the P90 offset date (see also section
181(7)(b)); and 15

(b) must comply with sections 56 and 65 in relation to that liability.
(4) To avoid doubt,—

(a) the owner of the area 1 (offset) land, incurs no liability under section 63
for the deforestation (because of section 179A(1)(b)); and

(b) the owner of the area 1 (forested) land is not liable to surrender any units 20
(because the land has not been deforested); and

(c) the owner of the area 1 (damaged) land, is not liable to surrender any
units (because the land is excluded from Part 1 of Schedule 3).

(5) Land ceases to be area 2 (excess) land if the land—
(a) becomes area 2 (approved) land as a result of being included in a P90 25

offset application under section 186BB(2)(b)(iii); or
(b) becomes P89 offsetting (approved) land as a result of being included in a

P89 offset application under section 194GB(2)(c)(iii); or
(c) becomes part of a carbon accounting area as a result of an application

under section 188(1) or (3). 30
(6) The EPA must update the register kept under section 186FA to record the

effect of this section.

186DJ Reimbursement of surrendered allocation
(1) This section applies if—

(a) a person surrendered units in respect of area 1 (approved) land in accord- 35
ance with section 186CA(2); and

(b) on the P90 offset date, any of that land is area 1 (forested) land or area 1
(damaged) land.

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(2) Starting on the P90 offset date, the EPA is liable to reimburse to that person
(whether or not they still own the land) the number of units surrendered under
section 186CA(2) in respect of that area 1 (forested) land or area 1 (dam-
aged) land.

P90 offsetting land 5

186EA Participant in respect of P90 offsetting land
If an activity listed in Part 1A of Schedule 3 is carried out on P90 offsetting
land, the landowner is to be treated as the person carrying out the activity.

186EB Clearing or deforestation before required equivalence date
(1) This section applies if— 10

(a) a P90 offset application was approved; and
(b) on the P90 offset date, the area 2 (approved) land became P90 offsetting

land for the area 1 (offset) land; and
(c) before the required equivalence date, either or both of the following

occur on some or all of the P90 offsetting land (the affected land): 15
(i) the land is cleared:
(ii) an activity listed in Part 1A of Schedule 3 (a Part 1A activity) is

carried out on the land.
(2) If the affected land is cleared, section 186EC applies in relation to the clear-

ing of the land. 20
(3) If a Part 1A activity is carried out on the affected land, section 186ED applies

in relation to that activity.
(4) If the affected land is cleared and later (but still before the required equivalence

date) a Part 1A activity is carried out on the affected land—
(a) if, before the Part 1A activity is carried out, the owner submits an emis- 25

sions return as required by section 186EC(1)(b)(ii)—
(i) section 186EC applies in relation to the clearing of the land; and
(ii) section 186ED does not apply in relation to the Part 1A activity;

or
(b) if the owner does not submit an emissions return as required by section 30

186EC(1)(b)(ii) before the Part 1A activity is carried out—
(i) section 186EC does not apply in relation to the clearing of the

land; and
(ii) section 186ED applies in relation to the Part 1A activity.

(5) For the purposes of this section and section 186EC, a hectare of P90 offset- 35
ting land is to be treated as being cleared on the first date on which any part of
that hectare is cleared.

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186EC Clearing before required equivalence date
(1) If this section applies in relation to the clearing of affected land, starting on the

date on which the clearing occurred,—
(a) the affected land ceases to be P90 offsetting land; and
(b) the owner of the affected land— 5

(i) is liable to surrender the units as if the affected land were defores-
ted on the date on which it was cleared; and

(ii) must submit an emissions return as required by section 65 in rela-
tion to that deemed deforestation; and

(iii) if they do not have a holding account under section 18A, must 10
open a holding account.

(2) However, the number of units the owner is liable to surrender under subsec-
tion (1)(b)(i) is the number calculated under subsection (3) instead of the
number of units they would otherwise be liable to surrender under section 63.

(3) The number of units to be surrendered (s) is calculated as follows: 15
s = (d ÷ a) × n

where—
d is the area of the affected land (in hectares)
a is the total area of all of the area 1 (approved) land for the area 1 (offset)

land (in hectares) 20
n is the baseline carbon stock of the area 1 (offset) land, as recorded under

section 186FA(2)(b) (in tonnes).
(4) In the emissions return required under subsection (1)(b)(ii), the relevant por-

tion of the emissions from the area 1 (offset) land is to be recorded as if it were
the emissions from deforestation of the affected land. 25

(5) The liability under subsection (1)(b)(i) is to be treated as a liability to surren-
der units for emissions from the deemed deforestation on the P90 offsetting
land.

(6) The EPA must update the register under section 186FA to record the effect of
this section. 30

(7) To avoid doubt, the affected land is not to be treated as having been deforested
other than as required by this section.

186ED Deforestation before required equivalence date
(1) If this section applies in relation to the carrying out of a Part 1A activity on

affected land, starting on the date on which the activity was carried out,— 35
(a) the affected land ceases to be P90 offsetting land; and
(b) the owner of the affected land—

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(i) must submit an emissions return as required by section 65 as a
result of the carrying out of the activity; but

(ii) is liable to surrender the number of units calculated under sub-
section (2) instead of the number of units they would otherwise
be liable to surrender under section 63 for the emissions from the 5
carrying out of the activity.

(2) The number of units to be surrendered (s) is calculated as follows:
s = (d ÷ a) × n

where—
d is the area of the affected land (in hectares) 10
a is the total area of all of area 1 (approved) land for the area 1 (offset)

land (in hectares)
n is the baseline carbon stock of the area 1 (offset) land, as recorded under

section 186FA(2)(b) (in tonnes).
(3) In the emissions return required under subsection (1)(b)(i), the relevant por- 15

tion of the emissions from the area 1 (offset) land is to be recorded as if it were
the emissions from the carrying out of the activity.

(4) The liability under subsection (1)(b)(ii) is to be treated as a liability to sur-
render units for emissions from the carrying out of the activity on the P90 off-
setting land. 20

(5) The EPA must update the register under section 186FA to record the effect of
this section.

186EE P90 offsetting land becomes pre-1990 forest land
(1) On the required equivalence date, the P90 offsetting land—

(a) ceases to be P90 offsetting land; and 25
(b) becomes pre-1990 forest land.

(2) The EPA must update the register under section 186FA to record the effect of
this section.

Administrative matters

186FA P90 offsetting land register 30
(1) The EPA must keep a register of the following:

(a) P90 offsetting land:
(b) land that has become pre-1990 land under section 186EE and has not

been recorded in the register under section 56:
(c) area 2 (excess) land. 35

(2) The register must include the following information about the registered land:

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(a) whether it is P90 offsetting land, pre-1990 forest land, or area 2 (excess)
land:

(b) a description of the land:
(c) the area of the land (in hectares):
(d) for P90 offsetting land, the baseline carbon stock of the relevant area 1 5

(offset) land (in tonnes):
(e) for pre-1990 forest land, the date on which it became pre-1990 forest

land:
(f) for area 2 (excess) land, the date on which it became area 2 (excess)

land. 10

186FB EPA to give information on request
(1) The EPA must, on request, give a copy of the information on the register under

section 186FA about P90 offsetting land to the owner of that land or the rele-
vant area 1 (offset) land.

(2) The EPA must, on request, give the owner of pre-1990 forest land a statement 15
of the number of units (if any) the owner would be liable to surrender under
section 186CA if that section were to apply in relation to the land.

(3) In this section,—
owner, in relation to land, means a person who owns the land, or has previ-
ously owned it, or is a prospective transferee of it 20
request means a written request from the person to whom the information is to
be given.

186FC Regulations for P90 offsetting
(1) The Governor-General may, by Order in Council made on the recommendation

of the Minister, make regulations for 1 or more of the following purposes: 25
(a) prescribing the information to be included in, and other requirements

for,—
(i) P90 offset applications (section 186BA):
(ii) P90 release criteria notices (section 186DB):
(iii) applications to add land to the area 2 (approved) land (section 30

186DD):
(b) prescribing re-use periods for area 2 (excess) land or P89 offsetting

(excess) land (section 186BB(2)(b)(iii) and (iv)):
(c) prescribing additional criteria for approval of—

(i) P90 offset applications (section 186BB(2)(h)): 35
(ii) applications to add land to the area 2 (approved) land (section

186DD):

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(d) prescribing additional P90 offset release criteria (section
186DA(1)(c)):

(e) prescribing the methodology for determining—
(i) baseline carbon stock (section 186DA(2)):
(ii) expected carbon stock (section 186DA(4)): 5

(f) prescribing usual rotation periods for forest species (section
186DA(6)):

(g) providing for any other matters contemplated by this subpart, necessary
for its administration, or necessary for giving it full effect.

(2) See sections 3A and 3B for consultation requirements that apply to the making 10
of the regulations.

(3) The regulations come into force 3 months after the date of their notification in
the Gazette or on any later date specified in the regulations.

Subpart 4—Post-1989 forest land (standard and permanent forestry)

186K Standard and permanent forestry on post-1989 forest land 15
(1) In this subpart,—

final forestry emissions return means an emissions return that is prepared
under section 189BA and is not a provisional forestry emissions return
permanent forestry means an activity listed in Part 1A of Schedule 4
provisional forestry emissions return means an emissions return submitted 20
under section 189AA
standard forestry means an activity listed in Part 1 of Schedule 4.

(2) To avoid doubt, standard forestry and permanent forestry comprise the same
list of activities carried out in respect of post-1989 forest land, but the differ-
ence is that the relevant Part of Schedule 4 has been chosen to apply to the 25
land.

187 Conditions on registration as participant in certain activities of standard
or permanent forestry in respect of post-1989 forest land

(1) A person may not be registered as a participant under section 57 in respect of
an activity of standard forestry or permanent forestry that relates to— 30
(a) owning any post-1989 forest land, unless the person is the landowner of

the post-1989 forest land and—
(i) there is no forestry right or lease registered in respect of that land;

or
(ii) the person has the written agreement of any holder of a registered 35

forestry right or registered lease in respect of that land to the per-
son registering as a participant; or

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(b) holding a registered forestry right or being the leaseholder under a regis-
tered lease in respect of any post-1989 forest land, unless the person,—
(i) is the holder of the registered forestry right or the leaseholder of

the registered lease; and
(ii) has the written agreement of the landowner of the land to the for- 5

estry right holder or leaseholder, as the case may be, registering as
a participant.

(2) A person may not be registered as a participant under section 57 in respect of
an activity of standard forestry or permanent forestry in relation to exempt land
that has been deforested 8 or less years ago unless the person— 10
(a) has submitted an emissions return to the EPA that—

(i) records the emissions from the deforestation of the land—
(A) that would have been required to have been recorded in an

annual emissions return under section 65, had the land not
been declared to be exempt land; and 15

(B) calculated in accordance with the methodology or method-
ologies prescribed for the deforestation activity listed in
Part 1 of Schedule 3 that were applicable when the land
was deforested; and

(ii) contains an assessment of the liability to surrender units that 20
would have arisen in relation to the deforestation had the land not
been declared to be exempt land; and

(iii) is accompanied by the prescribed fee (if any) and any other pre-
scribed information; and

(iv) is signed by the person submitting the application; and 25
(b) has surrendered, within 60 working days after the EPA gives the person

a notice requiring the surrender, the number of units listed in the assess-
ment under paragraph (a)(ii); and

(c) complies with subsection (1), if applicable.
(3) To avoid doubt, if any person is registered as a participant carrying out an 30

activity of standard forestry or permanent forestry in respect of any post-1989
forest land, no person (including that person) can be registered as a participant
carrying out a different activity of standard forestry or permanent forestry in
respect of that land.

(4) A person may not be registered as a participant under section 57 in respect of 35
an activity of standard forestry or permanent forestry in relation to post-1989
forest land unless—
(a) any action taken by the person in respect of the post-1989 forest land

since 1 January 2008 (including, but not limited to, removal of any exist-
ing vegetation before planting of a forest species on the land) complied 40

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with the Resource Management Act 1991, including any plan under that
Act, or the Forests Act 1949 that was in force at the time the action was
taken; and

(b) if the post-1989 forest land is subject to a pest management plan under
the Biosecurity Act 1993 that imposes requirements in respect of any 5
forest species on the land, the person has—
(i) complied with the requirements; or
(ii) verified that any other person required to comply with the require-

ments has done so.
(5) A person may not be registered as a participant under section 57 in respect of 10

an activity of standard forestry or permanent forestry in relation to post-1989
forest land where the forest species on the land is predominantly naturally
regenerated tree weeds unless the EPA is satisfied that the risk of tree weed
spread from the land that is the subject of the application for registration is low.

(6) Subsection (5) does not apply to any person who has registered as a partici- 15
pant before 1 January 2013.

187A EPA to give public notice of criteria for assessing risk of tree weed spread
The EPA must give public notice of the criteria for assessing the risk of tree
weed spread from land that is the subject of an application for registration
under section 57. 20

188 Registration as participant in standard or permanent forestry
(1) An application under section 57 to be registered as a participant in respect of an

activity of standard forestry or permanent forestry—
(a) may be submitted for all post-1989 forest land in respect of which the

applicant carries out the activity, or any part of the land in respect of 25
which the applicant carries out the activity; and

(b) must define the carbon accounting area or areas in respect of which the
applicant wishes to be a participant; and

(c) must be accompanied by a declaration, in the prescribed form, that—
(i) any action taken by the applicant since 1 January 2008 in relation 30

to the post-1989 forest land in respect of which the application is
submitted (including, but not limited to, removal of any existing
vegetation before planting of a forest species on the land) com-
plied with the Resource Management Act 1991, including any
plan under that Act or the Forests Act 1949 that was in force at the 35
time the action was taken; and

(ii) if the post-1989 forest land is subject to a pest management plan
under the Biosecurity Act 1993 that imposes requirements in
respect of any forest species on the land, the applicant has—

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(A) complied with the requirements; or
(B) verified that any other person required to comply with the

requirements has done so; and
(d) must be accompanied by any information prescribed by regulations

made under this Act. 5
(2) The EPA must keep the following records for the activity of standard forestry

or permanent forestry for which a person is a participant (whether by registra-
tion under section 57 or otherwise):
(a) the carbon accounting area or areas in respect of which the person is a

participant; and 10
(b) for each carbon accounting area used for an activity of standard forestry,

whether or not it is a carbon accounting area (averaging); and
(c) the unit balance of each carbon accounting area in respect of which the

person is a participant, as calculated under the last emissions return sub-
mitted for the area. 15

(3) A person who is a participant in standard forestry or permanent forestry
(whether by registration under section 57 or otherwise) may apply to the EPA
to add any carbon accounting area or areas to the post-1989 forest land in
respect of which the person is recorded as a participant.

(4) An application under subsection (3) must be— 20
(a) in the prescribed form; and
(b) accompanied by any prescribed fee and any prescribed information.

(5) The EPA may (under this section) add a carbon accounting area to the
post-1989 forest land in respect of which a person is recorded as a participant
only if— 25
(a) the EPA is satisfied that the person would (if appropriate) qualify to be

registered as a participant in respect of that land under section 187;
and

(b) where the forest species on that land is predominantly naturally regener-
ated tree weeds, the EPA is satisfied that the risk of tree weed spread 30
from the land is low.

(6) If the EPA—
(a) registers a person as a participant under section 57 in relation to an activ-

ity of standard forestry or permanent forestry, the EPA must notify the
person under section 57(6): 35

(b) receives an application to add a carbon accounting area and subsection
(5) is satisfied, the EPA must—
(i) update the participant’s record to reflect the addition of the carbon

accounting area; and

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(ii) notify the participant accordingly.
(7) The addition of a carbon accounting area under subsection (6)(b)(i) has

effect on and after the date of the notice given under subsection (6)(b)(ii).
(8) See also sections 188AC and 188AD (which require notice to the partici-

pant and notice to interested parties, if any). 5

188AC Notice to forestry participant if their registration added or removed
The EPA must give written or electronic notice to a participant, or former par-
ticipant, of the following matters as soon as practicable after the EPA carries
them out under any of Parts 5 to 5D:
(a) the participant’s registration or removal from registration in respect of an 10

activity, and the date on which this took or takes effect:
(b) the addition or removal of any area or land for which the participant is

registered, and the date on which this took or takes effect.

188AD Notice to interested party if forestry participant’s registration added or
removed 15

(1) A participant must notify the interested party (if any) of the following matters
under this section, in writing or electronically, as soon as practicable after
receiving the EPA’s notice about, or becoming aware of, the matter:
(a) the participant’s registration, or removal from registration, in respect of

an activity, and the date that this took or takes effect: 20
(b) the addition or removal of any area or land for which the participant is

registered, and the date that this took or takes effect.
(2) The EPA must provide the participant with any address that it has recorded for

the interested party.
(3) In this section, interested party means— 25

(a) the landowner, in relation to a participant who is registered for an activ-
ity relating to—
(i) holding a registered forestry right or registered lease over land; or
(ii) being a party to a Crown conservation contract over land; or

(b) any person with a registered forestry right or registered lease in respect 30
of the land, in relation to a participant who is registered for an activity
relating to owning post-1989 forest land.

188AA Removing registration as participant in standard or permanent forestry
(1) This section sets out some situations in which section 191AA or 191BA

applies (which relate to ceasing participation for whole or part carbon account- 35
ing areas).

(2) Section 191AA applies if the EPA—

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(a) receives an application under section 58 for the removal of a person’s
name from the register as a participant in standard forestry; or

(b) is satisfied under section 59(2) that the person has ceased to carry out
standard forestry or permanent forestry.

(3) Section 191AA applies if the EPA decides to remove the name of a person 5
from the register in respect of an activity of standard forestry under section
59A (for persistent non-compliance), or in respect of an activity of standard
forestry or permanent forestry under section 59B (because the person never
carried out the activity).

(4) A person who is a participant in standard forestry or permanent forestry— 10
(a) may apply to the EPA to—

(i) remove any carbon accounting area or areas from the post-1989
forest land in respect of which the person is recorded as a partici-
pant; or

(ii) remove post-1989 forest land from any carbon accounting area or 15
areas in respect of which the person is recorded as a participant;
and

(b) must, as soon as practicable, notify the EPA if the person ceases to carry
out the activity in respect of—
(i) a carbon accounting area in respect of which the person is recor- 20

ded as a participant; or
(ii) any land in a carbon accounting area in respect of which the per-

son is recorded as a participant.
(5) An application or a notice under subsection (4) must be—

(a) in the prescribed form; and 25
(b) accompanied by any prescribed fee and any prescribed information.

(6) Section 191AA applies if the EPA—
(a) receives and approves an application to remove a carbon accounting area

for which a person is recorded as a participant; or
(b) receives a notice that a person has ceased to carry out standard forestry 30

or permanent forestry on all of a carbon accounting area; or
(c) is satisfied that a person has ceased to carry out standard forestry or per-

manent forestry on all of a carbon accounting area.
(7) Section 191BA applies if the EPA—

(a) receives and approves an application to remove land from a carbon 35
accounting area for which a person is recorded as a participant; or

(b) receives a notice that a person has ceased to carry out standard forestry
or permanent forestry on part of a carbon accounting area; or

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(c) is satisfied that a person has ceased to carry out standard forestry or per-
manent forestry on part of a carbon accounting area.

(8) This section is subject to section 194EB (which restricts the removal of land
relating to permanent forestry).

188AB Removing registration as participant in standard or permanent forestry 5
in certain natural events or clearance for forest management

(1) A person who is a participant in standard forestry or permanent forestry may,
as soon as practicable, notify the EPA if all or part of the post-1989 forest land
on which the person carries out the activity—
(a) is affected by a natural event that permanently prevents re-establishing a 10

forest on that land; or
(b) is cleared land to which section 179A(1)(c) applies (which is land

cleared for best practice forest management that may not be treated as
deforested).

(2) The notice must— 15
(a) include the prescribed information (if any); and
(b) be signed by the person; and
(c) be given—

(i) in the prescribed manner and format; and
(ii) together with the prescribed fee (if any); and 20
(iii) together with the prescribed information (if any).

(3) If the EPA is satisfied that the post-1989 forest land is land to which subsec-
tion (1)(a) or (b) applies, then whichever of section 191AA or 191BA is
relevant applies (so that the person is not liable to surrender units equal to the
unit balance of the affected land). 25

Provisional and final forestry emissions returns

189AA Provisional forestry emissions return in any year
(1) This section applies to a person who is a participant in an activity of standard

forestry or permanent forestry.
(2) The person may, once before 1 July in each year, submit a provisional forestry 30

emissions return prepared under section 189BA for the activity—
(a) that covers 1 or more of the carbon accounting areas for which the per-

son is a participant in the activity (each a CAA1); and
(b) that uses the last day of the previous calendar year as the relevant date.

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189AB Final forestry emissions return at end of mandatory emissions return
period

(1) This section applies to a person who is a participant in an activity of standard
forestry or permanent forestry on the last day of a mandatory emissions return
period. 5

(2) The person must submit a final forestry emissions return prepared under sec-
tion 189BA for the activity—
(a) that covers each carbon accounting area for which the person was a par-

ticipant in the activity on the last day of the mandatory emissions return
period (each a CAA1); and 10

(b) that uses the last day of the mandatory emissions return period as the
relevant date.

(3) The deadline for submitting the emissions return is 6 months after the end of
the mandatory emissions return period.

(4) However, subsection (2) does not apply in relation to a carbon accounting 15
area in relation to which a participant is not required to submit an emissions
return under—
(a) section 194FC(2)(b)(ii), relating to carbon accounting areas (averag-

ing); or
(b) section 194PC(3)(b), relating to temporary adverse event land. 20

189BA Preparing provisional or final forestry emissions return
(1) An emissions return prepared under this section must—

(a) specify the CAA1s that the emissions return covers; and
(b) specify the activity for which the person was a participant on the

CAA1s; and 25
(c) for each CAA1,—

(i) specify the emissions return period that applies, by using subsec-
tion (4) and the relevant date from the provision that requires the
return; and

(ii) specify the emissions and removals during the emissions return 30
period; and

(iii) set out the calculation under section 189CA of the person’s
gross liability or entitlement for emissions and removals during
the emissions return period; and

(iv) specify the person’s net liability or entitlement for emissions and 35
removals during the emissions return period by,—
(A) for a provisional forestry emissions return, specifying the

same value as the person’s gross liability or entitlement; or

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(B) for a final forestry emissions return, setting out the calcula-
tion of that value under section 189CB (which takes into
account the liability or entitlement under each provisional
forestry emissions return for an overlapping period, if any);
and 5

(v) set out the calculation under section 189CC of the unit balance;
and

(d) set out the calculation under section 189CD of the person’s total liabil-
ity or entitlement for all the CAA1s.

(2) The emissions return must— 10
(a) include the prescribed information (if any); and
(b) be signed by the participant; and
(c) when submitted under the relevant provision, be submitted—

(i) in the prescribed manner and format; and
(ii) together with the prescribed fee (if any); and 15
(iii) together with the prescribed information (if any).

(3) See section 62(1)(b) and (c) for the requirements to calculate (and poten-
tially verify) emissions and removals.

(4) In this section, emissions return period, for a CAA1, means the period that—
(a) starts on the latest of the following: 20

(i) the first day of the mandatory emissions return period in which
the relevant date falls:

(ii) if the CAA1 was constituted by registration under section 188,
the date on or before registration on which any of the land in the
CAA1 became post-1989 forest land: 25

(iii) if the CAA1 was constituted in another way, the constitution date
of the CAA1:

(iv) the day after the last day of the emissions return period for the
CAA1 under,—
(A) for a provisional forestry emissions return, the last provi- 30

sional or final forestry emissions return submitted for the
CAA1; and

(B) for a final forestry emissions return, the last final forestry
emissions return submitted for the CAA1; and

(b) ends on the relevant date. 35
(5) If subsection (4)(a)(ii) applies, the person must be treated as if they became

a participant in respect of the CAA1 on the date under that subparagraph
(before the CAA1 was actually constituted) for the purposes of calculating—

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(a) emissions and removals from the CAA1; and
(b) the unit balance of the CAA1.

Calculations for provisional and final forestry emissions returns

189CA Gross liability or entitlement for each CAA1 in emissions return
(1) A person’s gross liability or entitlement for a CAA1 over an emissions return 5

period (g) is calculated as follows:
g = r − e

where—
r is the number of units required for removals from the CAA1 during the

emissions return period 10
e is the number of units required for emissions from the CAA1 during the

emissions return period.
Recalculation based on unit balance (section 190)

(2) However, if—
(a) the g calculated under subsection (1) is a negative number, giving a 15

gross liability; and
(b) that gross liability is greater than the CAA1’s previous unit balance

(meaning p in the calculation under section 189CC),—
then g is recalculated as the negative of the previous unit balance.

189CB Net liability or entitlement for each CAA1 in final forestry emissions 20
return

(1) A person’s net liability or entitlement for a CAA1 over an emissions return
period (h) is calculated as follows:

h = g − gn
where— 25
g is the person’s gross liability or entitlement for the CAA1 (under that

same final forestry emissions return)
gn is the sum of the person’s gross liability or entitlement for the CAA1

under each overlapping provisional forestry emissions return (if any).
(2) To avoid doubt, if there is no overlapping provisional forestry emissions return, 30

a person’s net liability or entitlement is the same as their gross liability or
entitlement for a CAA1.

(3) However, if section 194DC applies, the person’s net liability or entitlement
(hr) is recalculated as follows:

hr = ha − s 35
where—

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ha is the person’s net liability or entitlement calculated under subsection
(1)

s is the number of units the person is liable to surrender under section
194DC.

Definition 5
(4) In this section, overlapping provisional forestry emissions return means

each provisional forestry emissions return (if any) submitted for a period that
overlaps with the emissions return period of the final forestry emissions return.

189CC Unit balance calculation for each CAA1 in emissions return
The unit balance of a CAA1 (u) is calculated for an emissions return as fol- 10
lows:

u = p + h
where—
p is—

(a) the previous unit balance of the CAA1 calculated under the last 15
emissions return submitted for the CAA1; or

(b) zero, if there is no such return
h is the person’s net liability or entitlement for the CAA1 under the emis-

sions return for which u is calculated.

189CD Total liability or entitlement for all CAA1s in emissions return 20
A person’s total liability or entitlement for all the CAA1s covered by an
emissions return is the sum of the person’s net liability or entitlement for each
CAA1.

Total liability or entitlement and unit balance has effect for all emissions
returns 25

189DA Total liability or entitlement has effect, and unit balance updated, when
emissions return submitted

(1) This section applies when a person submits a provisional or final forestry emis-
sions return.

(2) If the person’s total liability or entitlement for the CAA1s covered by the emis- 30
sions return is—
(a) a positive number, the person is entitled to receive (or be reimbursed)

that number of New Zealand units; or
(b) a negative number, the person is liable to surrender (or repay) that num-

ber of units. 35
(3) For a final forestry emissions return, the person—

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(a) is entitled to be reimbursed (instead of to receive) units; or
(b) is liable to repay (instead of to surrender) units—
to the extent that they surrendered, or received, more units for a CAA1 under
provisional forestry emissions returns than required to satisfy their net liability
or entitlement for the CAA1 under the final forestry emissions return. 5

(4) The unit balance of each CAA1 covered by the emissions return is updated to
the unit balance calculated under the return.

New unit balance report for certain applications or notices

189EA New unit balance report
(1) A new unit balance report prepared under this section must— 10

(a) specify the CAA2s that the report covers and, for each CAA2 whose
boundaries are not the same as a CAA1, define the CAA2; and

(b) specify the CAA1s (that are replaced by the CAA2s); and
(c) set out the calculation under this section of the opening unit balance of

each CAA2; and 15
(d) if any CAA1 forms a notional CAA2 and a remainder CAA2 (because

participation ceases for part of the CAA1 under section 191BA), set
out the calculation under this section of the person’s final liability or
entitlement.

(2) However, subsection (1) is subject to the following provisions (which limit 20
reconfiguration):
(a) section 194FC(5) (carbon accounting areas (averaging)):
(b) section 194HD (P89 offsetting (approved) land):
(c) section 194PE (temporary adverse event land).
Opening unit balance if CAA2 has same boundaries as CAA1 25

(3) If a CAA2 has the same boundaries as a CAA1, the opening unit balance of
the CAA2 (v) is calculated as follows:

v = u
where—
u is the unit balance of the CAA1 (under the emissions return for the 30

CAA1 that includes the report).
Opening unit balance if CAA2 formed from land in 1 or more CAA1s

(4) If a CAA2 is formed from land in 1 or more CAA1s, the opening unit balance
of the CAA2 (v) is calculated by summing the result of the following calcula-
tion for each CAA1 that overlaps with the CAA2 (because any land in the 35
CAA1 becomes land in the CAA2):

un × (an ÷ bn)

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where—
un is the unit balance of the overlapping CAA1 (under the emissions return

for the CAA1 that includes the report)
an is the area of overlap between the CAA2 and the overlapping CAA1 (in

hectares) 5
bn is the area of the overlapping CAA1 (in hectares).
Final liability or entitlement if CAA1 forms notional CAA2 and remainder
CAA2

(5) A person’s final liability or entitlement (f) is calculated as follows:
f = t − un 10

where—
t is the person’s total liability or entitlement for the CAA1s (under the

emissions return for the CAA1s that includes the report)
un is the sum of the opening unit balance of each notional CAA2 formed

from a CAA1. 15

Maximum liability is unit balance of carbon accounting area

190 Maximum liability is unit balance of carbon accounting area
Despite section 63, a person who is or was a participant in respect of an activity
of standard forestry or permanent forestry is not liable to surrender more units
in relation to any carbon accounting area or part of a carbon accounting area 20
than the unit balance of that carbon accounting area or part of a carbon
accounting area.

Ceasing participation in standard or permanent forestry

191AA Ceasing participation for whole carbon accounting areas
(1) This section applies if a person ceases, or is to cease, participation in an activ- 25

ity of standard forestry or permanent forestry (on the end date) on 1 or more
whole carbon accounting areas (each a CAA1).

(2) However, this section does not apply if another provision of this Act requires
an emissions return to be prepared for the situation.

(3) To avoid doubt, this section applies whether— 30
(a) the person is ceasing to be a participant in the activity on a CAA1, or is

removing a CAA1 for which the person is recorded as a participant; or
(b) the person is giving notice to the EPA, the EPA has approved an applica-

tion from the person, or the EPA is acting under a provision of this Act;
or 35

(c) the CAA1s are some or all of the carbon accounting areas on which the
person participates in the activity.

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191AB Effect of ceasing participation for whole carbon accounting areas
(1) If section 191AA applies, then, starting on the end date,—

(a) the person ceases to be a participant in the activity on the CAA1s; and
(b) the person is liable to surrender the number of units equal to the unit bal-

ance of each CAA1 (calculated under the last emissions return submitted 5
for the CAA1).

(2) However, subsection (1)(b) does not apply if the person has ceased to be a
participant because of section 188AB (for a natural event that permanently
prevents re-establishing a forest or land cleared for best practice forest manage-
ment). 10

(3) The EPA must amend the register kept under section 57, and the records of car-
bon accounting areas kept under section 188(2), to record the effects of this
section.

(4) See sections 188AC and 188AD, which require notice to the participant and
notice to interested parties, if any. 15

191BA Ceasing participation for part carbon accounting areas
(1) This section applies if a person ceases, or is to cease, participation in an activ-

ity of standard forestry or permanent forestry (on the end date) on only part of
1 or more carbon accounting areas (each a CAA1).

(2) To avoid doubt, this section applies whether— 20
(a) the person ceases to be a participant in the activity on part of a CAA1, or

is removed from being recorded as a participant in respect of part of a
CAA1; or

(b) the person is giving notice to the EPA, the EPA has approved an applica-
tion from the person, or the EPA is acting under a provision of this Act. 25

(3) However, this section does not apply to a situation for which another provision
of this Act already requires an emissions return to be prepared.

(4) The person must—
(a) prepare a final forestry emissions return under section 189BA for the

activity— 30
(i) that covers each CAA1; and
(ii) that uses the end date as the relevant date; and

(b) include in that return a new unit balance report under section 189EA
for the activity that covers the following carbon accounting areas (each a
CAA2) formed from each CAA1: 35
(i) a notional CAA2 for the part of the CAA1 where participation

ceases:
(ii) a remainder CAA2 for the rest of the land in the CAA1.

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(5) The person must—
(a) include the emissions return with the application or notice when it is

made or given; or
(b) if there is no application or notice, provide the emissions return when

required by the EPA. 5
(6) The land in a notional CAA2 must be treated as forest land if the person has

ceased to be a participant because of section 188AB (for a natural event that
permanently prevents re-establishing a forest or land cleared for best practice
forest management).

191BB Effect of ceasing participation for part carbon accounting areas 10
(1) This section applies if a final forestry emissions return (for the CAA1s) is pro-

vided to the EPA in accordance with section 191BA, including a new unit
balance report (for the CAA2s).

(2) Starting on the end date,—
(a) the emissions return is treated as being submitted (so that the total liabil- 15

ity or entitlement has effect, and the unit balance is updated, for the
CAA1s under section 189DA); and

(b) the person ceases to be a participant in the activity on the notional
CAA2s; and

(c) the person is liable to surrender the number of units equal to the opening 20
unit balance calculated for each notional CAA2 in the new unit balance
report; and

(d) the person is a participant in the activity on the remainder CAA2s
(instead of the CAA1s); and

(e) the unit balance of each remainder CAA2 is the opening unit balance 25
calculated for it in the new unit balance report; but

(f) any entitlement to receive units because of paragraph (a) is offset
against any liability to surrender units under paragraph (c), so that the
person’s final liability or entitlement is as calculated in the new unit bal-
ance report. 30

(3) However, subsection (2)(c) and (f) does not apply if the person has ceased
to be a participant because of section 188AB (for a natural event that per-
manently prevents re-establishing a forest or land cleared for best practice for-
est management).

(4) The EPA must amend the register kept under section 57, and the records of car- 35
bon accounting areas kept under section 188(2), to record the effects of this
section.

(5) See sections 188AC and 188AD, which require notice to the participant and
notice to interested parties, if any.

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191CA If participant has never carried out activity in carbon accounting area
(1) This section applies if the EPA is satisfied that the person is not carrying out,

and has never carried out, the activity of standard or permanent forestry on a
carbon accounting area, or part of an accounting area, for which they are regis-
tered. 5

(2) The EPA must amend the register kept under section 57, and the records of car-
bon accounting areas kept under section 188(2), to remove the person’s
registration in respect of the carbon accounting area, or part carbon accounting
area.

(3) The person must surrender the unit balance that relates to the carbon account- 10
ing area (or part area).

(4) At least 60 days before amending the register, the EPA must notify the per-
son—
(a) that the EPA proposes to remove the person’s registration in respect of

the carbon accounting area, or part carbon accounting area; and 15
(b) of the reason for the proposed removal; and
(c) of the actions that the person may take to prevent the removal (for

example, provide evidence that the person carries out the activity on the
carbon accounting area).

(5) The EPA may still take action under this section if it is unable to notify the per- 20
son of its proposal to do so because it is not reasonably practicable to locate
them or their address.

Transmission of interest relating to standard or permanent forestry

192 Transmission of interest in post-1989 forest land
(1) This section applies— 25

(a) if, subject to section 157A(4), a person registered as a participant in
respect of an activity of standard forestry or permanent forestry and who
is described in the first column of Part A of the following table trans-
fers, including by way of sale, assignment, or by operation of law, all or
any of the interest described in the second column of Part A of the table 30
to a person described in the third column of Part A of the table:

(b) if a person registered as a participant in respect of an activity of standard
forestry or permanent forestry and who is described in the first column
of Part B of the following table grants an interest or enters into a con-
tract described in the second column of Part B of the table: 35

(c) if an interest described in the second column of Part C of the following
table expires or is terminated, and the person described in the first col-
umn of Part C of the table is, in relation to that interest, registered as a

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participant in respect of an activity of standard forestry or permanent for-
estry:

Part A

Existing participant Interest transferred New participant

New activity of
standard or
permanent forestry

Landowner of
post-1989 forest land

Post-1989 forest land
in respect of which
the person is
recorded as a
participant

New land owner Owning post-1989
forest land

Holder of a
registered forestry
right over post-1989
forest land

Registered forestry
right over post-1989
forest land in respect
of which the person
is recorded as a
participant

New forestry right
holder

Holding a registered
forestry right over
post-1989 forest land

Leaseholder under a
registered lease of
post-1989 forest land

Registered lease over
post-1989 forest land
in respect of which
the person is
recorded as a
participant

New lessee Being the leaseholder
under a registered
lease of post-1989
forest land

Party to a Crown
conservation contract

Crown conservation
contract over
post-1989 forest land
in respect of which
the person is
recorded as a
participant

New party to the
Crown conservation
contract

Being a party to a
Crown conservation
contract

Part B

Existing participant Interest entered into New participant

New activity of
standard or
permanent forestry

Landowner of
post-1989 forest land

Registered forestry
right over post-1989
forest land in respect
of which the person
is recorded as a
participant

Holder of a
registered forestry
right over post-1989
forest land (only if
agreed under
subsection (1A))

Being the holder of a
registered forestry
right over post-1989
forest land (only if
agreed under
subsection (1A))

Landowner of
post-1989 forest land

Registered lease of
post-1989 forest land
in respect of which
the person is
recorded as a
participant

Lessee under a
registered lease of
post-1989 forest land
(only if agreed under
subsection (1A))

Being a lessee under
a registered lease of
post-1989 forest land
(only if agreed under
subsection (1A))

Landowner of Crown
land that is post-1989
forest land

Crown conservation
contract over
post-1989 forest land
in respect of which
the person is
recorded as a
participant

Party to the Crown
conservation contract

Being a party to a
Crown conservation
contract

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Part C

Existing participant
Interest expired or
terminated New participant

New activity of
standard or
permanent forestry

Holder of a
registered forestry
right over post-1989
forest land

Registered forestry
right over post-1989
forest land in respect
of which the person
is recorded as a
participant

Landowner of the
post-1989 forest land

Owning post-1989
forest land

Leaseholder under a
registered lease of
post-1989 forest land

Registered lease over
post-1989 forest land
in respect of which
the person is
recorded as a
participant

Landowner of the
post-1989 forest land

Owning post-1989
forest land

Party to a Crown
conservation contract

Crown conservation
contract over
post-1989 forest land
in respect of which
the person is
recorded as a
participant

Landowner of the
post-1989 forest land

Owning post-1989
forest land.

(1A) Despite subsection (1)(b), if a transferor covered by that paragraph grants a
registered forestry right or registered lease described in the second column of
Part B of the table in that subsection, this section applies only if, before the
date of transmission,—
(a) the transferor and the transferee have agreed in writing that the trans- 5

feree is to become the participant in relation to the post-1989 forest land
to which the transmitted interest relates; and

(b) the transferor has given written notice of the agreement to the EPA.
(2) In subsections (1), (1A), and (3) to (7) and section 193,—

(a) CAA1— 10
(i) means a carbon accounting area that contains post-1989 forest

land to which a transmitted interest relates; and
(ii) includes, where a transmitted interest relates to post-1989 forest

land in part of a carbon accounting area, that carbon accounting
area: 15

(b) each of the persons described in the first column of the table in subsec-
tion (1) is a transferor:

(c) each of the persons described in the third column of the table in subsec-
tion (1) is a transferee:

(d) transmitted interest means,— 20
(i) in the circumstances described in subsection (1)(a), the

post-1989 forest land, registered forestry right over post-1989 for-

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est land, registered lease of post-1989 forest land, or Crown con-
servation contract that is transferred:

(ii) in the circumstances described in subsection (1)(b), the regis-
tered forestry right over post-1989 forest land, registered lease of
post-1989 forest land, or Crown conservation contract that is gran- 5
ted or entered into:

(iii) in the circumstances described in subsection (1)(c), the interest
in the registered forestry right over post-1989 forest land, regis-
tered lease of post-1989 forest land, or Crown conservation con-
tract that has expired or been terminated: 10

(e) date of transmission means,—
(i) in the circumstances described in subsection (1)(a), the date of

transfer of—
(A) the post-1989 forest land:
(B) the registered forestry right over post-1989 forest land: 15
(C) the registered lease of post-1989 forest land:
(D) the Crown conservation contract:

(ii) in the circumstances described in subsection (1)(b), the date of
registration of the registered forestry right over post-1989 forest
land, the date of registration of the registered lease of post-1989 20
forest land, or the date the Crown conservation contract is entered
into:

(iii) in the circumstances described in subsection (1)(c), the date
that the registered forestry right over post-1989 forest land, regis-
tered lease of post-1989 forest land, or Crown conservation con- 25
tract expires or is terminated.

(3) The transferor and transferee must give notice of the transmission to the EPA—
(a) within 20 working days of the date of transmission; or
(b) if the transmission occurred by operation of law, as soon as practicable

after the date of transmission. 30
(4) The notice must—

(a) include a final forestry emissions return prepared by the transferor under
section 189BA for the activity—
(i) that covers each CAA1; and
(ii) that uses the date of transmission as the relevant date; and 35

(b) include in that return a new unit balance report prepared by the trans-
feror under section 189EA for the activity that covers the following
carbon accounting areas (each a CAA2):

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(i) for each CAA1 where the transmitted interest applies to its entire
area, a transferee CAA2 with the same boundaries as the CAA1:

(ii) for each other CAA1,—
(A) a transferee CAA2 for the part of the CAA1 to which the

transmitted interest relates; and 5
(B) a transferor CAA2 for the rest of the CAA1.

(5) The notice must be—
(a) in the prescribed form; and
(b) accompanied by any prescribed fees or charges and any prescribed infor-

mation; and 10
(c) signed by both the transferor and the transferee.

(6) However, if the transmitted interest is part of a deceased participant’s estate,—
(a) for the transfer to the executor or administrator,—

(i) subsections (3) to (5) do not apply (so that no notice, final for-
estry emissions return, or new unit balance report is required); but 15

(ii) section 193(2)(b) and (c) and (3) still applies; and
(b) for the transfer from the executor or administrator to a successor,—

(i) the transferee (not the transferor) must prepare the final forestry
emissions return and new unit balance report required by subsec-
tion (4); and 20

(ii) for the purposes of those documents, the CAA1s are the CAA1s
from the transfer to the executor or administrator; and

(c) in every case, the executor or administrator of more than 1 deceased par-
ticipant’s estate is treated under this Act as if they were a separate par-
ticipant for each of those estates. 25

(7) To avoid doubt,—
(a) for the purposes of section 54(4), but subject to section 194AC, a

transferor continues to be liable in respect of any obligations that arose
in relation to the CAA1 while the transferor was a participant in respect
of the post-1989 forest land to which the transmitted interest relates (for 30
example, in respect of the submitting of returns and surrendering of
units); and

(b) a transferor is not required to notify the EPA separately under section 59
if the result of the transfer is that the transferor is ceasing to carry out the
activity; and 35

(c) the EPA is not required to notify any person under section 188(6)(a)
of the registration of the transferee under section 57 if that registration is
in accordance with this section.

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193 Effect of transmission of interest in post-1989 forest land
(1) This section applies if notice of a transmission is given to the EPA in accord-

ance with section 192, including a final forestry emissions return (for the
CAA1s) and new unit balance report (for the CAA2s).

(2) Starting on the date of transmission,— 5
(a) the emissions return is treated as being submitted (so that the total liabil-

ity or entitlement has effect, and the unit balance is updated, for the
CAA1s under section 189DA); and

(b) the transferee becomes a participant on the transferee CAA2s in the rele-
vant activity referred to in the fourth column of the table in section 10
192(1); and

(c) the transferor,—
(i) if there is 1 or more transferor CAA2s, is a participant in the rele-

vant activity described in section 192(1) on the transferor
CAA2s (instead of the CAA1s); or 15

(ii) otherwise, ceases to be a participant in that activity on the CAA1s;
and

(d) the unit balance of each CAA2 is the opening unit balance calculated for
it in the new unit balance report.

(3) The EPA must amend the register kept under section 57, and the records of car- 20
bon accounting areas kept under section 188(2), to record the effects of this
section.

Information about status of forest land

194 Information about status of forest land
(1) Despite anything in this Act, the EPA must, on receipt of a written request for 25

information about the carbon accounting area or areas to which it relates, pro-
vide a statement containing the information in subsection (2) to—
(a) the landowner of any post-1989 forest land in respect of which the

holder of a registered forestry right or registered lease or party to a
Crown conservation contract is a participant; or 30

(b) a prospective transferee, holder of a registered forestry right or regis-
tered lease, or party to a Crown conservation contract who has the writ-
ten consent of the participant in respect of any post-1989 forest land.

(2) A statement under subsection (1) must set out—
(a) the emissions returns (if any) that have been submitted in respect of the 35

carbon accounting area or areas covered by the information request since
the carbon accounting area or areas were constituted, and the period
covered by those returns; and

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(b) the unit balance of the carbon accounting area or areas covered by the
information request.

Non-compliance for transmitted interests

194AA EPA may act if person fails to give notice of transmitted interest
(1) This section applies if— 5

(a) the EPA is satisfied that a notice has not been given in accordance with
section 192(3) (for a transmission of interest); and

(b) section 194AC (for 1 or more transmissions of interest after that first
one) does not apply to the transmission.

(2) In particular, this section applies to whichever of the following notices (form- 10
ing part of that overall notice required by section 192(3)) has not been given in
accordance with that provision (each a failed notice):
(a) the part that requires information from the transferor (the transferor

notice):
(b) the part that requires information from the transferee (the transferee 15

notice).
EPA may correct matters

(3) The EPA may act under section 194AB(2) and (3) in relation to a failed
notice if—
(a) the EPA notifies the transferor or transferee of its intention to do so; and 20
(b) the EPA specifies the following deadline for them to give or correct the

required notice: the end of the 90th working day after the EPA gives its
notice; and

(c) they do not give or correct the required notice by the deadline.
EPA may correct matters, remove relevant registration after transmission 25
registered, or do both

(4) The EPA may act under 1 or both of section 194AB(2) and (3) and section
194AB(4) and (5) in relation to a failed notice if—
(a) these requirements are met:

(i) the EPA notifies the transferor or transferee of its intention to do 30
so; and

(ii) the EPA specifies the following deadline for them to give or cor-
rect the required notice:
(A) 6 months after the end of the mandatory emissions return

period in which the date of transmission falls; or 35
(B) if the EPA gives its notice after the deadline in subsubpara-

graph (A), the end of the 90th working day after the EPA
gives its notice; and

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(iii) they do not give or correct the required notice by the deadline; or
(b) the EPA is unable to notify the transferor or transferee of its intention to

do so because it is not reasonably practicable to identify or locate them
or their address.

EPA may remove relevant registration where transmission not registered 5
(5) The EPA may act under section 194AB(6) and (7) in relation to a failed

notice if—
(a) these requirements are met:

(i) the EPA notifies the transferor or transferee of its intention to do
so; and 10

(ii) the EPA specifies the following deadline for them to give or cor-
rect the required notice:
(A) 6 months after the end of the mandatory emissions return

period in which the date of transmission falls; or
(B) if the EPA gives its notice after the deadline in subsubpara- 15

graph (A), the end of the 90th working day after the EPA
gives its notice; and

(iii) they do not give or correct the required notice by the deadline; or
(b) the EPA is unable to notify the transferor or transferee of its intention to

do so because it is not reasonably practicable to identify or locate them 20
or their address.

(6) However, where this section also applies to 1 or more other transmissions of
interest for different parts of the same CAA1, the EPA must not act under sec-
tion 194AB(6) and (7) unless it is authorised to do so (by satisfying subsec-
tion (5) of this section) in respect of both the transferor and transferee of all of 25
the transmissions.
Transferor or transferee gives or corrects notice

(7) If the transferor or transferee gives or corrects the required notice by the dead-
line specified in a notice given by the EPA under this section, their notice must
be treated as having been given to the EPA— 30
(a) in accordance with section 192(3); and
(b) on the last day on which it could have been given under that provision.

194AB How EPA may act
(1) In acting under this section in relation to a failed notice, the EPA may—

(a) use subsections (2) and (3) to correct matters: 35
(b) use subsections (4) and (5) to remove registration in relation to rele-

vant CAA2s (after the transmission is registered):

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(c) use subsections (6) and (7) to remove registration in relation to rele-
vant CAA1s (where the transmission is not registered).

Correcting matters
(2) The EPA may,—

(a) if the failed notice has not been given, prepare the notice that ought to 5
have been given; or

(b) if the failed notice has been given but is not complete, complete the
notice.

(3) The EPA may do the following when preparing or completing the notice:
(a) if the notice must include an emissions return (including any new unit 10

balance report), the EPA may apply—
(i) section 120 to amend an emissions return that was included; or
(ii) section 121 to assess the matters that should have been in an emis-

sions return that was not included; and
(b) if the notice must include any other information, the EPA may prepare or 15

complete that information by making any required assumptions or esti-
mates.

Removing registration for relevant areas after transmission registered
(4) If the transmission of interest has had effect in accordance with section 193, the

EPA may amend the register kept under section 57, and the records of carbon 20
accounting areas kept under section 188(2), to record that—
(a) the transferee ceased to be a participant in the relevant activity on each

transferee CAA2 immediately after becoming a participant for those, if
the transferee notice is a failed notice:

(b) the transferor ceased to be a participant in the relevant activity on the 25
transferor CAA2s immediately after becoming a participant for those,
if—
(i) there are 1 or more transferor CAA2s; and
(ii) the transferor notice is a failed notice.

(5) If the EPA acts under subsection (4),— 30
(a) the person who ceases to be a participant on certain CAA2s is liable to

surrender the number of New Zealand units equal to the unit balance of
each of those CAA2s (calculated under the last emissions return submit-
ted for the CAA2); and

(b) see sections 188AC and 188AD, which require notice to the partici- 35
pant and notice to interested parties, if any.

Removing registration for relevant areas where transmission not registered
(6) If the transmission of interest has not had effect in accordance with section

193, the EPA may amend the register kept under section 57, and the records of

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carbon accounting areas kept under section 188(2), to record that the trans-
feror ceased to be a participant in the relevant activity on the CAA1s on the
date of transmission.

(7) If the EPA acts under subsection (6),—
(a) the transferor is liable to surrender the number of New Zealand units 5

equal to the unit balance of each of those CAA1s (calculated under the
last emissions return submitted for the CAA1); and

(b) see sections 188AC and 188AD, which require notice to the partici-
pant and notice to interested parties, if any.

194AC EPA may attribute liability and entitlement to final transferee after 10
earlier non-compliant transmission

(1) This section applies if a person would have been a transferee of a transmitted
interest (the final transmission) under section 192 had it not been for—
(a) the failure of any person to give notice in accordance with section 192(3)

for an earlier transmission of interest (the first transmission); and 15
(b) if there were 1 or more other transmissions of interest between the first

and final transmissions, those other transmissions not becoming subject
to (and compliant with) the requirements of section 192 after that failure.

(2) The EPA must treat the transferee of the final transmission as if they were
liable to surrender units for all emissions, and entitled to receive units for all 20
removals, from the land in their transferee CAA2s in the period that—
(a) starts immediately after the emissions return period of the last emissions

return submitted for the CAA1s of the first transmission; and
(b) ends on the date of transmission of the final transmission.

(3) The EPA must do so by acting under section 194AB(2) to (5), which applies 25
with any required modifications, to the extent required to—
(a) calculate that liability and entitlement; and
(b) amend the register kept under section 57, and the records of carbon

accounting areas kept under section 188(2), to record that the trans-
feree is a participant in the relevant activity on the transferee CAA2s. 30

(4) The EPA must also act under section 194AB(2) to (5), which applies with
any required modifications, to the extent required to do 1 or both of the follow-
ing for any transferor CAA2s that derive, during the first or any other transmis-
sion, from the land in the CAA1s of the first transmission:
(a) calculate the liability and entitlement of the transferor of the transferor 35

CAA2; and
(b) amend the register kept under section 57, and the records of carbon

accounting areas kept under section 188(2), to record that the trans-
feror is a participant in the relevant activity on the transferor CAA2.

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Application to reconfigure carbon accounting areas for standard or permanent
forestry

194CA Application to reconfigure carbon accounting areas for standard or
permanent forestry

(1) A participant in an activity of standard forestry or permanent forestry may 5
apply to reconfigure any of the carbon accounting areas for the activity.

(2) The application must—
(a) specify the activity; and
(b) specify the land to which the application relates, which must be 1 or

more whole carbon accounting areas for the activity (each a CAA1); and 10
(c) include a final forestry emissions return prepared under section 189BA

for the activity—
(i) that covers the CAA1s; and
(ii) that uses the date on which the application is submitted to the EPA

as the relevant date; and 15
(d) include in that return a new unit balance report prepared under section

189EA for the activity that covers 1 or more carbon accounting areas
(CAA2s) consisting of all the same land in the CAA1s.

(3) The application must also—
(a) be signed by the applicant; and 20
(b) be submitted—

(i) in the prescribed manner and format; and
(ii) together with the prescribed fee (if any); and
(iii) together with the prescribed information (if any).

(4) However, subsection (1) is subject to the following provisions (which limit 25
reconfiguration):
(a) section 194FC(5) (carbon accounting areas (averaging)):
(b) section 194HD (P89 offsetting (approved) land):
(c) section 194PE (temporary adverse event land).

194CB Criteria to reconfigure carbon accounting areas for standard or 30
permanent forestry

(1) If a person submits an application under section 194CA (for a participant in
an activity of standard forestry or permanent forestry to reconfigure carbon
accounting areas for the activity), the EPA,—
(a) if satisfied that the criteria in subsection (2) are met, must approve the 35

application; or
(b) otherwise, may decline the application.

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(2) The criteria are—
(a) that the application complies with section 194CA; and
(b) that the applicant has paid any prescribed fees or charges; and
(c) that any other criteria prescribed in regulations made under section

168(1)(na) are met. 5
(3) In considering the application, the EPA must treat the land to which it relates as

post-1989 forest land.

194CC Approval of application to reconfigure carbon accounting areas for
standard or permanent forestry

(1) This section applies if the EPA approves a person’s application under section 10
194CA (for a participant in an activity of standard forestry or permanent for-
estry to reconfigure carbon accounting areas for the activity).

(2) Starting on the day on which the application was submitted to the EPA,—
(a) the emissions return for the CAA1s is treated as being submitted (so that

the total liability or entitlement has effect, and the unit balance is 15
updated, for the CAA1s under section 189DA); and

(b) the person is a participant in the activity on the CAA2s (instead of the
CAA1s); and

(c) the person is not liable to surrender the unit balance of each CAA1; and
(d) the unit balance of each CAA2 is the opening unit balance calculated for 20

it in the new unit balance report.
(3) The EPA must amend the register kept under section 57, and the records of car-

bon accounting areas kept under section 188(2), to record the effects of this
section.

194CD Restriction start date of reconfigured carbon accounting area for 25
permanent forestry

(1) This section applies if a person reconfigures carbon accounting areas for per-
manent forestry by approval of an application under section 194CA.

(2) For the purposes of section 194EA, the restriction start date of a CAA2 is the
latest restriction start date of the CAA1s that overlap with the CAA2 (because 30
any land in the CAA1 became land in the CAA2).

Application to change activity on post-1989 forest land

194DA Application to change activity on post-1989 forest land
(1) A participant in an initial activity on any post-1989 forest land may apply to

become a participant in a final activity on any of the land (to carry over the unit 35
balances of carbon accounting areas from the initial activity to the final activ-
ity).

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Change from standard or permanent forestry
(2) If the initial activity is standard forestry or permanent forestry, the application

must—
(a) specify the initial activity and the final activity; and
(b) specify the land to which the application relates, which must be 1 or 5

more whole carbon accounting areas for the initial activity (each a
CAA1); and

(c) include a final forestry emissions return prepared under section 189BA
for the initial activity—
(i) that covers the CAA1s; and 10
(ii) that uses the date on which the application is submitted to the EPA

as the relevant date; and
(iii) that includes any liability or entitlement required to be included

by section 194DF(4) or 194DG(4); and
(d) include in that return a new unit balance report prepared under section 15

189EA for the final activity that covers the following 1 or more carbon
accounting areas (each a CAA2):
(i) CAA2s that have the same boundaries as the CAA1s, to the extent

that subparagraph (ii) does not apply; or
(ii) if the clear-fell exception applies and any land that is now in 1 or 20

more CAA1s was clear-felled after the forest sink covenant was
terminated,—
(A) a CAA2 for all of the land that was clear-felled; and
(B) a CAA2 for each CAA1 to the extent it was not clear-felled.

Change from PFSI activity 25
(3) If the initial activity is PFSI activity, the application must—

(a) specify the initial activity and the final activity for each CAA2 under
paragraph (d); and

(b) specify the land to which the application relates (the PFSI land), which
must be all of the forest land that a forest sink covenant is registered 30
against; and

(c) include an emissions return prepared under section 194DD for the ini-
tial activity that covers the PFSI land (including any liability required to
be included by section 194DEA(5)); and

(d) include in that return a new unit balance report prepared under section 35
194DE for each final activity that covers the following carbon account-
ing areas (each a CAA2):
(i) if the final activity for any of the land is standard forestry, one

CAA2 for all of that land:

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(ii) if the final activity for any of the land is permanent forestry, one
CAA2 for all of that land, unless subparagraph (iii) applies:

(iii) if the final activity for any of the land is permanent forestry (the
PF land) and any of the PF land was clear-felled after the forest
sink covenant was terminated,— 5
(A) one CAA2 for all of the PF land that was clear-felled; and
(B) one CAA2 for the rest of the PF land.

General provisions
(4) The application must also—

(a) be signed by the applicant; and 10
(b) be submitted—

(i) in the prescribed manner and format; and
(ii) together with the prescribed fee (if any); and
(iii) together with the prescribed information (if any).

(5) The following table specifies the matters referred to in this section (under the 15
relevant headings):
Previous activity Initial activity Final activity Clear-fell exception

PFSI activity Standard forestry
PFSI activity Permanent forestry Exception applies
Standard forestry Permanent forestry

PFSI activity Standard forestry Permanent forestry Exception applies
Permanent forestry Standard forestry

(6) As indicated in the table, the clear-fell exception applies to—
(a) a change from PFSI activity (initial activity) to permanent forestry (final

activity):
(b) a change from standard forestry (initial activity) to permanent forestry 20

(final activity), if the activity on the land was previously changed from
PFSI activity (previous activity) to standard forestry under this section.

194DB Criteria to change activity on post-1989 forest land
(1) If a person submits an application under section 194DA (for a participant in

an initial activity on post-1989 forest land to become a participant in a final 25
activity on the land), the EPA,—
(a) if satisfied that the criteria in subsection (2) are met, must approve the

application; or
(b) otherwise, may decline the application.

(2) The criteria are— 30
(a) that the application complies with section 194DA; and
(b) that the applicant has paid any prescribed fees or charges; and

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(c) if the initial activity is PFSI activity, that the EPA is satisfied that the
person would (if appropriate) qualify to be registered as a participant in
respect of the land under section 187; and

(d) that any other criteria prescribed in regulations made under section
168(1)(na) are met. 5

(3) In considering the application,—
(a) if the initial activity is standard forestry or permanent forestry, the EPA

must treat the land to which the application relates as post-1989 forest
land; or

(b) if the initial activity is PFSI activity, the EPA must treat the forest land to 10
which the application relates as post-1989 forest land.

194DC Approval of application to change activity on post-1989 forest land
(1) This section applies if the EPA approves a person’s application under section

194DA (for a participant in an initial activity on post-1989 forest land to
become a participant in a final activity on the land). 15

(2) If the initial activity is standard forestry or permanent forestry, then, starting on
the day on which the application was submitted to the EPA,—
(a) the emissions return for the CAA1s is treated as being submitted (so that

the total liability or entitlement has effect, and the unit balance is
updated, for the CAA1s under section 189DA); and 20

(b) the person ceases to be a participant in the initial activity on the CAA1s;
and

(c) the person becomes a participant in the final activity on the CAA2s; and
(d) the person is not liable to surrender the unit balance of each CAA1; and
(e) the unit balance of each CAA2 is the opening unit balance calculated for 25

it in the new unit balance report.
(3) If the initial activity is PFSI activity, then, starting on the day on which the

application was submitted to the EPA,—
(a) the forest sink covenant registered against the PFSI land is terminated;

and 30
(b) for each CAA2, the person becomes a participant in the final activity

specified for that CAA2 in the application; and
(c) the unit balance of each CAA2 is the opening unit balance calculated for

it in the new unit balance report.
(4) The EPA must amend the register kept under section 57, and the records of car- 35

bon accounting areas kept under section 188(2), to record the effects of this
section.

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194DD Emissions return for application to change from PFSI activity
(1) An emissions return prepared under this section must—

(a) specify the PFSI land that the return covers; and
(b) specify that the person carried out PFSI activity on the PFSI land; and
(c) set out the calculation under subsection (2) of the person’s liability or 5

entitlement for emissions and removals from the PFSI land while the for-
est sink covenant was registered against it.

(2) A person’s liability or entitlement for the PFSI land (g) is calculated as fol-
lows:

g = (r − e) − s 10
where—
r is the number of units transferred by the Crown in respect of the PFSI

land while the forest sink covenant was registered against it
e is the number of units transferred to the Crown in respect of the PFSI

land while the forest sink covenant was registered against it 15
s is the number of units the person is liable to surrender under section

194DEA.
(3) The emissions return must—

(a) include the prescribed information (if any); and
(b) be signed by the participant; and 20
(c) when submitted under the relevant provision, be submitted—

(i) in the prescribed manner and format; and
(ii) together with the prescribed fee (if any); and
(iii) together with the prescribed information (if any).

194DE New unit balance report for application to change from PFSI activity 25
(1) A new unit balance report prepared under this section must—

(a) specify the CAA2 that the report covers (if there is only 1), or specify
and define each CAA2 that the report covers; and

(b) specify the PFSI land (which will form the CAA2 or CAA2s); and
(c) set out the calculation under this section of the opening unit balance of 30

the CAA2 or each CAA2.
(2) If there is only one CAA2 (formed from all the PFSI land), the opening unit

balance of the CAA2 (v) is calculated as the person’s liability or entitlement
for the PFSI land (under the emissions return for the PFSI land that includes
the report). 35

(3) If there are two CAA2s, the opening unit balance of a CAA2 (v) is calculated
as follows:

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v = g × (a ÷ b)
where—
g is the person’s liability or entitlement for the PFSI land (under the emis-

sions return for the PFSI land that includes the report)
a is the area of the CAA2 (in hectares) 5
b is the area of the PFSI land (in hectares).

194DEA Liability to surrender units on transfer from PFSI activity to standard
forestry in carbon accounting area (averaging)

(1) This section applies if—
(a) a person submits an application under section 194DA; and 10
(b) the initial activity is PFSI activity and the final activity is standard for-

estry; and
(c) on the constitution date for any CAA2, any land in it (area A) will have

a determined carbon stock greater than its nominal average carbon stock.
(2) If the EPA accepts the application, the person is liable to surrender the number 15

of units (s) calculated as follows:
s = (d − n) × a

where—
d is the determined carbon stock of area A, determined as if it were in a

carbon accounting area (averaging) (in tonnes per hectare) 20
n is what the nominal average carbon stock for area A will be when CAA2

is constituted (in tonnes per hectare)
a is the area (in hectares) of area A.

(3) If CAA2 will have 2 or more areas of land that the regulations require to be
treated separately for the purpose of determining their nominal average carbon 25
stock or determined carbon stock (or both), subsection (2) applies separately
in respect of each area.

(4) However, if the s calculated under subsection (2), or the sum of each s where
subsection (3) applies, is greater than the result of deducting e from r in the
calculation under section 194DD(2), then s is recalculated as that result 30
(r − e).

(5) The liability to surrender units under this section—
(a) is to be treated as a liability for emissions for the PFSI land; and
(b) must be included in the emissions return under section 194DA(3)(c) as

part of the calculation under section 194DD of the person’s liability or 35
entitlement for the land.

(6) In this section, terms defined in section 194FA have the meanings given in
that section.

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194DF Liability to surrender units on transfer from permanent forestry to
standard forestry in carbon accounting area (averaging)

(1) This section applies if—
(a) a person submits an application under section 194DA; and
(b) the initial activity is permanent forestry and the final activity is standard 5

forestry; and
(c) on the constitution date for any CAA2, any land in it (area A) will have

a determined carbon stock greater than its nominal average carbon stock.
(2) If the EPA accepts the application, the person is liable to surrender the number

of units (s) calculated as follows: 10
s = (d − n) × a

where—
d is the determined carbon stock of area A, determined as if it were in a

carbon accounting area (averaging) (in tonnes per hectare)
n is what the nominal average carbon stock for area A will be when CAA2 15

is constituted (in tonnes per hectare)
a is the area (in hectares) of area A.

(3) If CAA2 will have 2 or more areas of land that the regulations require to be
treated separately for the purpose of determining their nominal average carbon
stock or determined carbon stock (or both), subsection (2) applies separately 20
in respect of each area.

(4) The liability to surrender units under subsection (2)—
(a) is to be treated as a liability for emissions for the CAA1 that includes

area A during the emissions return period for the emissions return under
section 194DA(2)(c); and 25

(b) must be included in that emissions return as part of the calculation under
section 189CA of the person’s gross liability or entitlement required by
section 189BA(1)(c)(iii).

(5) In this section, terms defined in section 194FA have the meanings given in
that section. 30

194DG Liability to surrender units on transfer from standard forestry in carbon
accounting area (averaging) to permanent forestry

(1) This section applies if—
(a) a person submits an application under section 194DA; and
(b) the initial activity is standard forestry and the final activity is permanent 35

forestry; and
(c) any land (area A) in a CAA1 that is a carbon accounting area (averag-

ing)—

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(i) has a subsequent rotation forest; and
(ii) has a determined carbon stock that is less than the nominal aver-

age carbon stock for area A.
(2) If the EPA accepts the application, the person is liable to surrender the number

of units (s) calculated as follows: 5
s = (n − d) × a

where—
n is the nominal average carbon stock for area A (in tonnes per hectare)
d is the determined carbon stock of area A (in tonnes per hectare)
a is the area (in hectares) of area A. 10

(3) If a CAA1 has 2 or more areas of subsequent rotation forest that the regulations
require to be treated separately for the purpose of determining their nominal
average carbon stock or determined carbon stock (or both), subsection (2)
applies separately in respect of each area.

(4) The liability to surrender units under subsection (2)— 15
(a) is to be treated as a liability for emissions for CAA1 during the emis-

sions return period for the emissions return under section
194DA(2)(c); and

(b) must be included in that emissions return as part of the calculation under
section 189CA of the person’s gross liability or entitlement required by 20
section 189BA(1)(c)(iii).

(5) In this section, terms defined in section 194FA have the meanings given in
that section.

Restrictions for permanent forestry land

194EA Permanent forestry period for land 25
(1) If a person becomes registered as a participant carrying out permanent forestry

in respect of any land, the permanent forestry period for the land is—
(a) an initial period of 50 years starting on the restriction start date; and
(b) any 1 or more consecutive periods of a further 25 years for which a par-

ticipant chooses the option under section 194EK(1)(a). 30
(2) The restriction start date for the land is specified by column 4 of the table,

which applies to a situation as follows:
(a) if no initial activity is specified (in column 2), it means the person

became registered for the permanent forestry without reference to any
initial activity on the land: 35

(b) if an initial activity is specified (in column 2) and no previous activity is
specified (in column 1), it means—

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(i) the person became registered for the permanent forestry by
acceptance of an application under section 194DA to change
from the initial activity; and

(ii) the person previously became registered for the initial activity
without reference to any previous activity: 5

(c) if an initial activity is specified (in column 2) and a previous activity is
specified (in column 1), it means—
(i) the person became registered for the permanent forestry by

acceptance of an application under section 194DA to change
from the initial activity; and 10

(ii) the person previously became registered for the initial activity by
acceptance of an application under section 194DA to change
from the previous activity.

(3) However, as indicated in column 5 of the table, the restriction start date is the
registration date for the CAA2 formed from clear-felled land if— 15
(a) the clear-fell exception applied in the application under section 194DA

to change from the initial activity; and
(b) any of the land in the application was clear-felled after the forest sink

covenant was terminated.
(4) After any land’s permanent forestry period has started, its permanent forestry 20

period—
(a) may change under section 194CD (if carbon accounting areas are

reconfigured); but
(b) does not change if the land becomes part of a new carbon accounting

area when— 25
(i) a person ceases to be a participant on other land because of sec-

tion 188AB (for a natural event that permanently prevents re-
establishing a forest or land cleared for best practice forest man-
agement); or

(ii) an interest is transmitted under section 192; or 30
(iii) other land is removed in accordance with section 194EC (an

exception requiring the Minister’s approval); or
(iv) any of the land in the carbon accounting area becomes temporary

adverse event land under section 194NC.
(5) In this section,— 35

covenant date means the date of registration of the forest sink covenant on
land
registration date means the date on which the person became registered as a
participant in permanent forestry on the land.

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(6) The following table contains the columns referred to in this section:
Column 1 Column 2 Column 3 Column 4 Column 5

Previous
activity

Initial
activity Final activity

Restriction
start date

Later restriction
start date (for
clear-felled land)

Permanent
forestry

Registration
date

PFSI activity Permanent
forestry

Covenant date Registration date

Standard
forestry

Permanent
forestry

Registration
date

PFSI activity Standard
forestry

Permanent
forestry

Covenant date Registration date

194EB Restriction on ceasing to be registered for permanent forestry
(1) The only ways in which a person may cease to be registered as a participant

carrying out permanent forestry in respect of any land are as follows:
(a) the person is exempted from this section by an Order in Council under 5

section 60A:
(b) a person ceases to be a participant because of—

(i) section 188AB (for a natural event that permanently prevents re-
establishing a forest or land cleared for best practice forest man-
agement); or 10

(ii) section 194QC(2)(e) (for temporary adverse event land that
becomes permanently affected land):

(c) the land becomes land for which a transferee under section 192 is
instead registered as carrying out permanent forestry (if there is a trans-
mitted interest): 15

(d) the registration is removed in accordance with section 194EC (an
exception requiring the Minister’s approval):

(e) the registration for the whole carbon accounting area that includes the
land is removed because of section 194EH (after land is deforested):

(f) after the permanent forestry period ends,— 20
(i) the EPA removes the registration under section 194EL (because

the person chooses that option, for example):
(ii) the person changes from permanent forestry to standard forestry

on the land by application under section 194DA.
(2) This section overrides any other provision of this Act. 25

194EC Minister may approve removal of land from permanent forestry
(1) This section sets out an exception by which a person can cease to be registered

as a participant carrying out permanent forestry in respect of any land (the
removal of land), whether all or part of a carbon accounting area.

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(2) The person must—
(a) first obtain the Minister’s approval in writing to the removal of land; and
(b) then apply for the removal of land under section 188AA(4)(a)(i) or

(ii) and comply with sections 191AA and 191AB or sections
191BA and 191BB (whichever apply). 5

(3) The provisions referred to in subsection (2)(b), and the provisions applied by
them, apply as if the land subject to the removal of land were forest land.

(4) The Minister may approve the removal of land only to the extent that the Min-
ister is satisfied that—
(a) it would be unreasonable in the circumstances to require the person to 10

remain registered in respect of the land; and
(b) the removal will not materially undermine the environmental integrity of

1 or both of the following:
(i) the activity of permanent forestry as a whole (not just by that per-

son): 15
(ii) the emissions trading scheme.

(5) In considering those matters, the Minister must have regard to—
(a) the desirability of minimising any compliance and administrative costs

associated with the emissions trading scheme; and
(b) the relative costs of approving or not approving the removal of land, and 20

who bears the costs; and
(c) any other matters the Minister considers relevant.

194ED Exception from prohibition on clear-felling and deforestation
(1) Sections 194EE to 194EI do not apply to—

(a) land for which a person ceases to be a participant because of— 25
(i) section 188AB (for a natural event that permanently prevents re-

establishing a forest or land cleared for best practice forest man-
agement); or

(ii) section 194QC(2)(e) (for temporary adverse event land that
becomes permanently affected land); or 30

(b) temporary adverse event land.
(2) However, if land ceases to be temporary adverse event land and section

194SC applies, sections 194EE to 194EI do apply to the land.
(3) For that purpose,—

(a) any clear-felling or deforestation that occurred while the land was tem- 35
porary adverse event land is to be treated as having occurred on the date
the land ceased to be temporary adverse event land; but

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(b) any penalty must be calculated by reference to the pre-event carbon
stock rate for the land under section 194NA(3)(d)(i).

194EE Permanent forestry land must not be clear-felled
(1) A person who is registered as a participant carrying out permanent forestry on

any land must ensure that the land is not clear-felled. 5
(2) If any of the land is clear-felled (the clear-felled land),—

(a) the person must, as soon as practicable, notify the EPA of the clear-fell-
ing; and

(b) the EPA must apply section 194EF (pecuniary penalty for clear-fell-
ing) when required by that section. 10

194EF Pecuniary penalty for clear-felling of permanent forestry land
(1) This section applies after—

(a) a person has notified the EPA of clear-felling under section 194EE(2);
and

(b) a final forestry emissions return has been submitted that covers the 1 or 15
more carbon accounting areas that include the clear-felled land.

(2) The EPA must apply to the court for a pecuniary penalty order against the per-
son for contravening section 194EE(1) unless the EPA is satisfied that the
defence applies.

(3) The court— 20
(a) must determine whether the person has contravened section 194EE(1);

and
(b) must determine whether the defence applies; and
(c) if it is satisfied that the person has contravened the provision without a

defence,— 25
(i) must make a declaration of contravention; and
(ii) must order the person to pay a pecuniary penalty to the Crown.

(4) The amount of the pecuniary penalty—
(a) must be the deemed value of the part of the forest on the clear-felled

land that was cleared or killed beyond the requirement for tree crown 30
cover from forest species of 30% or less in each hectare, as determined
in accordance with regulations; but

(b) may be reduced, at the court’s discretion, if the court is satisfied that the
person has a reasonable excuse for the contravention.

(5) In this section, defence means that— 35
(a) the clear-felling was beyond the person’s control; and
(b) the person could not reasonably have foreseen the clear-felling; and

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(c) the person could not reasonably have taken steps to prevent the clear-
felling.

194EG Regulations for pecuniary penalty for clear-felling
(1) The Governor-General may, by Order in Council made on the recommendation

of the Minister, make regulations for 1 or more of the following purposes in 5
relation to a pecuniary penalty under section 194EF:
(a) setting out how to calculate the deemed value of the part of the forest on

clear-felled land that was cleared or killed beyond the requirement for
tree crown cover from forest species of 30% or less in each hectare:

(b) specifying different factors that affect the calculation of the deemed 10
value, for example,—
(i) the area of the clear-felled land, in hectares:
(ii) the geographic region of the clear-felled land:
(iii) the forest species, or the type of forest, that was on the clear-felled

land: 15
(iv) the age or size of the forest that was on the clear-felled land:

(c) providing for any other matters contemplated by section 194EF,
necessary for its administration, or necessary for giving it full effect.

(2) Before recommending the making of regulations under this section, the Minis-
ter must— 20
(a) consider—

(i) the differences in value between forests of different types or ages
or with trees of different forest species or sizes; and

(ii) the market value of the wood and other products removed from
forests, and the historic variation in the market value; and 25

(iii) the need to assign an appropriate value for forests with no market,
or for which no market price is available, so as to deter clear-fell-
ing on all land in permanent forestry; and

(iv) any need to deem the volume of the harvest from a forest; and
(b) comply with the consultation requirements in sections 3A and 3B. 30

(3) Regulations made under this section come into force 3 months after the date of
their notification in the Gazette, or on any later date specified in the regula-
tions.

194EH Permanent forestry land must not be deforested
(1) A person who is registered as a participant carrying out permanent forestry on 35

any land must ensure that the land is not deforested.
(2) If any of the land is deforested (the deforested land),—

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(a) the person ceases to be a participant in permanent forestry in respect of
each carbon accounting area that includes any deforested land (each a
CAA1); and

(b) accordingly,—
(i) the person must notify the EPA under section 188AA(4)(b) that 5

they have ceased to carry out the activity on the CAA1s; and
(ii) sections 191AA and 191AB apply in respect of the CAA1s;

and
(c) the EPA must apply section 194EI (pecuniary penalty for deforesta-

tion). 10

194EI Pecuniary penalty for deforestation of permanent forestry land
(1) If this section applies, the EPA must apply to the court for a pecuniary penalty

order against the person for contravening section 194EH(1) unless the EPA is
satisfied that the defence applies.

(2) The court— 15
(a) must determine whether the person has contravened section 194EH(1);

and
(b) must determine whether the defence applies; and
(c) if it is satisfied that the person has contravened the provision without a

defence,— 20
(i) must make a declaration of contravention; and
(ii) must order the person to pay a pecuniary penalty to the Crown.

(3) The amount of the pecuniary penalty, in dollars (a), must be calculated as fol-
lows:

a = b × c 25
where—
b is the number of units equal to the sum of the unit balance of each CAA1

that was calculated under the last emissions return submitted for the
CAA1 before the clearing that caused the deforestation

c is the price, in dollars, of carbon per tonne on the final date on which 30
deforestation occurred, as set by or in accordance with regulations made
under section 30W.

(4) However, the amount may be reduced, at the court’s discretion, if the court is
satisfied that the person has a reasonable excuse for the contravention.

(5) In this section, defence means that— 35
(a) the deforestation was beyond the person’s control; and
(b) the person could not reasonably have foreseen the deforestation; and

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(c) the person could not reasonably have taken steps to prevent the defores-
tation.

194EJ Due dates for payment of penalties and recovery of EPA’s costs
(1) This section applies if the court orders that a person pay a pecuniary penalty

under section 194EF or 194EI. 5
(2) The court must also order that the penalty must be applied first to pay the

EPA’s actual costs in bringing the proceedings.
(3) The person must pay the penalty—

(a) within 20 working days after the date on which the order is made, or by
any later date specified by the order; or 10

(b) by the date or dates agreed under a deferred payment arrangement under
section 135A.

194EK Option must be chosen at end of permanent forestry period
(1) After the permanent forestry period ends, the participant carrying out perman-

ent forestry on post-1989 forest land must choose an option for each carbon 15
accounting area (each a CAA1) by doing 1 of the following:
(a) giving notice to the EPA that they will carry out permanent forestry on

the CAA1 for a further 25 years; or
(b) removing the CAA1 from permanent forestry by any means available

under this Act. 20
(2) The participant must choose an option before or when the first of the following

documents is submitted for the CAA1:
(a) a provisional forestry emissions return; or
(b) a final forestry emissions return under section 189AB for the manda-

tory emissions return period in which the permanent forestry period 25
ended.

(3) If the participant does not choose an option before or when submitting an emis-
sions return described by subsection (2), or does not submit the final forestry
emissions return described by subsection (2), the EPA must give notice to
the participant. 30

(4) The EPA’s notice must state—
(a) that the participant must choose an option for each CAA1 within 30

working days after the EPA gave its notice; and
(b) that a CAA1 will be removed from permanent forestry if the participant

does not choose an option for it by then. 35

194EL Removal of carbon accounting area from permanent forestry
(1) This section applies to a CAA1 if the participant does not choose an option for

the CAA1 by the deadline in the EPA’s notice given under section 194EK(3).

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(2) As a result,—
(a) the participant ceases to be a participant in permanent forestry on the

CAA1; and
(b) the participant is liable to surrender the number of units equal to the unit

balance of the CAA1 (calculated under the last emissions return submit- 5
ted for the CAA1).

(3) The EPA must amend the register kept under section 57, and the records of car-
bon accounting areas kept under section 188(2), to record the effects of this
section.

Subpart 5—Averaging accounting methodology 10

194FA Interpretation
In this subpart,—
average carbon equality, in relation to land in a carbon accounting area (aver-
aging), means that the determined carbon stock of the land is equal to the nom-
inal average carbon stock for the land 15
carbon accounting area (averaging) has the meaning given in section
194FC(3)

determined carbon stock, for land in a carbon accounting area (averaging),
means the carbon stock of the land determined in accordance with regulations
made under section 194FE 20
first rotation forest has the meaning given in section 194FD(1) and (2)
nominal average carbon stock, for land in a carbon accounting area (averag-
ing), means the expected long-term average level of carbon stock of the land
over multiple forest rotations determined in accordance with regulations made
under section 194FE 25
subsequent rotation forest has the meaning given in section 194FD(4).

194FB Averaging accounting methodology
(1) The object of averaging accounting methodology is to account for emissions

and removals from an activity of standard forestry—
(a) by reference to the expected long-term average level of carbon stock of 30

the land over multiple forest rotations, rather than by reference to short-
term changes in the actual carbon stock of the land (as required by sec-
tions 63 and 64); and

(b) in a way that achieves approximately the same result in the long term as
would have been achieved using carbon stock change accounting but 35
without the repeated receipt and surrender of units for each forest rota-
tion.

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(2) The number of units that a participant for a carbon accounting area (averaging)
is entitled to receive, or is liable to surrender, is determined by reference to the
expected long-term average carbon stock of the land over multiple forest rota-
tions and changes in that average.

(3) In general terms, the participant— 5
(a) is entitled to receive New Zealand units for removals—

(i) for land that has a first rotation forest, if—
(A) it has not reached average carbon equality; or
(B) after it reaches average carbon equality, its nominal average

carbon stock increases: 10
(ii) for land that has a subsequent rotation forest, if its nominal aver-

age carbon stock increases; and
(b) is liable to surrender units for emissions—

(i) for land that has first rotation forest and has reached average car-
bon equality, if its nominal average carbon stock decreases; or 15

(ii) for land that has subsequent rotation forest, if its nominal average
carbon stock decreases; or

(iii) in any case, if the land is deforested.

194FC Averaging accounting applies to carbon accounting areas (averaging)
(1) Averaging accounting methodology applies in respect of emissions and remov- 20

als from an activity of standard forestry on a carbon accounting area (averag-
ing).

(2) The participant in respect of a carbon accounting area (averaging)—
(a) is entitled to receive New Zealand units, and liable to surrender units, for

the emissions and removals from the activity in accordance with regula- 25
tions made under section 194FE; and

(b) if provided in the regulations, is not required to—
(i) calculate emissions and removals for which they are not liable to

surrender, or entitled to receive, units; or
(ii) submit emissions returns covering a carbon accounting area (aver- 30

aging) in relation to which they are not liable to surrender, or
entitled to receive, units.

(3) A carbon accounting area in respect of which a participant is registered in
respect of an activity of standard forestry is a carbon accounting area (aver-
aging) if— 35
(a) its constitution date is after 31 December 2021; and
(b) it was constituted—

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(i) under section 188 from land that was not part of a previous car-
bon accounting area; or

(ii) under section 194DC from land on which the initial activity was
permanent forestry or PFSI activity; or

(iii) from a reconfiguration of 1 or more carbon accounting areas 5
(averaging) (and no other land).

(4) See also clause 32 of Schedule 1AA, which allows some other carbon
accounting areas to be converted into carbon accounting areas (averaging).
Limit on reconfiguration

(5) Carbon accounting areas cannot be reconfigured (whether by application under 10
section 194CA or by any other process that requires the submission of a new
unit balance report) so as to combine in a CAA2 land from a CAA1 that is a
carbon accounting area (averaging) and land from a CAA1 that is not.

194FD First rotation forest and subsequent rotation forest
(1) Land in a carbon accounting area (averaging) has a first rotation forest if— 15

(a) the land has not been cleared since it became forest land; or
(b) the land,—

(i) having been forest land, was deforested; and
(ii) remained deforested for at least the stand-down period prescribed

in regulations made under section 194FE (but see subsection 20
(3)); and

(iii) was re-established as forest land; and
(iv) has not been cleared since that re-establishment; or

(c) the land—
(i) is post-1989 forest land because of paragraph (a)(iii) to (vii) of 25

the definition of post-1989 forest land in section 4; and
(ii) has not been cleared since it became post-1989 forest land; or

(d) the land is declared by regulations made under section 194FE to have
a first rotation forest.

(2) However, land that would otherwise have a first rotation forest under subsec- 30
tion (1) does not have a first rotation forest if it is declared by regulations
made under section 194FE to have a subsequent rotation forest.

(3) Subsection (1)(b)(ii) does not apply if the deforestation referred to in sub-
section (1)(b)(i) occurred before 1 January 2021.

(4) Land in a carbon accounting area (averaging) has a subsequent rotation forest 35
if it does not have a first rotation forest.

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194FE Regulations for averaging
(1) The Governor-General may, by Order in Council made on the recommendation

of the Minister, make regulations for 1 or more of the following purposes:
(a) prescribing—

(i) how emissions and removals from an activity of standard forestry 5
on a carbon accounting area (averaging) must be calculated and
reported:

(ii) the circumstances in which a participant is or is not liable to sur-
render units, or entitled to receive New Zealand units, for those
emissions and removals: 10

(iii) the methodology for determining the number of units the partici-
pant is entitled to receive or liable to surrender in those circum-
stances:

(b) providing that a participant for a carbon accounting area (averaging) is
not required to— 15
(i) calculate emissions and removals for which they are not liable to

surrender, or entitled to receive, units:
(ii) submit emissions returns for a carbon accounting area (averaging)

in relation to which they are not liable to surrender, or entitled to
receive, units: 20

(c) prescribing the methodology for determining—
(i) determined carbon stock (section 194FA):
(ii) nominal average carbon stock (section 194FA):

(d) for the purposes of the definition of first rotation forest (section
194FD),— 25
(i) prescribing the stand-down period:
(ii) declaring land to have a first rotation forest or a subsequent rota-

tion forest:
(e) providing for any other matters contemplated by this subpart, necessary

for its administration, or necessary for giving it full effect. 30
(2) Regulations made under this section may make different provision for different

cases on any differential basis, including—
(a) for different forest species:
(b) for forest species of different ages:
(c) for different rotation periods: 35
(d) for different parts of New Zealand.

(3) Regulations made under this section may have retrospective effect as follows:

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(a) regulations may apply from the commencement of the mandatory emis-
sions return period in which they are made or from a later date in that
period:

(b) regulations made under subsection (1)(d)(i) may prescribe a stand-down
period that begins before the regulations are made. 5

(4) However, regulations cannot be made under subsection (1)(d)(i) that would
increase the length of the stand-down period for a carbon accounting area
whose constitution date is before those regulations come into force.

(5) Regulations made under this section may require the use of a computer pro-
gramme available via the Internet site of the EPA. 10

(6) Regulations made under subsection (1)(b) may relate to emissions or remov-
als that—
(a) stem directly from an activity; or
(b) are associated with a product or other thing that is the subject of an

activity. 15
(7) See sections 3A and 3B for consultation requirements that apply to the making

of regulations under this section.
(8) See also sections 169 to 175 (incorporation by reference).
(9) Regulations made under this section come into force 3 months after the date of

their notification in the Gazette, or on any later date specified in the regula- 20
tions.

Subpart 6—P89 offsetting

194GAA Interpretation
In this subpart,—
expected carbon stock, for P89 offsetting (forested) land, has the meaning 25
given in section 194JA
P89 offset application means an application to the EPA submitted under sec-
tion 194GA

P89 offset application date means the date on which a P89 offset application
is submitted to the EPA under section 194GA 30
P89 offset date, for P89 offsetting (approved) land, has the meaning given in
section 194GC(2)(g)

P89 offset release criteria has the meaning given in section 194JA
P89 offsetting (approved) land means land that—
(a) has become P89 offsetting (approved) land under section 194GC(2)(f) 35

or 194KE(2)(c); and
(b) has not ceased to be P89 offsetting (approved) land under a provision

referred to in section 194HA

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P89 offsetting (excess) land has the meaning given in section 194JB
P89 offsetting (forested) land has the meaning given in section 194JB
P89 offsetting (unforested) land has the meaning given in section 194JB
P89 release criteria notice means a notice given under section 194JB(1)
qualifying forest land has the meaning given in section 194JB(3) 5
reference carbon stock, for a CAA1, has the meaning given in section
194GA(2)(e)

subsequent rotation forest has the meaning given in section 194FD(4).

P89 offset applications

194GA Application to offset land for land in carbon accounting area (averaging) 10
(1) A participant in an activity of standard forestry on 1 or more carbon accounting

areas (averaging) may apply to the EPA to offset other land for those areas (to
transfer the unit balance from the carbon accounting areas (averaging) to the
new land).

(2) The application must— 15
(a) specify the carbon accounting areas (averaging) to which the application

relates (each a CAA1); and
(b) specify the land proposed to be offset for each CAA1; and
(c) include a final forestry emissions return prepared under section 189BA

for the activity— 20
(i) that covers the CAA1s; and
(ii) that uses the date on which the application is submitted to the EPA

as the relevant date; and
(d) include in that return a new unit balance report prepared under section

189EA that covers 1 or more carbon accounting areas (each a CAA2) 25
for each CAA1 consisting of the land specified under paragraph (b);
and

(e) include—
(i) the carbon stock of each CAA1 on the P89 offset application date

determined in accordance with regulations made under section 30
194LA (the reference carbon stock for the CAA1); and

(ii) if the person proposed as the participant in respect of any of the
CAA2s is not already registered as a participant, the information
necessary for that person to become registered; and

(iii) any other information prescribed in regulations made under sec- 35
tion 194LA.

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(3) If the person proposed as the participant in respect of any of the CAA2s is not
the participant in respect of the CAA1s, the application must be made jointly
with that other person.

(4) The application must—
(a) be signed by all of the applicants; and 5
(b) be submitted—

(i) in the prescribed manner and format; and
(ii) together with the prescribed fee (if any); and
(iii) together with the prescribed information (if any).

194GB Criteria for P89 offset application 10
(1) If a person submits a P89 offset application, the EPA,—

(a) if satisfied that the criteria in subsection (2) were met on the P89 off-
set application date, must approve the application; or

(b) otherwise, may decline the application.
(2) The criteria are that— 15

CAA1 criteria
(a) the land in each CAA1 is 1 or both of the following:

(i) land that has a first rotation forest and has reached average carbon
equality (as defined in section 194FA):

(ii) land that has a subsequent rotation forest; and 20
(b) the forest species on each CAA1 were established by direct planting

activities, including direct seeding but excluding natural forest regenera-
tion; and
CAA2 criteria

(c) the land in each CAA2 is 1 or more of the following: 25
(i) land that is not forest land on the P89 offset application date, but

if it were to become forest land—
(A) would be post-1989 forest land; and
(B) if it were in a carbon accounting area, would meet the cri-

teria in section 194FD for having a first rotation forest: 30
(ii) post-1989 forest land that—

(A) became post-1989 forest land less than 2 years before the
P89 offset application date; and

(B) meets the criteria in section 194FD for having a first rota-
tion forest (or would do so if it were in a carbon accounting 35
area):

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(iii) area 2 (excess) land (as defined in section 186AA), unless the
re-use period prescribed in regulations made under section
194LA has expired:

(iv) P89 offsetting (excess) land, unless the re-use period prescribed in
regulations made under section 194LA has expired; and 5

(d) the total area (whether or not contiguous) of the CAA2s for a CAA1 is
equal to or greater than the area of that CAA1; and

(e) each individual parcel that makes up the CAA2 has an area of at least 1
hectare and has an average width of at least 30 metres; and
Participant criteria 10

(f) the participant in respect of each CAA2 would, if the land in the CAA2
were forest land,—
(i) if they are not already registered as a participant in the activity,

qualify to be registered under section 57; and
(ii) qualify under section 187 to be registered as a participant in 15

respect of the CAA2; and
P89 offset release criteria

(g) the EPA is satisfied that, on the P89 offset date, the P89 offset release
criteria are likely to be met in respect of each CAA1 and the CAA2s pro-
posed in respect of it; and 20
Prescribed criteria

(h) any other criteria prescribed in regulations made under section 194LA
are met.

194GC Effect of approval of P89 offset application
(1) This section applies if the EPA approves a P89 offset application. 25
(2) Starting on the P89 offset application date,—

(a) the emissions return for the CAA1s is treated as being submitted (so that
the total liability or entitlement has effect, and the unit balance is
updated, for the CAA1s under section 189DA); and

(b) if any of the land proposed to be included in a CAA2 is already in a car- 30
bon accounting area, the participant for that land—
(i) is liable to surrender the number of units equal to the unit balance

of that carbon accounting area; and
(ii) ceases to be a participant in the relevant activity on that carbon

accounting area; and 35
(c) the persons proposed as participants for CAA2s are participants in the

activity on the CAA2s; and
(d) the participant in respect of the CAA1s—

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(i) ceases to be a participant in the activity on the CAA1s; and
(ii) is not liable to surrender the unit balances of the CAA1s; and

(e) the unit balance of each CAA2 is the opening unit balance calculated for
it in the new unit balance report; and

(f) the land in the CAA2s for a CAA1 is the P89 offsetting (approved) 5
land for that CAA1; and

(g) the P89 offset date for the P89 offsetting (approved) land for a CAA1
is—
(i) if, on the P89 offset application date, every hectare of land in the

CAA1 had forest species on it that had tree crown cover of more 10
than 30%, 4 years after the P89 offset application date; or

(ii) if not, 4 years after the clearing of the CAA1 started most recently
before the P89 offset application date.

(3) The EPA must amend the register kept under section 57, and the records of car-
bon accounting areas kept under section 188(2), to record the effects of this 15
section.

(4) If subsection (2)(b)(i) applies—
(a) the notice requiring those units to be surrendered (referred to in section

63(4)) must also set out the effect of paragraph (b); and
(b) if the units are not surrendered by the due date, the EPA may revoke the 20

approval by giving written notice to the participant.
(5) If an approval is revoked under subsection (4), this Act applies as if the

application had never been made.
(6) However, despite subsection (5), the effect of subsection (2)(b)(ii) is not

reversed (so the person is not reinstated as a participant for the carbon account- 25
ing area).

P89 offsetting (approved) land

194HA Duration of P89 offsetting (approved) land status
(1) Land that becomes P89 offsetting (approved) land for a CAA1 under section

194GC(2)(f) remains P89 offsetting (approved) land until one of the following 30
occurs:
(a) the land meets the P89 offset release criteria and is released from being

P89 offsetting (approved) land on the P89 offset date under section
194JF(2)(c):

(b) the person ceases to be a participant because of section 188AB (for a 35
natural event that permanently prevents re-establishing a forest):

(c) the land becomes temporary adverse event land under section 194NC:

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(d) the land is P89 offsetting (unforested) land and ceases to be P89 offset-
ting (approved) land under section 194JF(2)(d):

(e) the land is P89 offsetting (excess) land and ceases to be P89 offsetting
(approved) land under section 194JF(2)(e):

(f) the land is declared to not be P89 offsetting (approved) land under sec- 5
tion 194KA(3) and ceases to be so under section 194KB(2)(a):

(g) the land is removed land and ceases to be P89 offsetting (approved) land
under section 194KE(2)(d).

(2) To avoid doubt, the land continues to be P89 offsetting (approved) land even if
the carbon accounting areas containing the land are reconfigured (whether 10
under section 194CC or by any other process that requires the submission of
a new unit balance report).

194HB Effect of being P89 offsetting (approved) land
All of the provisions of this Act that apply to post-1989 forest land that is in a
carbon accounting area (averaging) apply to P89 offsetting (approved) land as 15
if it were post-1989 forest land, subject to sections 194HC and 194HD.

194HC Subsequent rotation forest
(1) P89 offsetting (approved) land is to be treated as having a subsequent rotation

forest (despite section 194FD(1)).
(2) Subsection (1) continues to apply to P89 offsetting (forested) land (identified 20

under section 194JB) until—
(a) it is first cleared after the P89 offset date (even though it ceases to be

P89 offsetting (approved) land on the P89 offset date); or
(b) the participant becomes registered for an activity of permanent forestry

on the land. 25
(3) To avoid doubt, when subsection (1) ceases to apply to any land, section

194FD applies.

194HD Reconfiguration restrictions
(1) A carbon accounting area containing P89 offsetting (approved) land cannot be

reconfigured (whether by application under section 194CA or by any other 30
process that requires the submission of a new unit balance report) except as
permitted by subsection (2).

(2) Reconfiguration is permitted—
(a) to reconfigure the carbon accounting areas that contain the P89 offset-

ting (approved) land for the same CAA1 without including any other 35
land:

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(b) to remove land that is affected by a natural event that permanently pre-
vents re-establishing a forest in accordance with sections 188AB and
191BA:

(c) to remove land that becomes temporary adverse event land under sec-
tion 194NC: 5

(d) on the P89 offset date as required under section 194JB:
(e) to substitute land under sections 194KC to 194KE.

194HE No transfers to permanent forestry
A participant for a carbon accounting area containing P89 offsetting (approved)
land cannot apply under section 194DA to become a participant in an activity 10
of permanent forestry on that land.

Offsetting on P89 offset date

194JA P89 offset release criteria
(1) The P89 offset release criteria in respect of a CAA1 and its P89 offsetting

(approved) land that is P89 offsetting (forested) land are that, on the P89 offset 15
date,—
(a) the area of the P89 offsetting (forested) land is equal to or greater than

the area of CAA1; and
(b) the expected carbon stock of the P89 offsetting (forested) land is equal to

or greater than the reference carbon stock of the CAA1; and 20
(c) any other criteria prescribed in regulations made under section 194LA

are met.
(2) The expected carbon stock of land is the carbon stock (determined in accord-

ance with regulations made under section 194LA) that the land is expected to
have achieved at the end of the period prescribed in regulations made under 25
that section.
Adjustment if adverse event

(3) If any of the P89 offsetting (approved) land ceases to be P89 offsetting
(approved) land under section 194HA(1)(b) or (c) (because of adverse
events) on or before the P89 offset date,— 30
(a) for subsection (1)(a), the area of the CAA1 on the P89 offset applica-

tion date is to be treated as reduced in accordance with subsection (4);
and

(b) for subsection (1)(b), the reference carbon stock for the CAA1 is to be
treated as reduced in accordance with subsection (5). 35

(4) The reduced area of the CAA1 (in hectares) (y) is calculated as follows:
y = a × (j ÷ k)

where—

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a is the area of the CAA1 on the P89 offset application date (in hectares)
j is the area of the land that ceased to be P89 offsetting (approved) land

under section 194HA(1)(b) or (c) (in hectares)
k is the area of the P89 offsetting (approved) land on the P89 offset appli-

cation date (being all of the CAA2s under section 194GA) (in hec- 5
tares).

(5) The reduced reference carbon stock for the CAA1 (in tonnes) (w) is calculated
as follows:

w = c × (j ÷ k)
where— 10
c is the reference carbon stock for the CAA1 (in tonnes)
j is the area of the land that ceased to be P89 offsetting (approved) land

under section 194HA(1)(b) or (c) (in hectares)
k is the area of the P89 offsetting (approved) land on the P89 offset appli-

cation date (being all of the CAA2s under section 194GA) (in hec- 15
tares).

194JB P89 release criteria notice
(1) The participants in an activity of standard forestry on the P89 offsetting

(approved) land for a CAA1 on the P89 offset date must give notice (P89
release criteria notice) to the EPA of the extent of compliance with the P89 20
offset release criteria on the P89 offset date.

(2) The P89 release criteria notice must—
(a) identify all of the P89 offsetting (approved) land that is each of the fol-

lowing:
(i) P89 offsetting (forested) land, being all the P89 offsetting 25

(approved) land that is qualifying forest land on the P89 offset
date, other than P89 offsetting (excess) land:

(ii) P89 offsetting (unforested) land, being all the P89 offsetting
(approved) land that is not qualifying forest land on the P89 offset
date: 30

(iii) P89 offsetting (excess) land, being any P89 offsetting (approved)
land that—
(A) is qualifying forest land on the P89 offset date; and
(B) does not need to be part of the P89 offsetting (forested) land

in order for the P89 offset release criteria to be met; and 35
(C) the participants want to be excluded from the P89 offsetting

(forested) land and to be available for re-use under section
186BB(2)(b)(iv) or 194GB(2)(c)(iv); and

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(b) include final forestry emissions returns under section 189BA for each
participant and activity—
(i) that covers each carbon accounting area that contains the P89 off-

setting (approved) land (each a CAA3); and
(ii) that uses the P89 offset date as the relevant date; and 5

(c) include in each return a P89 offset date unit balance report under sec-
tion 194JE that covers the following carbon accounting areas (each a
CAA4) formed from each CAA3:
(i) 1 or more forested CAA4s for the P89 offsetting (forested) land

in the CAA3: 10
(ii) an unforested CAA4 for any P89 offsetting (unforested) land in

the CAA3:
(iii) 1 or more excess CAA4s for any P89 offsetting (excess) land in

the CAA3; and
(d) include any information prescribed in regulations made under section 15

194LA.
(3) Land is qualifying forest land if—

(a) each hectare of land has forest species on it that have, or are likely to
have, tree crown cover of more than 30%; and

(b) those forest species were established by direct planting activities, includ- 20
ing direct seeding but excluding natural forest regeneration; and

(c) each individual parcel that makes up the land has an area of at least 1
hectare and has an average width of at least 30 metres; and

(d) the land has not been declared not to be qualifying forest land under
section 194KA(2). 25

(4) The P89 release criteria notice must—
(a) be made jointly by the participants in respect of all of the P89 offsetting

(approved) land for the CAA1; and
(b) be signed by all of the participants; and
(c) be given within 60 working days after the P89 offset date; and 30
(d) be given—

(i) in the prescribed manner and format; and
(ii) together with the prescribed fee (if any); and
(iii) together with the prescribed information (if any).

(5) In relation to a final forestry emissions return required by subsection (2)(b), 35
sections 189BA to 189DA apply as if the references in those sections to
CAA1 were references to CAA3.

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194JC Liability to surrender units if P89 offset release criteria not met
(1) This section applies in relation to the CAA3s for a CAA1 if the P89 offset

release criteria under either or both of paragraphs (a) and (b) of section
194JA(1) are not met.

(2) The participants for the CAA3 are liable to surrender the number of units deter- 5
mined under subsections (4) to (6).

(3) That liability is apportioned between the CAA3s under section 194JD.
Liability for area insufficiency

(4) If the criterion in section 194JA(1)(a) is not met, the number of units to be
surrendered (sa) is calculated as follows: 10

sa = [(c − d) ÷ c] × u
where—
c is the area of the CAA1 on the P89 offset application date (reduced

under section 194JA(3) if applicable) (in hectares)
d is the total area of all of the P89 offsetting (forested) land for the CAA1 15

(in hectares)
u is the unit balance of the CAA1 in the emissions return that accompanied

the application under section 194GA.
Liability for carbon insufficiency

(5) If the criterion in section 194JA(1)(b) is not met, the number of units to be 20
surrendered (sc) is calculated as follows:

sc = (e − f)
where—
e is the reference carbon stock for the CAA1 (reduced under section

194JA(3) if applicable) (in tonnes) 25
f is the total expected carbon stock of all of the P89 offsetting (forested)

land for the CAA1 (in tonnes).
Total liability

(6) The total liability under this section (t) is calculated as follows:
t = sa + sc 30

194JD Maximum liability and apportionment
(1) This section applies if the participants for the CAA3s for a CAA1 have a liabil-

ity under section 194JC.
One CAA3

(2) If there is only one CAA3,— 35
(a) section 190 applies; and
(b) the liability for that CAA3 is equal to t under section 194JC(6).

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Two or more CAA3s: maximum liability
(3) If there are 2 or more CAA3s,—

(a) section 190 does not apply; but
(b) if the total liability calculated under section 194JC(6) (t) is greater

than the total of the unit balances of all of the CAA3s, t is reduced to be 5
equal to that total unit balance.

Two or more CAA3s: apportionment
(4) If there are 2 or more CAA3s, the liability for each CAA3 (k) is calculated as

follows:
k = t × (a3 ÷ b3) 10

where—
t is the total liability under section 194JC(6), reduced under subsec-

tion (3) if applicable
a3 is the area of the CAA3 (in hectares)
b3 is the total area of all of the CAA3s (in hectares). 15

194JE P89 offset date unit balance report
(1) A P89 offset date unit balance report required by section 194JB(2)(c)

must—
(a) specify the CAA4s that the report covers and, for each CAA4 whose

boundaries are not the same as a CAA3, define the CAA4; and 20
(b) specify the CAA3s (whose land will form the CAA4s); and
(c) specify the opening unit balance of each unforested CAA4 and each

excess CAA4 (if any) as zero; and
(d) set out the calculation under subsection (2) of the opening unit balance

of each forested CAA4. 25
(2) The opening unit balance of a forested CAA4 (v) is calculated as follows:

v = (u − k) × (a4 ÷ b4)
where—
u is the unit balance of the CAA3 in the emissions return under section

194JB(2)(b) 30
k is,—

(a) if there is only one CAA4, zero; or
(b) if there are 2 or more CAA4s, the liability of the CAA3 under

section 194JD

a4 is the area of the forested CAA4 (in hectares) 35
b4 is the total area of all of the P89 offsetting (forested) land for the CAA1

(in hectares).

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194JF Effect on P89 offset date
(1) This section applies if a P89 release criteria notice is given to the EPA in

accordance with section 194JB, including a final forestry emissions return
(for the CAA3s) and P89 offset date unit balance report (for the CAA4s).

(2) Starting on the P89 offset date,— 5
(a) the emissions return for the CAA3s is treated as being submitted (so that

the total liability or entitlement has effect, and the unit balance is
updated, for the CAA3s under section 189DA); and

(b) the participants are not liable to surrender the unit balances of each
CAA3 (although they may be liable to surrender units under section 10
194JC); and

(c) for each forested CAA4,—
(i) the person who was the participant in respect of the CAA3 from

which it was formed is the participant in respect of the forested
CAA4 (instead of the CAA3); and 15

(ii) the land in the forested CAA4 is released from being P89 offset-
ting (approved) land; and

(iii) the unit balance of each forested CAA4 is the opening unit bal-
ance calculated for it in the P89 offset date unit balance report;
and 20

(d) for each unforested CAA4,—
(i) the person who was the participant in respect of the CAA3 from

which it was formed ceases to be a participant in respect of the
unforested CAA4; and

(ii) the land in the unforested CAA4 ceases to be P89 offsetting 25
(approved) land; and

(iii) the unit balance of each unforested CAA4 is zero; and
(e) for each excess CAA4,—

(i) the person who was the participant in respect of the CAA3 from
which it was formed is the participant in respect of the excess 30
CAA4; and

(ii) the land in the excess CAA4 ceases to be P89 offsetting
(approved) land; and

(iii) the unit balance of each unforested CAA4 is zero.
(3) The EPA must amend the register kept under section 57, and the records of car- 35

bon accounting areas kept under section 188(2), to record the effects of this
section.

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(4) After the P89 offset date, section 179(1) (except subsection (1)(a)) applies
to the P89 offsetting (forested) land as if it had been cleared on the P89 offset
application date.

(5) Subsection (4) ceases to apply when that land is next cleared (after which
section 179 will apply). 5

Action if criteria for initial P89 offset application not met

194KA EPA may take action if original criteria not met
(1) This section applies if the EPA—

(a) approved a P89 offset application; but
(b) is now satisfied that the application should not have been approved 10

because some or all of the P89 offsetting (approved) land did not meet
the criteria in section 194GB(2)(c) or (e) or any applicable criteria
prescribed for section 194GB(2)(h).

Action on or before P89 offset date
(2) If this section applies to land on or before the P89 offset date, the EPA may 15

declare that the land that did not meet those criteria is not qualifying forest land
for the purposes of section 194JB.
Action after P89 offset date

(3) If this section applies to land after the P89 offset date, the EPA may declare
that the whole of the carbon accounting area that now contains the land that did 20
not meet those criteria is not P89 offsetting (approved) land.
Procedure

(4) The EPA cannot make a declaration under this section more than 7 years after
the P89 offset application date.

(5) Before making a declaration, the EPA must— 25
(a) notify the participant of its intention to do so and the grounds for doing

so; and
(b) give the participant at least 60 working days to—

(i) show cause as to why the EPA should not do so; or
(ii) take other remedial action specified in the notice (see section 30

194KC).
(6) If the EPA makes a declaration under this section, it must give the participant

notice of—
(a) the declaration and the date on which it was made; and
(b) the participant’s liability under section 194KB; and 35
(c) the participant’s right under section 144 to seek a review of the decision

to make the declaration.

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194KB Effect of declaration after P89 offset date
(1) This section applies if the EPA makes a declaration under section 194KA(3)

that a carbon accounting area is not P89 offsetting (approved) land (the CAA).
(2) Starting on the date on which the declaration is made,—

(a) the land ceases to be P89 offsetting (approved) land; and 5
(b) the person ceases to be a participant in the activity on the CAA; and
(c) the person is liable to surrender the number of units equal to the unit bal-

ance of the CAA.
(3) The EPA must amend the register kept under section 57, and the records of car-

bon accounting areas kept under section 188(2), to record the effects of this 10
section.

194KC Remedial action: land substitution
(1) In a notice under section 194KA(5), the EPA may give the participant the

option to take remedial action by substituting other land for land that did not
meet the criteria (the non-compliant land). 15

(2) A participant given that option may apply to the EPA to do so.
(3) The application must—

(a) specify the carbon accounting areas (each a CAA5) that include the non-
compliant land for which other land is to be substituted; and

(b) identify all the land in each CAA5 as either— 20
(i) removed land, being the non-compliant land for which other land

is to be substituted; or
(ii) remaining land, being all the land in the CAA5 that is not

removed land; and
(c) identify the land that is proposed to be substituted for the removed land 25

(substitute land); and
(d) include a final forestry emissions return prepared under section 189BA

for the relevant activity—
(i) that covers the CAA5s; and
(ii) that uses the date on which the application is submitted to the EPA 30

as the relevant date; and
(e) include in that return a new unit balance report that—

(i) relates to the following carbon accounting areas (each a CAA6):
(A) a removed CAA6 for the removed land:
(B) a remaining CAA6 for the remaining land: 35
(C) a substitute CAA6 for the substitute land; and

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(ii) specifies the opening unit balance of the removed CAA6 as zero;
and

(iii) calculates the opening unit balance for the remaining CAA6s and
substitute CAA6s in accordance with section 189EA(4), which
applies even though a CAA6 is formed from land in 1 or more 5
CAA5s and from other land; and

(iv) is otherwise prepared under section 189EA; and
(f) include any information prescribed in regulations made under section

194LA.
(4) The application must— 10

(a) be signed by the participant; and
(b) be given within the period specified in the notice under section

194KA(5); and
(c) be given—

(i) in the prescribed manner and format; and 15
(ii) together with the prescribed fee (if any); and
(iii) together with the prescribed information (if any).

(5) In relation to the final forestry emissions return and new unit balance report
required by subsection (3)(d) and (e), sections 189BA to 189EA apply
as if— 20
(a) the references in those sections to CAA1 were references to CAA5; and
(b) the references in those sections to CAA2 were references to CAA6.

194KD Criteria for land substitution
(1) If a person submits an application under section 194KC to substitute land, the

EPA,— 25
(a) if satisfied that the criteria in subsection (2) are met, must approve the

application; or
(b) otherwise, may decline the application.

(2) The criteria are that—
(a) the substitute land is land of a kind specified in 1 or more of subpara- 30

graphs (i) to (iv) of section 194GB(2)(c); and
(b) the area of the substitute land is equal to or greater than the area of the

removed land; and
(c) the EPA is satisfied that,—

(i) if the substitution date is before the P89 offset date, the P89 offset 35
release criteria are likely to be met in respect of the CAA1 and the
new P89 offsetting (approved) land; or

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(ii) if the substitution date is on or after the P89 offset date, the expec-
ted carbon stock of the new P89 offsetting (approved) land as at
the substitution date was equal to or greater than the reference car-
bon stock of the CAA1; and

(d) any other criteria prescribed in regulations made under section 194LA 5
are met.

(3) In this section,—
new P89 offsetting (approved) land means all of the land that will be P89 off-
setting (approved) land for the CAA1 if the application is approved
substitution date means the date on which the application under section 10
194KC was submitted.

194KE Effect of approval of land substitution
(1) This section applies if the EPA approves an application under section 194KD.
(2) Starting on the date on which the application was submitted,—

(a) the emissions return for the CAA5s is treated as being submitted (so that 15
the total liability or entitlement has effect, and the unit balance is
updated, for the CAA5s under section 189DA); and

(b) if any of the land in a substitute CAA6 is already in a carbon accounting
area, the participant for that land—
(i) is liable to surrender the number of units equal to the unit balance 20

of that carbon accounting area; and
(ii) ceases to be a participant in the relevant activity on that carbon

accounting area; and
(c) in respect of the remainder CAA6s and substitute CAA6s,—

(i) the person becomes a participant in the activity on those CAA6s 25
(instead of the CAA5s); and

(ii) the unit balance of each of those CAA6s is the opening unit bal-
ance calculated for it in the new unit balance report; and

(iii) the land in those CAA6s is P89 offsetting (approved) land for the
original CAA1 (together with any P89 offsetting (approved) land 30
for the CAA1 that was not included in this application); and

(d) in respect of each removed CAA6,—
(i) the person ceases to be a participant in the activity of the removed

CAA6; and
(ii) the land ceases to be P89 offsetting (approved) land; and 35
(iii) the person is not liable to surrender units (because the unit balance

is zero).
(3) If subsection (2)(b)(i) applies—

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(a) the notice requiring those units to be surrendered (referred to in section
63(4)) must also set out the effect of paragraph (b); and

(b) if the units are not surrendered by the due date, the EPA may revoke the
approval by giving written notice to the participant.

(4) If an approval is revoked under subsection (4), this Act applies as if the 5
application had never been made.

(5) However, despite subsection (5), the effect of subsection (2)(b)(ii) is not
reversed (so the person is not reinstated as a participant for the carbon account-
ing area).

(6) The EPA must amend the register kept under section 57, and the records of car- 10
bon accounting areas kept under section 188(2), to record the effects of this
section.

(7) To avoid doubt, the substitution of land under this section does not affect the
P89 offset date for the CAA1.

194KF Effect of application to add area 2 (approved) land being declined 15
(1) This section applies if the EPA declines an application under section 194KD.
(2) The participant cannot make another application under section 194KC.
(3) The EPA—

(a) may make the declaration under section 194KA; and
(b) if it does so, the notice under section 194KA(6) must also notify the 20

participants of—
(i) the decision to decline the application under section 194KD, and

the reasons for it; and
(ii) the participants’ right under section 144 to seek a review of that

decision. 25

Regulations

194LA Regulations for P89 offsetting
(1) The Governor-General may, by Order in Council made on the recommendation

of the Minister, make regulations for 1 or more of the following purposes:
(a) prescribing the methodology for determining— 30

(i) reference carbon stock (section 194GA):
(ii) expected carbon stock (section 194JA(2)):

(b) prescribing the information to be included in, and other requirements
for,—
(i) P89 offset applications (section 194GA): 35
(ii) P89 release criteria notices (section 194JB):

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(iii) applications to substitute land under (section 194KC):
(c) prescribing re-use periods for area 2 (excess) land or P89 offsetting

(excess) land (section 194GB(2)(c)(iii) and (iv)):
(d) prescribing additional criteria for the approval of—

(i) P89 offset applications (section 194GB(2)(h)): 5
(ii) land substitution applications (section 194KD(2)(d)):

(e) prescribing additional P89 offset release criteria (section
194JA(1)(c)):

(f) prescribing the period for the purposes of the definition of expected car-
bon stock (section 194JA(2)): 10

(g) providing for any other matters contemplated by this subpart, necessary
for its administration, or necessary for giving it full effect.

(2) Regulations made under this section may make different provision for different
cases on any differential basis, including—
(a) for different forest species: 15
(b) for forest species of different ages:
(c) for different rotation periods:
(d) for different parts of New Zealand.

(3) Regulations made under this section may have retrospective effect to the extent
that they may apply from the commencement of the mandatory emissions 20
return period in which they are made or from a later date in that period.

(4) Regulations made under this section may require the use of a computer pro-
gramme available via the Internet site of the EPA.

(5) See sections 3A and 3B for consultation requirements that apply to the making
of regulations under this section. 25

(6) See also sections 169 to 175 (incorporation by reference).

Subpart 7—Temporary adverse events

194MA Interpretation for this subpart
(1) In this subpart,—

adverse event, in relation to temporary adverse event land, means the event 30
referred to in section 194NA(1)(b) as a result of which the land became tem-
porary adverse event land
affected land has the meaning given in section 194NA(1)
carbon recovery has the meaning given in section 194RA
event date, in relation to an adverse event, means the later of,— 35
(a) if the event occurs—

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(i) on only 1 day, that day; or
(ii) over 2 or more days, the first of those days (even if land in a par-

ticular carbon accounting area is not affected until the second or a
later day of the event); and

(b) if the event occurs in circumstances specified in regulations made under 5
section 194TA, the date provided for in the regulations

non-established land has the meaning given in section 194QB
permanently affected land has the meaning given in section 194QB
pre-event carbon stock rate, for temporary adverse event land from a CAA1,
means the average carbon stock per hectare of the affected land in the CAA1 10
on the day before the event date, determined in accordance with regulations
made under section 194TA, unless subsection (2) applies
re-established land has the meaning given in section 194QB
re-establishment has the meaning given in section 194QA
re-establishment date, in relation to an adverse event, means the later of— 15
(a) the date 4 years after the event date; and
(b) in circumstances specified in regulations made under section 194TA,

the date provided for in the regulations
temporary adverse event land means land that has become temporary adverse
event land under section 194NC(2)(e) and has not ceased to be so under a 20
provision referred to in section 194PA.

(2) For the purposes of the definition of pre-event carbon stock rate,—
(a) if land that is temporary adverse event land in relation to an adverse

event (event 1) becomes temporary adverse event land in relation to a
later adverse event (event 2), the pre-event carbon stock rate for the land 25
in relation to event 2 is the same as the pre-event carbon stock rate it had
in relation to event 1; and

(b) if P89 offsetting (approved) land becomes temporary adverse event land,
the pre-event carbon stock rate for the land is the reference carbon stock
(under section 194GA) per hectare of the CAA1 for which the land is 30
P89 offsetting (approved) land.

Application

194NA Application for temporary adverse event suspension
(1) Post-1989 forest land is affected land if—

(a) the land is in a carbon accounting area (a CAA1)— 35
(i) that is a carbon accounting area (averaging); or
(ii) for which a person is a participant in an activity of permanent for-

estry; and

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(b) the land is affected by an event of a kind prescribed in regulations made
under section 194TA (the adverse event); and

(c) the event results in each hectare of land ceasing to have forest species on
it that have, or are likely to have, tree crown cover of more than 30%;
and 5

(d) the area of affected land in each CAA1 is equal to or greater than any
minimum prescribed in regulations made under section 194TA; and

(e) the extent of carbon stock lost from each CAA1 is equal to or greater
than any minimum prescribed in regulations made under section
194TA. 10

(2) A participant in an activity of standard forestry or permanent forestry on a
CAA1 may apply for a temporary adverse event suspension for the affected
land in that CAA1.

(3) The application must—
(a) specify the CAA1s to which the application relates; and 15
(b) include a final forestry emissions return prepared under section 189BA

for the activity—
(i) that covers the CAA1s; and
(ii) that uses the day before the event date as the relevant date; and

(c) include in that return a new unit balance report prepared under section 20
189EA for the activity that covers the following carbon accounting areas
(CAA2s) formed from each CAA1:
(i) an affected CAA2 for the affected land in the CAA1:
(ii) a remainder CAA2 for the rest of the land in the CAA1; and

(d) include— 25
(i) the pre-event carbon stock rate for the affected land; and
(ii) any other information prescribed in regulations made under sec-

tion 194TA.
(4) The application must—

(a) be signed by the participant; and 30
(b) be submitted by the deadline prescribed in regulations made under sec-

tion 194TA; and
(c) be submitted—

(i) in the prescribed manner and format; and
(ii) together with the prescribed fee (if any); and 35
(iii) together with the prescribed information (if any).

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194NB Criteria of temporary adverse event suspension
(1) If a person submits an application under section 194NA for a temporary

adverse event suspension, the EPA,—
(a) if satisfied that the criteria in subsection (2) are met, must approve the

application; or 5
(b) otherwise, may decline the application.

(2) The criteria are that—
(a) the land in the affected CAA2s is affected land; and
(b) the participant notified the EPA of the occurrence of the adverse event in

accordance with regulations made under section 194TA; and 10
(c) the EPA is satisfied that the land in the affected CAA2s—

(i) is likely to achieve re-establishment under section 194QA; and
(ii) is likely to achieve carbon recovery under section 194RA; and

(d) any other criteria prescribed in regulations made under section 194TA
are met. 15

194NC Approval of temporary adverse event suspension
(1) This section applies if the EPA approves an application for a temporary adverse

event suspension under section 194NB.
(2) Starting on the day before the event date,—

(a) the emissions return for the CAA1s is treated as being submitted (so that 20
the total liability or entitlement has effect, and the unit balance is
updated, for the CAA1s under section 189DA); and

(b) the person is a participant in the activity on the CAA2s (instead of the
CAA1s); and

(c) the person is not liable to surrender the unit balance of each CAA1; and 25
(d) the unit balance of each CAA2 is the opening unit balance calculated for

it in the new unit balance report; and
(e) the land in the affected CAA2s formed from a CAA1 is the temporary

adverse event land from that CAA1 in relation to the adverse event.
(3) The EPA must amend the register kept under section 57, and the records of car- 30

bon accounting areas kept under section 188(2), to record the effects of this
section.

Temporary adverse event land

194PA Duration of temporary adverse event land status
(1) Land that becomes temporary adverse event land under section 194NC(2)(e) 35

remains temporary adverse event land until one of the following occurs:

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(a) the land achieves carbon recovery and is released from being temporary
adverse event land under section 194RB:

(b) the person ceases to be a participant because of section 188AB (for a
natural event that permanently prevents re-establishing a forest), whether
as a result of the adverse event or a different event: 5

(c) the land is affected by another event and becomes temporary adverse
event land under section 194NC(2)(e) in relation to that later event:

(d) the land is non-established land and ceases to be temporary adverse
event land under section 194QC(2)(d):

(e) the land is permanently affected land and ceases to be temporary adverse 10
event land under section 194QC(2)(e):

(f) the land ceases to be temporary adverse event land under section
194SA because of a breach of condition:

(g) the land ceases to be temporary adverse event land under section
194SB because it is intentionally converted, cleared before it achieves 15
carbon recovery, or is to be treated as deforested.

(2) To avoid doubt, the land continues to be temporary adverse event land even if
the carbon accounting areas containing the land—
(a) are reconfigured (whether under section 194CC or by any other

process that requires the submission of a new unit balance report); or 20
(b) change activity from standard forestry to permanent forestry or vice

versa.

194PB Effect of being temporary adverse event land
(1) All of the provisions of this Act that apply to post-1989 forest land continue to

apply to temporary adverse event land as if it remained forest land, subject to 25
sections 194PC to 194PF.

(2) The temporary adverse event land is also subject to any conditions prescribed
in regulations made under section 194TA.

194PC No liability or entitlement
(1) A participant in respect of temporary adverse event land is not liable to surren- 30

der units, or entitled to receive New Zealand units, for emissions and removals
for the land (including emissions resulting from the adverse event).

(2) However, subsection (1) is subject to sections 194DF and 194DG, and
the participant is liable to surrender units under those sections if they apply.

(3) If provided in regulations made under section 194TA, the participant is not 35
required to—
(a) calculate emissions and removals for which they are not liable to surren-

der, or entitled to receive, units; or

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(b) submit emissions returns covering a carbon accounting area in relation to
which they are not liable to surrender, or entitled to receive, units.

194PD First rotation forest
(1) If temporary adverse event land is in a carbon accounting area (averaging), and

on the day before the event date the land had a first rotation forest, then the 5
land is to be treated as continuing to have a first rotation forest.

(2) Subsection (1) continues to apply in relation to re-established land until it is
first cleared after the re-establishment date (even though it ceases to be tempor-
ary adverse event land on the re-establishment date).

(3) To avoid doubt, when subsection (1) ceases to apply to land, section 10
194FD applies.

194PE Reconfiguration restrictions
(1) A carbon accounting area containing temporary adverse event land cannot be

reconfigured (whether by application under section 194CA or by any other
process that requires the submission of a new unit balance report) except as 15
permitted by subsection (2).

(2) Reconfiguration is permitted—
(a) to reconfigure the carbon accounting areas that contain the temporary

adverse event land from the same CAA1 without including any other
land: 20

(b) to remove land that is affected by a natural event that permanently pre-
vents re-establishing a forest in accordance with sections 188AB and
191BA (whether that is the adverse event or a different event):

(c) to remove land that becomes temporary adverse event land in relation to
a different event: 25

(d) on the re-establishment date as required under section 194QB:
(e) to remove land that has ceased to be temporary adverse event land when

section 194SC(5) applies.

194PF Damage to land turns out to be permanent
(1) If the adverse event was a natural event and it becomes apparent that it perman- 30

ently prevents the re-establishing of a forest on the land,—
(a) if that becomes apparent before the re-establishment date, the participant

may notify the EPA under section 188AB (then see section
194PA(1)(b)); or

(b) if that is apparent at the re-establishment date and the participant has not 35
notified the EPA under section 188AB, the participant must identify
the land as permanently affected land under section 194QB (then see
section 194QC(2)(e)); or

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(c) if that becomes apparent after the re-establishment date, the participant
may notify the EPA under section 188AB (then see section
194PA(1)(b)).

(2) To avoid doubt, if P89 offsetting (approved) land is affected by another event
that permanently prevents re-establishing a forest on that land, the participant 5
may comply with section 188AB in relation to that event.

Re-establishment

194QA Re-establishment criteria
A hectare of temporary adverse event land achieves re-establishment if, on the
re-establishment date, the hectare has forest species on it that have, or are 10
likely to have, tree crown cover of more than 30%.

194QB Notice of achievement of re-establishment
(1) A participant in an activity of standard forestry or permanent forestry on 1 or

more carbon accounting areas that contain temporary adverse event land from a
CAA1 (each a CAA3) must give notice to the EPA of the extent to which the 15
temporary adverse event land has achieved re-establishment.

(2) The notice must,—
(a) for each CAA3, identify all of the land in the CAA3 that is each of the

following:
(i) re-established land, being all of the land in the CAA3 that, on the 20

re-establishment date, has achieved re-establishment:
(ii) non-established land, being all of the land in the CAA3 that, on

the re-establishment date, has not achieved re-establishment and is
not permanently affected land:

(iii) if the adverse event was a natural event, permanently affected 25
land, being all of the land in the CAA3—
(A) that, on the re-establishment date, has not achieved re-

establishment; and
(B) on which the adverse event has permanently prevented re-

establishing a forest; and 30
(b) include a final forestry emissions return under section 189BA for the

activity—
(i) that covers each CAA3; and
(ii) that uses the re-establishment date as the relevant date; and

(c) include in that return a new unit balance report under section 189EA 35
that covers the following carbon accounting areas (each a CAA4)
formed from each CAA3:

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(i) 1 or more re-established CAA4s for any re-established land in
the CAA3:

(ii) a non-established CAA4 for any non-established land in the
CAA3:

(iii) a permanently affected CAA4 for any permanently affected land 5
in the CAA3; and

(d) include any information prescribed in regulations made under section
194TA.

(3) The notice must—
(a) be signed by the participant; and 10
(b) be given within 60 working days after the re-establishment date; and
(c) be given—

(i) in the prescribed manner and format; and
(ii) together with the prescribed fee (if any); and
(iii) together with the prescribed information (if any). 15

(4) In relation to the final forestry emissions return and new unit balance report
required by subsection (2)(b) and (c), sections 189BA to 189EA apply
as if—
(a) the references in those sections to CAA1 were references to CAA3; and
(b) the references in those sections to CAA2 were references to CAA4. 20

194QC Effect on re-establishment date
(1) This section applies if a person gives the EPA a notice in accordance with sec-

tion 194QB, including a final forestry emissions return (for the CAA3s) and
new unit balance report (for the CAA4s).

(2) Starting on the re-establishment date,— 25
(a) the emissions return for the CAA3s is treated as being submitted (so that

the total liability or entitlement has effect, and the unit balance is
updated, for the CAA3s under section 189DA); and

(b) the person is not liable to surrender the unit balance of each CAA3; and
(c) for each re-established CAA4,— 30

(i) the person is the participant in respect of the re-established CAA4
(instead of the CAA3); and

(ii) the land in the re-established CAA4 remains temporary adverse
event land; and

(iii) the unit balance of the re-established CAA4 is the opening unit 35
balance calculated for it in the new unit balance report; and

(d) for each non-established CAA4,—

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(i) the person is a participant in respect of the non-established CAA4;
and

(ii) the land in the non-established CAA4 ceases to be temporary
adverse event land; and

(iii) the unit balance of the non-established CAA4 is the opening unit 5
balance calculated for it in the new unit balance report; and

(iv) section 194SC applies to the land; and
(e) for each permanently affected CAA4,—

(i) the person ceases to be a participant in respect of the permanently
affected CAA4; and 10

(ii) the land in the permanently affected CAA4 ceases to be temporary
adverse event land; and

(iii) the person is not liable to surrender the unit balance of each per-
manently affected CAA4.

(3) The EPA must amend the register kept under section 57, and the records of car- 15
bon accounting areas kept under section 188(2), to record the effects of this
section.

Carbon recovery

194RA Carbon recovery criteria
A hectare of temporary adverse event land achieves carbon recovery when the 20
carbon stock of the hectare (determined in accordance with regulations made
under section 194TA) is equal to the pre-event carbon stock rate.

194RB Notice when land achieves carbon recovery
(1) When temporary adverse event land achieves carbon recovery, the participant

in respect of the land must give notice to the EPA that the land has achieved 25
carbon recovery.

(2) The notice must—
(a) be signed by the participant; and
(b) be given when the next emissions return that covers the land is submit-

ted; and 30
(c) be given—

(i) in the prescribed manner and format; and
(ii) together with the prescribed fee (if any); and
(iii) together with the prescribed information (if any).

(3) If a participant gives the EPA notice in accordance with this section, the land is 35
taken to have recovered and is released from being temporary adverse event
land with effect from when carbon recovery was achieved.

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Ceasing to be temporary adverse event land before recovery

194SA Cancellation for breach of conditions
(1) If the EPA is satisfied that a condition applying under section 194PB(2) has

not been met in respect of temporary adverse event land in a carbon accounting
area, the EPA may cancel the approval in respect of all of the land in the carbon 5
accounting area.

(2) If the approval is cancelled,—
(a) the land ceases to be temporary adverse event land; and
(b) section 194SC applies to the land.
Procedure 10

(3) Before cancelling an approval, the EPA must—
(a) notify the participant of its intention to do so and the grounds for doing

so; and
(b) give the participant at least 60 working days to—

(i) rectify the non-compliance; or 15
(ii) show cause as to why the EPA should not cancel the approval.

(4) If the EPA cancels an approval, it must give the participant notice of—
(a) its decision and the reasons for it; and
(b) the date on which the cancellation occurred; and
(c) the person’s right to seek a review of the decision under section 144. 20

194SB Other circumstances causing land to cease to be temporary adverse event
land
Intentional conversion to non-forest land

(1) Temporary adverse event land is intentionally converted if the participant—
(a) takes any action that is inconsistent with the land achieving re-establish- 25

ment; or
(b) otherwise takes any action for the purpose of converting the land to land

that is not forest land.
(2) If temporary adverse event land is intentionally converted,—

(a) the land ceases to be temporary adverse event land; and 30
(b) the land is to be treated as deforested (despite section 179A); and
(c) the reversion date for section 194SC is the date on which the first

action referred to in subsection (1)(a) or (b) occurred.
Re-established land cleared before carbon recovery

(3) If re-established land is cleared after its re-establishment date but before it 35
achieves carbon recovery,—

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(a) the land ceases to be temporary adverse event land; and
(b) the land is to be treated as deforested; and
(c) the reversion date for section 194SC is the date the clearing com-

menced.
Re-established land treated as deforested 5

(4) If re-established land becomes land that is to be treated as deforested under
section 179(1)(b) or (c) before it achieves carbon recovery,—
(a) the land ceases to be temporary adverse event land; and
(b) the reversion date for section 194SC is the 10- or 20-year date under

section 179. 10

194SC Consequences if land ceases to be temporary adverse event land
(1) This section applies to the following land:

(a) non-established land that ceases to be temporary adverse event land
under section 194QC(2)(d), for which the reversion date is the re-
establishment date: 15

(b) land in a carbon accounting area in respect of which the approval is can-
celled under section 194SA, for which the reversion date is the date
of the cancellation:

(c) land that ceases to be temporary adverse event land under section
194SB, for which the reversion date is the date specified in that sec- 20
tion.

Act reapplies
(2) Starting on the reversion date, the provisions of this Act apply to the land as if

the land had never become temporary adverse event land.
Liability or entitlement 25

(3) As a result, the participant must include all the emissions and removals for the
land on and after the event date (including as a result of the adverse event) in
the next emissions return the participant is required to submit.

(4) For that purpose,—
(a) all of those emissions and removals are to be treated as having occurred 30

on the re-establishment date; but
(b) the emissions resulting from the adverse event are to be determined by

reference to the pre-event carbon stock rate for the land.
Reconfiguration

(5) Section 194PE(2)(e) applies to a reconfiguration if— 35
(a) the land to which this section applies is only part of a carbon accounting

area; and

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(b) as a result of subsection (2), the participant is required to reconfigure
that carbon accounting area to remove that land.

Permanent forestry
(6) If the activity on the land is permanent forestry, see also section 194ED(2).

Regulations 5

194TA Regulations for temporary adverse events
(1) The Governor-General may, by Order in Council made on the recommendation

of the Minister, make regulations for 1 or more of the following purposes:
(a) prescribing circumstances and dates for the definitions of event date and

re-establishment date in section 194MA: 10
(b) prescribing the methodology for determining—

(i) the pre-event carbon stock rate (section 194MA):
(ii) carbon stock loss (section 194NA):
(iii) carbon stock for the purpose of determining carbon recovery

(section 194RA): 15
(c) prescribing the kinds of events that are adverse events (section

194NA):
(d) prescribing—

(i) the minimum affected area (section 194NA(1)(d)):
(ii) the minimum carbon stock loss (section 194NA(1)(e)): 20

(e) prescribing other information to be included in, and the submission date
and other requirements for, applications made under section 194NA:

(f) prescribing notification requirements and other criteria for approval
under section 194NB:

(g) prescribing conditions for the purposes of section 194PB(2): 25
(h) providing that a participant for temporary adverse event land is not

required to—
(i) calculate emissions and removals for which they are not liable to

surrender, or entitled to receive, units:
(ii) submit emissions returns covering a carbon accounting area in 30

relation to which they are not liable to surrender, or entitled to
receive, units (section 194PC(3)):

(i) prescribing other information to be included in, and other requirements
for, notices under section 194QB:

(j) providing for any other matters contemplated by this subpart, necessary 35
for its administration, or necessary for giving it full effect.

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(2) Regulations under this section may make different provision for different cases
on any differential basis.

(3) Regulations made under this section may require the use of a computer pro-
gramme available via the Internet site of the EPA.

(4) Regulations made under subsection (1)(g) may relate to emissions or remov- 5
als that—
(a) stem directly from an activity; or
(b) are associated with a product or other thing that is the subject of an

activity.
(5) See sections 3A and 3B for consultation requirements that apply to the making 10

of regulations under this section.
(6) Regulations made under this section come into force 3 months after the date of

their notification in the Gazette, or on any later date specified in the regula-
tions.

(7) See also sections 169 to 175 (incorporation by reference). 15

Subpart 8—General

Input returns may be submitted before actual emissions returns

194UA Input returns may be submitted for certain emissions returns for
forestry activities

(1) This section applies before a person submits an emissions return (for a forestry 20
activity) of a type specified in the regulations.

(2) The person may first submit, for the activity and 1 or more of the areas or car-
bon accounting areas covered by the emissions return, an input return that con-
tains the data or information required by the regulations.

(3) The input return must be submitted by— 25
(a) the deadline specified in the regulations; or
(b) any extended deadline granted by the EPA under the regulations.

(4) In this section, regulations means regulations made under section 194UC.

194UB EPA may do calculations based on input return
(1) This section applies if the EPA receives an input return in accordance with 30

section 194UA.
(2) As soon as practicable after receipt, the EPA must—

(a) calculate for each area or carbon accounting area covered by the input
return, as required for the relevant emissions return,—
(i) the participant’s emissions and removals; and 35

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(ii) the participant’s liability to surrender units for their emissions or
entitlement to receive New Zealand units for their removals; and

(b) give a notice to the participant that includes—
(i) the calculations and the calculated amounts; and
(ii) the data, information, or other matters on which the calculations 5

are based; and
(iii) a statement that the participant may choose to include the calcula-

tions and the calculated amounts in the relevant emissions return;
and

(iv) a statement about the effect of subsection (3). 10
(3) The EPA is not liable for anything that results from its calculations under this

section, and the EPA’s calculations and notice do not affect any obligation of
the participant under this Act (such as the obligation to submit an accurate
emissions return).

194UC Regulations for input returns 15
(1) The Governor-General may, by Order in Council made on the recommendation

of the Minister, make regulations for 1 or more of the following purposes:
(a) specifying the 1 or more types of emissions return for a forestry activity

for which input returns may be submitted, which may be specified by
reference to 1 or more of the following: 20
(i) the type of forestry activity:
(ii) any feature of the forest or land to which the activity relates:
(iii) any other matter:

(b) specifying the data or information that must be contained in any input
return or the input return for each type of emissions return: 25

(c) specifying the deadline for submitting the input return for each type of
emissions return, which must be a reasonable period before the deadline
for submitting the emissions return:

(d) providing for how, and for how long, the EPA may extend a deadline for
submitting the input return for any emissions return or for each type of 30
emissions return:

(e) authorising the EPA to issue guidelines or standards by notice in the
Gazette in relation to the matters specified under paragraphs (b) to
(d).

(2) See sections 3A and 3B for consultation requirements that apply to the making 35
of the regulations.

(3) Any guidelines or standards issued by the EPA under regulations made under
subsection (1)(e) are a disallowable instrument, but not a legislative instru-

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ment, for the purposes of the Legislation Act 2012 and must be presented to the
House of Representatives under section 41 of that Act.

(4) A person who has complied with guidelines or standards issued by the EPA
under regulations made under subsection (1)(e) is, in the absence of proof to
the contrary, presumed to have complied with the relevant requirements speci- 5
fied in regulations corresponding to those guidelines or standards.

Notification of status of forest land

195 Notification of status of forest land
(1) The EPA must, if required by regulations made under section 168, notify the

following persons of the details of the land that the EPA is satisfied is a type of 10
land described by subsection (1A):
(a) the Registrar of the Maori Land Court in whose jurisdiction the land is

situated in relation to Maori land; and
(b) the Registrar-General of Land in relation to land that is registered under

the Land Transfer Act 2017; and 15
(c) the Registrar of Deeds in relation to land that is registered under the

Deeds Registration Act 1908.
(1A) The types of land are—

(a) the following types of land in respect of which a person is registered as a
participant: 20
(i) pre-1990 forest land:
(ii) P90 offsetting land:
(iii) post-1989 forest land:

(b) the following types of post-1989 forest land:
(i) P89 offsetting (approved) land (as defined by section 194GAA): 25
(ii) temporary adverse event land:
(iii) land for which a person is registered as a participant in permanent

forestry:
(c) land that the EPA has declared to be exempt land.

(2) On receipt of a notice under subsection (1), the Registrar-General of Land or 30
the Registrar of the Maori Land Court or the Registrar of Deeds must record
the notice on the appropriate register under the Land Transfer Act 2017, record
of the Maori Land Court, or deeds index under the Deeds Registration Act
1908.

(3) The Registrar-General of Land or the Registrar of the Maori Land Court or the 35
Registrar of Deeds must cancel any notices recorded under subsection (2) if
required under regulations made under section 168.

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Forestry classifications of land

196A Meaning of forestry classification
In this Act, forestry classification means 1 or more classifications of an area
of land that—
(a) classifies the area by whether or how— 5

(i) a definition or matter in this Act that relates to forestry applies to
the area; or

(ii) the area is eligible to have a definition or matter in this Act apply
to it if certain requirements are satisfied; and

(b) is given— 10
(i) by the EPA under section 196B (initial classification), 196D

(change of classification to correct error), 196E (change of classi-
fication to update for changes), or 144 (review of classification);
or

(ii) by the decision of the District Court or High Court under section 15
145 or 146.

Examples
If specified by regulations, an area of land might be classified as—
• pre-1990 forest land:
• post-1989 forest land: 20
• land that is eligible to become post-1989 forest land (if it becomes forest

land):
• P90 offsetting land:
• land that has been deforested, or deforested on specified dates:
• land that is eligible to be declared exempt land under section 184 (because 25

of tree weeds):
• post-1989 forest land for which a participant is registered for standard for-

estry that is or is not a carbon accounting area (averaging):
• post-1989 forest land for which a participant is registered for permanent for-

estry: 30
• land that was forest land on 31 December 1989:
• exempt land:
• pre-1990 forest land to which the pre-1990 forest land allocation plan

applies:
• something else. 35

196B EPA may give forestry classifications to areas of land
The EPA may give 1 or more forestry classifications to an area of land in
accordance with regulations made under section 196G.

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196C Effect of forestry classifications
(1) The forestry classification of an area of land is conclusive evidence of how the

relevant definition or matter in this Act applies to the area.
(2) The EPA must apply this Act to the area in accordance with the forestry classi-

fication. 5
(3) If a person’s application, notice, emissions return, or other document under this

Act specifies the forestry classification of an area of land, the document—
(a) need not include any information that is covered by the forestry classifi-

cation; but
(b) for a forestry classification that an area of land is eligible for something 10

if certain requirements are satisfied, must include information about
whether the requirements are satisfied.

(4) The EPA, or any person carrying out its powers, duties, or functions,—
(a) does not warrant that any forestry classification is correct and not based

on, or affected by, something that is incorrect or that has materially 15
changed; and

(b) is not liable for anything that results from a forestry classification being
incorrect or based on, or affected by, something that is incorrect or that
has materially changed.

196D Change of forestry classification to correct error 20
(1) The EPA may change the forestry classification of an area of land to correct

any error that the EPA is satisfied is contained in the classification, including
where the classification was based on incorrect information.

(2) The EPA must make the change in accordance with regulations made under
section 196G. 25

196E Change of forestry classification to update for changes
(1) The EPA may change the forestry classification of an area of land if—

(a) there is a material change in any of the information or facts on which the
classification is based; or

(b) there is a material change to this Act, or to any regulations made under 30
this Act, that affects the classification.

(2) The EPA must make the change in accordance with regulations made under
section 196G.

196F Forestry classification with effect before date classification given
(1) This section applies if a forestry classification has effect before the date on 35

which the classification is given, whether—
(a) by the EPA under section 196B, 196D, or 196E or on review under

section 144; or

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(b) by the decision of a court on appeal under section 145 or 146.
(2) The forestry classification must be ignored in respect of the period before the

date on which the classification is given—
(a) to the extent that it would increase the number of units that a person is

required to surrender, or decrease the number of New Zealand units that 5
a person is entitled to receive, in respect of that period; and

(b) in respect of any other matter specified by regulations made under sec-
tion 196G.

(3) In all other respects, the forestry classification must be applied to that period.
(4) To avoid doubt, where the forestry classification is ignored under subsection 10

(2), the earlier forestry classification (if any) applies instead.

196G Regulations for forestry classifications
(1) The Governor-General may, by Order in Council made on the recommendation

of the Minister, make regulations for 1 or more of the following purposes:
(a) specifying the forestry classifications that the EPA may give to areas of 15

land:
(b) prescribing 1 or more methods or processes by which the EPA may give

a new or changed forestry classification to an area, and those methods or
processes—
(i) may or may not provide for a person to apply for a classification; 20

and
(ii) may prescribe the fees or charges payable by an applicant for a

classification to enable the recovery of all or part of the direct and
indirect costs of the EPA in—
(A) receiving and processing the application; and 25
(B) considering, granting, or declining the application; and

(iii) must require the EPA to first consult the persons that the regula-
tions specify are likely to be substantially affected by the classifi-
cation, unless the only persons likely to be substantially affected
have applied for, or agreed to, the classification: 30

(c) providing for when a forestry classification comes into effect, which
may, for example,—
(i) subject to section 196F, be before the date of which the classifi-

cation is given if the classification is changed under section
196D or 196E, on review by the EPA under section 144, or on 35
appeal to the court under section 145 or 146:

(ii) differ for different forestry classifications or circumstances, such
as whether a person is responsible for a material change described
in section 196E(1)(a):

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(d) specifying matters for the purposes of section 196F(2)(b) (in respect
of which a forestry classification is ignored for the period before the date
on which it is given):

(e) providing for the publication of the following in 1 or more notices,
instruments, maps, or tools, which may be electronic: 5
(i) any decision to give a forestry classification to an area of land:
(ii) the current forestry classifications of all areas of land, and any

related matters.
(2) Examples of the costs that may be recovered under regulations made under

subsection (1)(b)(ii) include (but are not limited to)— 10
(a) the costs of providing, operating, and maintaining systems, databases,

and other processes in connection with the application:
(b) the costs of services provided by third parties.

(3) Section 167(4) also applies to regulations made under subsection (1)(b)(ii).
(4) See sections 3A and 3B for consultation requirements that apply to the making 15

of regulations under this section.
(5) Regulations made under this section come into force 3 months after the date of

their notification in the Gazette, or on any later date specified in the regula-
tions.

Grant-funded forests 20

197 Entitlement to units for removals from grant-funded forests
A participant in an activity of standard forestry or permanent forestry on a car-
bon accounting area is not entitled to receive New Zealand units for removals
that—
(a) are attributable to forest species in relation to which the participant has 25

received a grant from the Crown under a grant scheme relating to for-
estry that is prescribed in regulations made under section 197A (a
grant-funded forest); and

(b) occur during the stand-down period for that forest prescribed in regula-
tions made under section 197A. 30

197A Regulations for grant-funded forests
(1) The Governor-General may, by Order in Council made on the recommendation

of the Minister, make regulations for 1 or more of the following purposes:
(a) prescribing Crown grant schemes relating to forestry:
(b) prescribing stand-down periods for grant-funded forests: 35
(c) prescribing methodologies for attributing removals to grant-funded for-

ests:

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(d) providing for any other matters contemplated by section 197, neces-
sary for its administration, or necessary for giving it full effect.

(2) Regulations made under this section may make different provision for different
cases on any differential basis, including—
(a) for different grant schemes: 5
(b) for different periods of time:
(c) for different forest species:
(d) for different parts of New Zealand.

(3) Regulations made under this section may require the use of a computer pro-
gramme available via the Internet site of the EPA. 10

(4) Regulations made under subsection (1)(c) may relate to emissions or remov-
als that—
(a) stem directly from the relevant activity; or
(b) are associated with a product or other thing that is the subject of the rele-

vant activity. 15

223ZZ Schedule 1AA amended
(1) In Schedule 1AA, replace clause 10(3) with:
(3) Section 89A—

(a) applies in respect of emissions returns for an activity of standard forestry
or permanent forestry for emissions or removals on or after 1 January 20
2022; but

(b) does not apply in respect of any other emissions returns in relation to
post-1989 forest land during a mandatory emissions returns period com-
mencing before 1 January 2023.

(2) In Schedule 1AA, replace clause 12(3)(a) with: 25
(a) may submit a single emissions return under section 189AA in respect

of 1 or more of the activities of standard forestry carried out by a mem-
ber of the group in a year; and

(3) In Schedule 1AA, after clause 15, insert:

Subpart 4—Provisions that commence on 1 January 2022 30

Persistent non-compliance

16 Deregistering participants for persistent non-compliance
The EPA must not remove the name of a person from the register in respect of
an activity under section 59A if the failure on which the EPA relies occurred
before the commencement of this clause. 35

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Time bar for amendment of emissions returns

17 Time bar for amendment of emissions returns
If an emissions return was required or permitted by a section to which section
127(1) applied immediately before the commencement of this clause, section
127 continues to apply, as it was immediately before the commencement of this 5
clause, in relation to that emissions return.

Tree weeds

18 Existing exemptions for deforestation of land with tree weeds
(1) This clause applies to land for which, immediately before the commencement

of this clause, there is an exemption under section 184. 10
(2) The exemption applies as if it had been granted under this Act as amended by

the amendment Act, so that the conditions in former section 184(6) no longer
apply.

19 Carbon accounting areas with tree weeds already added to post-1989
forest land 15
Section 188(5)(b) does not affect a carbon accounting area added to any
post-1989 forest land before the commencement of that provision.

Existing emissions returns

20 Emissions returns already submitted or assessed
If an emissions return was submitted by a person, or assessed by the EPA under 20
section 121, before the commencement of this clause, the emissions return
must be dealt with in accordance with this Act as it was immediately before the
commencement of this clause.

P90 offsetting land

21 Interpretation 25
In clauses 21 to 25,—
commencement date means the date on which this clause came into force
former, in relation to a provision, means the provision as in force before the
commencement date
new offsetting provisions means subpart 3 of Part 5 and section 30
179A(1)(b) as inserted by the amendment Act.

22 New offsetting provisions apply to existing offsets
(1) Anything done or omitted to be done to, or in relation to, land under former

sections 186A to 186J and that is of ongoing effect is to be treated, on and after

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the commencement date, as having been done or omitted to be done under the
new offsetting provisions.

(2) For the purposes of subclause (1), the new offsetting provisions apply with
any necessary modifications.

23 Existing approved applications may be amended to include new land 5
(1) The owners of pre-1990 forest land that is the subject of an existing approved

application may apply to the EPA to substitute land of the kind referred to in
section 186BB(2)(b)(ii), (iii), or (iv) for some or all of the area 2 (approved)
land under the application.

(2) The application must,— 10
(a) identify the existing approved offset land that is to be replaced (area A);

and
(b) identify the land that is to be substituted for area A (area B); and
(c) include—

(i) any information in relation to area B that would be required in an 15
application under section 186BA; and

(ii) any other information prescribed in regulations made under sec-
tion 186FC.

(3) The application must be made jointly by all of the persons who, on the date of
the application, own any of the area 1 (approved) land, area 2 (approved) land, 20
or land in area B.

(4) The application must—
(a) be signed by all of the applicants; and
(b) be submitted before the P90 offset date for the existing approved appli-

cation; and 25
(c) be submitted—

(i) in the prescribed manner and format; and
(ii) together with the prescribed fee (if any); and
(iii) together with the prescribed information (if any).

(5) In this clause, existing approved application means an application under for- 30
mer section 186A—
(a) that was approved before the commencement date; but
(b) in relation to which a declaration under former section 186D had not

been given to the EPA before the commencement date.
(6) To avoid doubt, nothing in this clause prevents a person who submitted an 35

application under former section 186A that has not yet been approved from
withdrawing or amending the application.

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24 Approval of application
(1) If a person submits an application under clause 23, the EPA—

(a) if satisfied that the criteria in subclause (2) are met, must approve the
application; or

(b) otherwise, may decline the application. 5
(2) The criteria are that—

(a) the land in area B is land that meets the criteria in section
186BB(2)(b) (other than subparagraph (i)) and (c):

(b) the area 2 (approved) land under the existing application less area A plus
area B (revised offsetting land) meets the criteria in section 10
186BB(2)(d) and (e):

(c) the EPA is satisfied that if all of the revised offsetting land were to
become area 1 (offset) land, the P90 offset release criteria are likely to be
met on the P90 offset date:

(d) any other criteria prescribed in regulations made under section 186FC 15
are met.

(3) If the EPA approves the application,—
(a) area A ceases to be part of the area 2 (approved) land; and
(b) area B becomes part of the approved offset land; and
(c) this Act applies as if the existing application had been approved (on its 20

original approval date) in relation to the revised offsetting land.

25 Change of terminology: pre-1990 offsetting forest land to P90 offsetting
land
A reference (in an enactment or other document) to pre-1990 offsetting forest
land includes, in relation to a time before the commencement date, a reference 25
to P90 offsetting land, unless the context otherwise requires.

Non-compliance for transmitted interests

26 Non-compliance for transmitted interests
(1) Section 194AA(1) to (3), but no other subsections of that section, applies to

a transmission of interest whose date of transmission was before the com- 30
mencement of this clause.

(2) Section 194AC—
(a) does not apply to a final transmission whose date of transmission was

before the commencement of this clause; but
(b) applies to a final transmission whose date of transmission is on or after 35

the commencement of this clause, even if the first transmission, and any

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other transmission of interest between the first and final transmissions,
was before that commencement.

Changing of activity on post-1989 forest land

27 Previous changing of activity on post-1989 forest land
(1) If a person satisfied former section 188(9) before the commencement of this 5

clause, they must be treated as having had an application under section
194DA approved to become registered as a participant in standard forestry (the
final activity) by changing from PFSI activity (the initial activity).

(2) See sections 194DA(6)(b) and 194EA(2)(c)(ii), which are provisions to
which this clause relates. 10

28 Application to change from standard to permanent forestry
(1) This clause applies to a person who, in the period starting on 1 January 2018

and ending on 31 December 2022,—
(a) becomes registered as a participant carrying out standard forestry in

respect of any post-1989 forest land, whether or not registered in respect 15
of that land before; and

(b) has an application under section 194DA approved to change from
standard forestry to permanent forestry on that land.

(2) For each CAA1 covered by the emissions return that accompanied the applica-
tion, the person may surrender any units that are equal in number to the unit 20
balance of the CAA1.

(3) The deadline for surrendering the units is 60 working days after the person sub-
mits the application.

(4) For each unit surrendered, the person becomes entitled to a unit for removals
from permanent forestry. 25

29 All PFSI activity is changed to permanent forestry in 2023
(1) This clause applies to a person’s forest land that a forest sink covenant is regis-

tered against immediately before 1 January 2023 (the PFSI land).
(2) On 1 January 2023,—

(a) the EPA must apply sections 194DA to 194DC as if the person had 30
that day submitted an application in accordance with section 194DA to
become a participant in a final activity of permanent forestry on the PFSI
land; but

(b) the EPA may apply section 121 for the purposes of the application.

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Carbon accounting areas (averaging)

30 Emissions returns for carbon accounting area (averaging) in third
mandatory emissions return period

(1) This clause applies in relation to a carbon accounting area (CAA1) that
becomes a carbon accounting area (averaging) under section 194FC(3) dur- 5
ing the third mandatory emissions return period.

(2) In any emissions return in respect of a period in the third mandatory emissions
return period, the calculations and assessments in relation to the CAA1 must be
made as if—
(a) the CAA1 had been a carbon accounting area (averaging) since the 10

beginning of the period covered by the emissions return; and
(b) the amendment Act had come into force before that date.

31 Carbon accounting areas constituted in 2022 from applications made in
2019–2021

(1) If— 15
(a) a carbon accounting area is constituted by a person being registered as a

participant as referred to in section 188(1); and
(b) the application to do so was made after 31 December 2018 but before

1 January 2022; and
(c) the person’s name is entered on the register under section 188(5) on or 20

after 1 January 2022 but before 1 July 2022,—
the registration is to be taken to have had effect on 31 December 2021 (and the
carbon accounting area’s constitution date is therefore 31 December 2021).

(2) If—
(a) a carbon accounting area is constituted by being added as a carbon 25

accounting area as referred to in section 188(3); and
(b) the application to do so was made after 31 December 2018 but before

1 January 2022; and
(c) the notice under section 188(6)(b)(ii) is given on or after 1 January

2022 but before 1 July 2022,— 30
the notice is to be taken to have been given on 31 December 2021 (and the car-
bon accounting area’s constitution date is therefore 31 December 2021).

32 Carbon accounting areas constituted in 2019–2021: opting in to averaging
(1) A participant in an activity of standard forestry on post-1989 forest land in 1 or

more carbon accounting areas (each a CAA1) may give notice to the EPA to 35
change the CAA1s into carbon accounting areas (averaging) if all of the fol-
lowing apply to each CAA1:
(a) it was constituted—

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(i) by a person being registered as a participant in respect of the land
(as referred to in section 188(1)); or

(ii) by the land being added as a carbon accounting area under sec-
tion 188(3):

(b) the application to register the participant, or add the carbon accounting 5
area, was made after 31 December 2018 but before 1 January 2022:

(c) its constitution date is before 1 January 2022:
(d) it meets the requirements of section 194FC(3)(b):
(e) before the notice is given under this clause, no other emissions return

has been (or should have been) submitted covering the CAA1 in relation 10
to a period after 1 January 2023.

(2) The notice given under this clause must—
(a) specify the CAA1s to which it relates; and
(b) include an emissions return prepared under clause 33 for the activity

that covers the CAA1s. 15
(3) The notice must—

(a) be signed by the participant; and
(b) be submitted on or before 30 June 2023; and
(c) be submitted—

(i) in the prescribed manner and format; and 20
(ii) together with the prescribed fee (if any); and
(iii) together with the prescribed information (if any).

33 Preparing emissions return for carbon accounting areas changing to
averaging

(1) An emissions return prepared under this clause must— 25
(a) specify—

(i) the CAA1s that the return covers; and
(ii) if the land in a CAA1 has not all been in the CAA1 for the whole

of the emissions return period, all of the carbon accounting areas
that any of the land has been part of during the emissions return 30
period (the predecessor CAAs); and

(b) for each CAA1,—
(i) specify the activity for which the person is a participant on the

CAA1s; and
(ii) specify the emissions return period that applies under subclause 35

(2); and

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(iii) specify the emissions and removals during the emissions return
period from all of the land now in CAA1 (whether they occurred
when the land was part of CAA1 or part of a predecessor CAA);
and

(iv) set out the calculation under clause 34(1) of the person’s averag- 5
ing liability or entitlement for emissions and removals during the
emissions return period; and

(v) set out the calculation under clause 34(2) of the averaging unit
balance; and

(vi) set out the calculation under clause 34(4) of the person’s actual 10
liability or entitlement; and

(c) set out the calculation under clause 34(5) of the person’s total liability
or entitlement for all the CAA1s.

(2) The emissions return period for a CAA1 is the period that—
(a) starts on the later of— 15

(i) 1 January 2018; and
(ii) the date on which any of the land in the CAA1 became post-1989

forest land; and
(b) ends on 31 December 2022.

34 Calculations for CAA1s changing to averaging 20
(1) A person’s averaging liability or entitlement for a CAA1 (a) is calculated as

follows:
a = r − e

where—
r is the number of units required for the removals from the CAA1 during 25

the emissions return period, determined in accordance with subclause
(3)

e is the number of units required for the emissions from the CAA1 during
the emissions return period, determined in accordance with subclause
(3). 30

(2) The averaging unit balance of a CAA1 (u) is calculated as follows:
u = h + a

where—
h is the opening unit balance of the CAA1 determined in accordance with

subclause (3) 35

a is the person’s averaging liability or entitlement for the CAA1.
(3) The values of variables r, e, and h in subclauses (1) and (2) are to be deter-

mined as if—

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(a) all of the land now in the CAA1 had been a single carbon accounting
area since the beginning of the emissions return period; and

(b) that carbon accounting area had been a carbon accounting area (averag-
ing) since the beginning of the emissions return period; and

(c) the amendment Act had come into force before the beginning of the 5
emissions return period.

(4) A person’s actual liability or entitlement for a CAA1 (h) is calculated as fol-
lows:

h = a − c
where— 10
a is the averaging unit balance of the CAA1 under subclause (3)
c is—

(a) the previous unit balance of the CAA1 calculated under the last
emissions return submitted for the CAA1; or

(b) if there is no such return, zero. 15
(5) A person’s total liability or entitlement for all the CAA1s (t) is calculated as

follows:
t = hn

where—
hn is the sum of the person’s actual liability or entitlement for each CAA1. 20

35 Effect of changing to carbon accounting areas (averaging)
(1) This clause applies if the EPA decides that a notice under clause 32 and the

accompanying emissions return are correct.
(2) If the person’s total liability or entitlement for the CAA1s covered by the emis-

sions return is— 25
(a) a positive number, the person is entitled to receive that number of New

Zealand units; or
(b) a negative number, the person is liable to surrender that number of units.

(3) The unit balance of each CAA1 covered by the emissions return is updated to
the averaging unit balance calculated under the return. 30

(4) Each CAA1 covered by the notice becomes a carbon accounting area (averag-
ing) and is to be treated as having become so on 1 January 2023.

(5) The person is not required to submit an emissions return under section
189AB covering the CAA1s covered by the notice.

(6) For the purpose of future calculations in relation to the CAA1s, the emissions 35
return accompanying the notice is a final forestry emissions return.

Climate Change Response (Emissions Trading Reform)
Amendment Bill Part 1 cl 223ZZ

363



223ZZA Schedule 3 amended
(1) In Schedule 3, in the Part 1A heading, replace “Pre-1990 offsetting forest land”

with “P90 offsetting land”.
(2) In Schedule 3, Part 1A, replace “pre-1990 offsetting forest land” with “P90 off-

setting land” in each place. 5

223ZZB Schedule 4 amended
In Schedule 4, replace Part 1 with:

Part 1
Standard forestry removal activities

(applies on and after 1 January 2008) 10
Any of the following activities in respect of post-1989 forest land, having chosen this
Part (instead of Part 1A) to apply to the land:
(a) owning the land, other than post-1989 forest land that is subject to a forest sink

covenant registered under section 67ZD of the Forests Act 1949:
(b) holding a registered forestry right for the land or being the leaseholder under a 15

registered lease of the land, other than post-1989 forest land that is subject to a
forest sink covenant registered under section 67ZD of the Forests Act 1949:

(c) being a party to a Crown conservation contract in respect of the land.

Part 1A
Permanent forestry removal activities 20

(applies on and after 1 January 2022)
Any of the activities specified in Part 1 in respect of post-1989 forest land, having
chosen this Part (instead of Part 1) to apply to the land.

Subpart 4—Amendments that commence by Order in Council or on
1 January 2023 25

224 Section 2A amended (Application of Schedules 3 and 4)
In section 2A(1)(b), replace “sections 2C(3), 217 to 219, 178A, and 178B”
with “sections 2C(3) and 217 to 219”.

225 Section 27 amended (Information accessible by search)
In section 27(2)(c), delete “or 178B”. 30

226 Section 89 amended (EPA to publish certain information)
Repeal section 89(1)(j) and (k).

Part 1 cl 223ZZA
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227 Sections 178A and 178B repealed
Repeal sections 178A and 178B.

228 Section 233 amended (Rate of synthetic greenhouse gas levy)
In section 233(1), formula, definition of variable B, delete “the lesser of $25
and”. 5

229 Schedule 1AA amended
In Schedule 1AA, after clause 14 the last clause, insert:

Subpart 5—Provisions that commence by Order in Council or on
1 January 2023

1536 Paying money instead of surrendering, repaying, or reimbursing units 10
(1) Subclause (2) applies to any money that, before the commencement of this

clause, a person had paid in accordance with section 178A(2)(a)(ii) or (iii)
instead of surrendering or repaying units.

(2) The EPA may pay money to the person in accordance with section
178A(2)(b)(ii) for each of those units, instead of reimbursing the units, as if 15
section 178A continued to apply for that purpose.

(3) Subclause (4) applies to any money that, on the commencement of this
clause,—
(a) had been paid into a Crown Bank Account in accordance with section

178A(2)(a)(ii) or (iii); and 20
(b) is not cleared as required by section 178A(4).

(4) The money—
(a) can never be treated as cleared (and so cannot satisfy the person’s obli-

gation to surrender, repay, or reimburse units under section 178A); and
(b) must be reimbursed to the person. 25

(5) For any other payment made in accordance with section 178A(2)(a)(ii) or (iii)
(by a person) or (b)(ii) or (iii) (by the EPA) before the commencement of this
clause, section 178B continues to apply for the purposes of completing a matter
in relation to that payment.

(6) Sections 27(2)(c) and 89(1)(j) and (k) continue to apply after the commence- 30
ment of this clause for the purposes of anything done under the clause.

(7) For the purposes of this clause, any section of the principal Act to which it
refers must be read as it was immediately before the commencement of the
clause.

Climate Change Response (Emissions Trading Reform)
Amendment Bill Part 1 cl 229

365



Subpart 5—Amendments that commence on 1 January 2023

229A Schedule 4 amended
In Schedule 4, Part 1, paragraphs (a) and (b), delete “, other than
post-1989 forest land that is subject to a forest sink covenant registered under
section 67ZD of the Forests Act 1949”. 5

Part 2
Consequential amendments to other enactments

Subpart 1—Consequential amendments that commence on day after
Royal assent

230 Climate Change (Fishing Allocation Plan) Order 2010 revoked 10
The Climate Change (Fishing Allocation Plan) Order 2010 (SR 2010/134) is
revoked.

231 Consequential amendments
The enactments specified in Schedule 3 are amended as set out in that sched-
ule. 15

Subpart 2—Consequential amendments that commence on
30 November 2020

232 Consequential amendments
The enactments specified in Schedule 4 are amended as set out in that sched-
ule. 20

Subpart 3—Consequential amendments that commence on
1 January 2021 2022

233 Consequential amendments
The enactments specified in Schedule 5 are amended as set out in that sched-
ule. 25

Subpart 4—Consequential Revocation and consequential amendments
that commence on 1 January 2022 2023

233A Forests (Permanent Forest Sink) Regulations 2007 revoked
The Forests (Permanent Forest Sink) Regulations 2007 (SR 2007/354) are
revoked. 30

Part 1 cl 229A
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Amendment Bill

366



234 Consequential amendments
The enactments specified in Schedule 6 are amended as set out in that sched-
ule.

Climate Change Response (Emissions Trading Reform)
Amendment Bill Part 2 cl 234

367



Schedule 1
New Schedule 1AA inserted

s 202

Schedule 1AA
Transitional, savings, and related provisions 5

s 4A

Contents
Page

Part 1
Provisions relating to Climate Change Response (Emissions

Trading Reform) Amendment Act 2019
1 Interpretation 369
2 Satisfying requirements for making regulations 369
3 New regulations may commence on or after commencement of

clause
369

4 Making first regulations about overall limits and price controls for
units

369

5 Existing accounts continue 370
6 Deregistering participants for persistent non-compliance 370
7 Information to be published by EPA 370
8 Penalties 370
9 Consolidated group for activity relating to forestry 371
10 Pending offsetting forest land applications may be amended to

include new land
371

11 Approved offsetting forest land applications may be amended to
include new land

372

12 Approval of variation application 373
Tree weeds

16 Existing exemptions for deforestation of land with tree weeds 374
17 Carbon accounting areas with tree weeds already added to

post-1989 forest land
374

Changing of activity on post-1989 forest land
18 Previous changing of activity on post-1989 forest land 374
19 Application to change from standard to permanent forestry 374
20 Changing activity from PFSI activity prevented until 2021 375
21 All PFSI activity is changed to permanent forestry in 2022 375

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Carbon accounting areas (averaging)
22 Emissions returns for carbon accounting area (averaging) in third

mandatory emissions return period
375

23 Option to use averaging accounting for carbon accounting areas
constituted in 2019 and 2020

375

24 Preparing emissions return for carbon accounting areas changing
to averaging

376

25 Calculations for CAA1s changing to averaging 377
26 Effect of changing to carbon accounting areas (averaging) 378

Part 1
Provisions relating to Climate Change Response (Emissions Trading

Reform) Amendment Act 2019

1 Interpretation
In this Part,— 5
amendment Act means the Climate Change Response Amendment Act 2019
third mandatory emissions return period means the 5-year period starting on
1 January 2018 and ending on 31 December 2022.

2 Satisfying requirements for making regulations
(1) This clause applies to any requirement for the making of any regulations under 10

this Act as amended by the amendment Act.
(2) Anything done before the commencement of this clause satisfies the require-

ment as long as it would have satisfied the requirement if it had been done after
the commencement.

3 New regulations may commence on or after commencement of clause 15
Any regulations made under this Act before the commencement of this clause
may come into force on, or at any time after, that commencement, despite any-
thing in this Act.

4 Making first regulations about overall limits and price controls for units
(1) If regulations are to be made under section 30GB before there is an emissions 20

budget, section 30GC(2)(a) applies as if it instead referred to any provisional
budget for the emission of greenhouse gases that is set by the Crown.

(2) When an emissions budget is first set,—
(a) the Minister must recommend the making of regulations under section

30GB to prescribe new overall limits or price control settings as 25
required to comply with section 30GC(2); and

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(b) the Minister may recommend prescribing a new overall limit or price
control settings for 1 or both of the 2 calendar years after the year in
which the amendment is made, despite section 30GB(5).

5 Existing accounts continue
If any account established in the Registry (under section 7(1)(a), for example) 5
existed immediately before the commencement of this clause, it continues to
exist after the commencement.

6 Deregistering participants for persistent non-compliance
The EPA must not remove the name of a person from the register in respect of
an activity under section 59A if the failure on which the EPA relies occurred 10
before the commencement of this clause.

7 Information to be published by EPA
(1) Section 89(1A) and (1B) does not apply in respect of failures or errors made

by a person before 1 January 2021.
(2) For a reporting year beginning before 1 January 2023, the EPA is not required 15

to publish the information required under section 89(1)(e) in respect of an
activity or the information required under section 89(1)(i) if the EPA is satis-
fied that publishing the information would result in the disclosure of a partici-
pant’s individual emissions or an eligible person’s own allocation, unless—
(a) the participant or eligible person to whom the information relates has 20

consented to the publication of the information; or
(b) the information is already in the public domain.

(3) Section 89A does not apply in respect of an emissions return for emissions or
removals before 1 January 2020, unless—
(a) the return also relates to a period after 1 January 2020; and 25
(b) it is possible for emissions or removals occurring before 1 January 2020

to be excluded from the published information.
(4) Section 89A—

(a) applies in respect of emissions returns submitted under section 189AA
or 189AB for emissions or removals on or after 1 January 2020; but 30

(b) does not apply in respect of any other emissions returns in relation to
post-1989 forest land during a mandatory emissions returns period com-
mencing before 1 January 2023.

8 Penalties
(1) This clause applies in respect of a person who, before the commencement of 35

this clause,—
(a) fails to surrender or repay units by the due date; or

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(b) fails to submit an emissions return or annual or closing allocation adjust-
ment; or

(c) submits an incorrect emissions return, allocation application, or alloca-
tion adjustment.

(2) Sections 134 to 134D, as inserted by the amendment Act, do not apply in 5
respect of the person for the failure or error.

(3) This Act, as in force immediately before the commencement of this clause,
applies in respect of the person for the failure or error.

9 Consolidated group for activity relating to forestry
(1) In this clause, an existing forestry consolidated group means a consolidated 10

group that—
(a) was formed in respect of an activity or activities listed in Part 1 or 1A of

Schedule 3 or Part 1 or 1A of Schedule 4; and
(b) exists immediately before the commencement of this clause.

(2) Sections 150 and 151A do not apply to an existing forestry consolidated group 15
(so that no members or activities may be added to the group).

(3) The nominated entity of an existing forestry consolidated group—
(a) may submit a single emissions return under section 189AA in respect

of 1 or more of the activities of standard forestry carried out by a mem-
ber of the group in a year; and 20

(b) must submit any emissions return required under a provision of Part 5
on behalf of any member of the group when the member is required to
do so; and

(c) must sign any emissions return submitted by the nominated entity in
accordance with section 65(2)(f) on behalf of the group. 25

(4) In relation to an existing forestry consolidated group, section 153(2) to (4)
applies to the liability to surrender units or entitlement to be transferred units in
relation to an emissions return referred to in subclause (2) as if the references
in that section to a year were references to the period covered by the emissions
return. 30

(5) To avoid doubt, only the nominated entity for an existing forestry consolidated
group may submit an emissions return for the group.

10 Pending offsetting forest land applications may be amended to include new
land

(1) This clause applies to an offsetting forest land application (an existing applica- 35
tion) submitted under section 186A if, as at the commencement date, it has not
been accepted or declined under section 186B.

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(2) The applicants may, on request to the EPA, amend the application to include
land of the kind referred to in section 186B(1)(a)(ii)(F), (G), or (H) as well
as, or instead of, the originally proposed offsetting forest land.

(3) An application amended under this clause is to be treated as if it had originally
been submitted as amended. 5

(4) In this clause, commencement date means the date on which this clause came
into force.

11 Approved offsetting forest land applications may be amended to include
new land

(1) This clause applies to an offsetting forest land application (an existing applica- 10
tion) submitted under section 186A if—
(a) it was approved before the commencement date; but
(b) as at the commencement date, no declaration under section 186D had

been submitted.
(2) The owner of pre-1990 forest land that is the subject of the existing application 15

may apply to the EPA (a variation application) to substitute land of the kind
referred to in section 186B(1)(a)(ii)(F), (G), or (H) for some or all of the
offsetting forest land.

(3) The variation application must—
(a) identify the existing offsetting forest land that is to be replaced (area A); 20

and
(b) identify the land that is to be substituted for area A (area B); and
(c) include—

(i) any information in relation to area B that would be required in an
application under section 186A; and 25

(ii) any other information prescribed in the regulations made under
section 186F.

(4) The variation application must be made jointly by all of the owners of the
pre-1990 forest land and the offsetting forest land under the existing applica-
tion and the owner of area B. 30

(5) The variation application must—
(a) be signed by all of the applicants; and
(b) be submitted before the date on which the declaration under section

186D is required to be made in relation to the existing application; and
(c) be submitted— 35

(i) in the prescribed manner and format; and
(ii) together with the prescribed fee (if any); and
(iii) together with the prescribed information (if any).

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(6) In this clause, commencement date means the date on which this clause came
into force.

12 Approval of variation application
(1) If a person submits an application under clause 11, the EPA—

(a) if satisfied that the criteria in subclause (2) are met, must approve the 5
application; or

(b) otherwise, may decline the application.
(2) The criteria are that—

(a) the land in area B is land that meets the criteria in section
186B(1)(a)(ii)(F), (G), or (H); and 10

(b) if any of the land in area B is land that is in a carbon accounting area, all
of the land in the carbon accounting area is in part of area B; and

(c) the land that will be the offsetting forest land under the existing applica-
tion if the variation is approved (so excluding area A and including area
B) (the revised offset land) meets the criteria in section 186B(1)(b) 15
and (d); and

(d) the EPA is satisfied that the revised offset land is likely to meet the cri-
teria in section 186B(1)(c)(i) and (ii); and

(e) any other criteria prescribed in regulations made under section 186F
are met. 20

(3) If the EPA approves the application,—
(a) area A ceases to be part of the approved offset land; and
(b) area B becomes part of the approved offset land; and
(c) if area B includes any land in a carbon accounting area,—

(i) the participant for that carbon accounting area— 25
(A) is liable to surrender the number of New Zealand units

equal to the unit balance of that carbon accounting area;
and

(B) ceases to be a participant in the relevant activity on that car-
bon accounting area; and 30

(ii) the EPA must amend the register kept under section 57, and the
records of carbon accounting areas kept under section 188(2), to
record the effects of this paragraph; and

(d) this Act applies as if the existing application had been approved (on its
original approval date) in relation to the revised offset land. 35

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13 Surrender of units relating to permanent forestry
If, before 30 November 2020, a participant in permanent forestry becomes
liable to surrender New Zealand units under a provision of this Act, the partici-
pant may satisfy that liability by surrendering—
(a) New Zealand units; or 5
(b) New Zealand assigned amount units (as defined by regulation 3 of the

Climate Change (Unit Register) Regulations 2008); or
(c) a combination of those types of units.

[Clauses 14 and 15 intentionally left blank] 10

Tree weeds

16 Existing exemptions for deforestation of land with tree weeds
(1) This clause applies to land for which, immediately before the commencement

of this clause, there is an exemption under section 184.
(2) The exemption applies as if it had been granted under this Act as amended by 15

the amendment Act, so that the conditions in former section 184(6) no longer
apply.

17 Carbon accounting areas with tree weeds already added to post-1989
forest land
Section 188(5)(b) does not affect a carbon accounting area added to any 20
post-1989 forest land before the commencement of that provision.

Changing of activity on post-1989 forest land

18 Previous changing of activity on post-1989 forest land
(1) If a person satisfied section 188(9) before the commencement of this clause,

they must be treated as having had an application under section 194DA 25
approved to become registered as a participant in standard forestry (the final
activity) by changing from PFSI activity (the initial activity).

(2) See sections 194DA(6)(b) and 194EA(2)(c)(ii) for provisions to which this
clause relates.

19 Application to change from standard to permanent forestry 30
(1) This clause applies to a person who, in the period starting on 1 January 2018

and ending on 31 December 2022,—
(a) becomes registered as a participant carrying out standard forestry in

respect of any post-1989 forest land, whether or not registered in respect
of that land before; and 35

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(b) has an application under section 194DA approved to change from
standard forestry to permanent forestry on that land.

(2) For each CAA1 covered by the emissions return that accompanied the applica-
tion, the person may surrender any units that are equal in number to the unit
balance of the CAA1. 5

(3) The deadline for surrendering the units is 60 working days after the person sub-
mits the application.

(4) For each unit surrendered, the person becomes entitled to a unit for removals
from permanent forestry.

20 Changing activity from PFSI activity prevented until 2021 10
A participant in an initial activity of PFSI activity cannot apply under section
194DA to change to a final activity before 1 January 2021.

21 All PFSI activity is changed to permanent forestry in 2022
(1) This clause applies to a person’s forest land that a forest sink covenant is regis-

tered against immediately before 1 January 2022 (the PFSI land). 15
(2) On 1 January 2022,—

(a) the EPA must apply sections 194DA to 194DC as if the person had
that day submitted an application in accordance with section 194DA to
become a participant in a final activity of permanent forestry on the PFSI
land; but 20

(b) the EPA may apply section 121 for the purposes of the application.

Carbon accounting areas (averaging)

22 Emissions returns for carbon accounting area (averaging) in third
mandatory emissions return period

(1) This clause applies in relation to a carbon accounting area (CAA1) that 25
becomes a carbon accounting area (averaging) under section 194FC(3) dur-
ing the third mandatory emissions return period.

(2) In any emissions return in respect of a period in the third mandatory emissions
return period, the calculations and assessments in relation to CAA1 must be
made as if— 30
(a) CAA1 had been a carbon accounting area (averaging) since the begin-

ning of the period covered by the emissions return; and
(b) the amendment Act had come into in force before that date.

23 Option to use averaging accounting for carbon accounting areas
constituted in 2019 and 2020 35

(1) A participant in an activity of standard forestry on post-1989 forest land in 1 or
more carbon accounting areas (each a CAA1) that are covered by subclause

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(2) may give notice to the EPA to change the CAA1s into carbon accounting
areas (averaging).

(2) A carbon accounting area may be changed to averaging if—
(a) it is not a carbon accounting area (averaging) under section 194FC(3);

and 5
(b) its constitution date is after 31 December 2018 but before 1 January

2021; and
(c) it meets the requirements of section 194FC(3)(b); and
(d) before the notice is given under this clause, no other emissions return

has been (or should have been) submitted covering the carbon account- 10
ing area in relation to a period after 1 January 2023.

(3) The notice must—
(a) specify the CAA1s to which it relates; and
(b) include an emissions return prepared under clause 24 for the activity

that covers the CAA1s. 15
(4) The notice must—

(a) be signed by the participant; and
(b) be submitted on or before 30 June 2023; and
(c) be submitted—

(i) in the prescribed manner and format; and 20
(ii) together with the prescribed fee (if any); and
(iii) together with the prescribed information (if any).

24 Preparing emissions return for carbon accounting areas changing to
averaging

(1) An emissions return prepared under this clause must— 25
(a) specify—

(i) the CAA1s that the return covers; and
(ii) if the land in a CAA1 has not all been in CAA1 for the whole of

the emissions return period, all of the carbon accounting areas that
any of the land has been part of during the emissions return period 30
(the predecessor CAAs); and

(b) for each CAA1,—
(i) specify the activity for which the person is a participant on the

CAA1s; and
(ii) specify the emissions return period that applies under subclause 35

(2); and

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(iii) specify the emissions and removals during the emissions return
period from all of the land now in CAA1 (whether they occurred
when the land was part of CAA1 or part of a predecessor CAA);
and

(iv) set out the calculation under clause 25(1) of the person’s averag- 5
ing liability or entitlement for emissions and removals during the
emissions return period; and

(v) set out the calculation under clause 25(2) of the averaging unit
balance; and

(vi) set out the calculation under clause 25(4) of the person’s actual 10
liability or entitlement; and

(c) set out the calculation under clause 25(5) of the person’s total liability
or entitlement for all the CAA1s.

(2) The emissions return period for a CAA1 is the period that—
(a) starts on the later of— 15

(i) 1 January 2018; and
(ii) the date on which any of the land in the CAA1 became post-1989

forest land; and
(b) ends on 31 December 2022.

25 Calculations for CAA1s changing to averaging 20
(1) A person’s averaging liability or entitlement for a CAA1 (a) is calculated as

follows:
a = r − e

where—
r is the number of units required for the removals from the CAA1 during 25

the emissions return period, determined in accordance with subclause
(3)

e is the number of units required for the emissions from the CAA1 during
the emissions return period, determined in accordance with subclause
(3). 30

(2) The averaging unit balance of a CAA1 (u) is calculated as follows:
u = h + a

where—
h is the opening unit balance of the CAA1 determined in accordance with

subclause (3) 35

a is the person’s averaging liability or entitlement for the CAA1.
(3) The values of variables r, e, and h in subclauses (1) and (2) are to be deter-

mined as if—

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(a) all of the land now in the CAA1 had been a single carbon accounting
area since the beginning of the emissions return period; and

(b) that carbon accounting area had been a carbon accounting area (averag-
ing) since the beginning of the emissions return period; and

(c) the amendment Act had come into in force before the beginning of the 5
emissions return period.

(4) A person’s actual liability or entitlement for a CAA1 (h) is calculated as fol-
lows:

h = a − c
where— 10
a is the averaging unit balance of the CAA1 under subclause (3)
c is—

(a) the previous unit balance of the CAA1 calculated under the last
emissions return submitted for the CAA1; or

(b) if there is no such return, zero. 15
(5) A person’s total liability or entitlement for all the CAA1s (t) is calculated as

follows:
t = hn

where—
hn is the sum of the person’s actual liability or entitlement for each CAA1. 20

26 Effect of changing to carbon accounting areas (averaging)
(1) This clause applies if the EPA decides that a notice under clause 23 and the

accompanying emissions return are correct.
(2) If the person’s total liability or entitlement for the CAA1s covered by the emis-

sions return is— 25
(a) a positive number, the person is entitled to receive that number of New

Zealand units; or
(b) a negative number, the person is liable to surrender that number of New

Zealand units.
(3) The unit balance of each CAA1 covered by the emissions return is updated to 30

the averaging unit balance calculated under the return.
(4) Each CAA1 covered by the notice becomes a carbon accounting area (averag-

ing) and is to be treated as having done so on 1 January 2023.
(5) The person is not required to submit an emissions return under section

189AB covering the CAA1s covered by the notice. 35
(6) For the purpose of future calculations in relation to the CAA1s, the emissions

return accompanying the notice is a final forestry emissions return.

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Schedule 2
New Schedule 2A inserted

s 203

Schedule 2A
Paris Agreement 5

s 4

The Parties to this Agreement,
Being Parties to the United Nations Framework Convention on Climate Change, here-
inafter referred to as “the Convention”,
Pursuant to the Durban Platform for Enhanced Action established by decision 1/ 10
CP.17 of the Conference of the Parties to the Convention at its seventeenth session,
In pursuit of the objective of the Convention, and being guided by its principles,
including the principle of equity and common but differentiated responsibilities and
respective capabilities, in the light of different national circumstances,
Recognizing the need for an effective and progressive response to the urgent threat of 15
climate change on the basis of the best available scientific knowledge,
Also recognizing the specific needs and special circumstances of developing country
Parties, especially those that are particularly vulnerable to the adverse effects of cli-
mate change, as provided for in the Convention,
Taking full account of the specific needs and special situations of the least developed 20
countries with regard to funding and transfer of technology,
Recognizing that Parties may be affected not only by climate change, but also by the
impacts of the measures taken in response to it,
Emphasizing the intrinsic relationship that climate change actions, responses and
impacts have with equitable access to sustainable development and eradication of 25
poverty,
Recognizing the fundamental priority of safeguarding food security and ending hun-
ger, and the particular vulnerabilities of food production systems to the adverse
impacts of climate change,
Taking into account the imperatives of a just transition of the workforce and the crea- 30
tion of decent work and quality jobs in accordance with nationally defined develop-
ment priorities,
Acknowledging that climate change is a common concern of humankind, Parties
should, when taking action to address climate change, respect, promote and consider
their respective obligations on human rights, the right to health, the rights of indigen- 35
ous peoples, local communities, migrants, children, persons with disabilities and
people in vulnerable situations and the right to development, as well as gender equal-
ity, empowerment of women and intergenerational equity,

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Recognizing the importance of the conservation and enhancement, as appropriate, of
sinks and reservoirs of the greenhouse gases referred to in the Convention,
Noting the importance of ensuring the integrity of all ecosystems, including oceans,
and the protection of biodiversity, recognized by some cultures as Mother Earth, and
noting the importance for some of the concept of “climate justice”, when taking 5
action to address climate change,
Affirming the importance of education, training, public awareness, public participa-
tion, public access to information and cooperation at all levels on the matters
addressed in this Agreement,
Recognizing the importance of the engagements of all levels of government and vari- 10
ous actors, in accordance with respective national legislations of Parties, in address-
ing climate change,
Also recognizing that sustainable lifestyles and sustainable patterns of consumption
and production, with developed country Parties taking the lead, play an important role
in addressing climate change, 15
Have agreed as follows:

Article 1
For the purpose of this Agreement, the definitions contained in Article 1 of the Con-
vention shall apply. In addition:
(a) “Convention” means the United Nations Framework Convention on Climate 20

Change, adopted in New York on 9 May 1992;
(b) “Conference of the Parties” means the Conference of the Parties to the Conven-

tion;
(c) “Party” means a Party to this Agreement.

Article 2 25
1. This Agreement, in enhancing the implementation of the Convention, including

its objective, aims to strengthen the global response to the threat of climate
change, in the context of sustainable development and efforts to eradicate pov-
erty, including by:
(a) Holding the increase in the global average temperature to well below 30

2 °C above pre-industrial levels and pursuing efforts to limit the tem-
perature increase to 1.5 °C above pre-industrial levels, recognizing that
this would significantly reduce the risks and impacts of climate change;

(b) Increasing the ability to adapt to the adverse impacts of climate change
and foster climate resilience and low greenhouse gas emissions develop- 35
ment, in a manner that does not threaten food production; and

(c) Making finance flows consistent with a pathway towards low green-
house gas emissions and climate-resilient development.

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2. This Agreement will be implemented to reflect equity and the principle of com-
mon but differentiated responsibilities and respective capabilities, in the light
of different national circumstances.

Article 3
As nationally determined contributions to the global response to climate change, all 5
Parties are to undertake and communicate ambitious efforts as defined in Articles 4,
7, 9, 10, 11 and 13 with the view to achieving the purpose of this Agreement as set
out in Article 2. The efforts of all Parties will represent a progression over time, while
recognizing the need to support developing country Parties for the effective imple-
mentation of this Agreement. 10

Article 4
1. In order to achieve the long-term temperature goal set out in Article 2, Parties

aim to reach global peaking of greenhouse gas emissions as soon as possible,
recognizing that peaking will take longer for developing country Parties, and to
undertake rapid reductions thereafter in accordance with best available science, 15
so as to achieve a balance between anthropogenic emissions by sources and
removals by sinks of greenhouse gases in the second half of this century, on the
basis of equity, and in the context of sustainable development and efforts to
eradicate poverty.

2. Each Party shall prepare, communicate and maintain successive nationally 20
determined contributions that it intends to achieve. Parties shall pursue domes-
tic mitigation measures, with the aim of achieving the objectives of such con-
tributions.

3. Each Party’s successive nationally determined contribution will represent a
progression beyond the Party’s then current nationally determined contribution 25
and reflect its highest possible ambition, reflecting its common but differenti-
ated responsibilities and respective capabilities, in the light of different national
circumstances.

4. Developed country Parties should continue taking the lead by undertaking
economy-wide absolute emission reduction targets. Developing country Parties 30
should continue enhancing their mitigation efforts, and are encouraged to move
over time towards economy-wide emission reduction or limitation targets in the
light of different national circumstances.

5. Support shall be provided to developing country Parties for the implementation
of this Article, in accordance with Articles 9, 10 and 11, recognizing that 35
enhanced support for developing country Parties will allow for higher ambition
in their actions.

6. The least developed countries and small island developing States may prepare
and communicate strategies, plans and actions for low greenhouse gas emis-
sions development reflecting their special circumstances. 40

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7. Mitigation co-benefits resulting from Parties’ adaptation actions and/or eco-
nomic diversification plans can contribute to mitigation outcomes under this
Article.

8. In communicating their nationally determined contributions, all Parties shall
provide the information necessary for clarity, transparency and understanding 5
in accordance with decision 1/CP.21 and any relevant decisions of the Confer-
ence of the Parties serving as the meeting of the Parties to this Agreement.

9. Each Party shall communicate a nationally determined contribution every five
years in accordance with decision 1/CP.21 and any relevant decisions of the
Conference of the Parties serving as the meeting of the Parties to this Agree- 10
ment and be informed by the outcomes of the global stocktake referred to in
Article 14.

10. The Conference of the Parties serving as the meeting of the Parties to this
Agreement shall consider common time frames for nationally determined con-
tributions at its first session. 15

11. A Party may at any time adjust its existing nationally determined contribution
with a view to enhancing its level of ambition, in accordance with guidance
adopted by the Conference of the Parties serving as the meeting of the Parties
to this Agreement.

12. Nationally determined contributions communicated by Parties shall be recor- 20
ded in a public registry maintained by the secretariat.

13. Parties shall account for their nationally determined contributions. In account-
ing for anthropogenic emissions and removals corresponding to their nationally
determined contributions, Parties shall promote environmental integrity, trans-
parency, accuracy, completeness, comparability and consistency, and ensure the 25
avoidance of double counting, in accordance with guidance adopted by the
Conference of the Parties serving as the meeting of the Parties to this Agree-
ment.

14. In the context of their nationally determined contributions, when recognizing
and implementing mitigation actions with respect to anthropogenic emissions 30
and removals, Parties should take into account, as appropriate, existing
methods and guidance under the Convention, in the light of the provisions of
paragraph 13 of this Article.

15. Parties shall take into consideration in the implementation of this Agreement
the concerns of Parties with economies most affected by the impacts of 35
response measures, particularly developing country Parties.

16. Parties, including regional economic integration organizations and their mem-
ber States, that have reached an agreement to act jointly under paragraph 2 of
this Article shall notify the secretariat of the terms of that agreement, including
the emission level allocated to each Party within the relevant time period, when 40
they communicate their nationally determined contributions. The secretariat

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shall in turn inform the Parties and signatories to the Convention of the terms
of that agreement.

17. Each party to such an agreement shall be responsible for its emission level as
set out in the agreement referred to in paragraph 16 of this Article in accord-
ance with paragraphs 13 and 14 of this Article and Articles 13 and 15. 5

18. If Parties acting jointly do so in the framework of, and together with, a regional
economic integration organization which is itself a Party to this Agreement,
each member State of that regional economic integration organization individu-
ally, and together with the regional economic integration organization, shall be
responsible for its emission level as set out in the agreement communicated 10
under paragraph 16 of this Article in accordance with paragraphs 13 and 14 of
this Article and Articles 13 and 15.

19. All Parties should strive to formulate and communicate long-term low green-
house gas emission development strategies, mindful of Article 2 taking into
account their common but differentiated responsibilities and respective capabil- 15
ities, in the light of different national circumstances.

Article 5
1. Parties should take action to conserve and enhance, as appropriate, sinks and

reservoirs of greenhouse gases as referred to in Article 4, paragraph 1(d), of the
Convention, including forests. 20

2. Parties are encouraged to take action to implement and support, including
through results-based payments, the existing framework as set out in related
guidance and decisions already agreed under the Convention for: policy
approaches and positive incentives for activities relating to reducing emissions
from deforestation and forest degradation, and the role of conservation, sustain- 25
able management of forests and enhancement of forest carbon stocks in devel-
oping countries; and alternative policy approaches, such as joint mitigation and
adaptation approaches for the integral and sustainable management of forests,
while reaffirming the importance of incentivizing, as appropriate, non-carbon
benefits associated with such approaches. 30

Article 6
1. Parties recognize that some Parties choose to pursue voluntary cooperation in

the implementation of their nationally determined contributions to allow for
higher ambition in their mitigation and adaptation actions and to promote sus-
tainable development and environmental integrity. 35

2. Parties shall, where engaging on a voluntary basis in cooperative approaches
that involve the use of internationally transferred mitigation outcomes towards
nationally determined contributions, promote sustainable development and
ensure environmental integrity and transparency, including in governance, and
shall apply robust accounting to ensure, inter alia, the avoidance of double 40

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counting, consistent with guidance adopted by the Conference of the Parties
serving as the meeting of the Parties to this Agreement.

3. The use of internationally transferred mitigation outcomes to achieve nation-
ally determined contributions under this Agreement shall be voluntary and
authorized by participating Parties. 5

4. A mechanism to contribute to the mitigation of greenhouse gas emissions and
support sustainable development is hereby established under the authority and
guidance of the Conference of the Parties serving as the meeting of the Parties
to this Agreement for use by Parties on a voluntary basis. It shall be supervised
by a body designated by the Conference of the Parties serving as the meeting of 10
the Parties to this Agreement, and shall aim:
(a) To promote the mitigation of greenhouse gas emissions while fostering

sustainable development;
(b) To incentivize and facilitate participation in the mitigation of greenhouse

gas emissions by public and private entities authorized by a Party; 15
(c) To contribute to the reduction of emission levels in the host Party, which

will benefit from mitigation activities resulting in emission reductions
that can also be used by another Party to fulfil its nationally determined
contribution; and

(d) To deliver an overall mitigation in global emissions. 20
5. Emission reductions resulting from the mechanism referred to in paragraph 4

of this Article shall not be used to demonstrate achievement of the host Party’s
nationally determined contribution if used by another Party to demonstrate
achievement of its nationally determined contribution.

6. The Conference of the Parties serving as the meeting of the Parties to this 25
Agreement shall ensure that a share of the proceeds from activities under the
mechanism referred to in paragraph 4 of this Article is used to cover adminis-
trative expenses as well as to assist developing country Parties that are particu-
larly vulnerable to the adverse effects of climate change to meet the costs of
adaptation. 30

7. The Conference of the Parties serving as the meeting of the Parties to this
Agreement shall adopt rules, modalities and procedures for the mechanism
referred to in paragraph 4 of this Article at its first session.

8. Parties recognize the importance of integrated, holistic and balanced non-mar-
ket approaches being available to Parties to assist in the implementation of 35
their nationally determined contributions, in the context of sustainable develop-
ment and poverty eradication, in a coordinated and effective manner, including
through, inter alia, mitigation, adaptation, finance, technology transfer and cap-
acity-building, as appropriate. These approaches shall aim to:
(a) Promote mitigation and adaptation ambition; 40

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(b) Enhance public and private sector participation in the implementation of
nationally determined contributions; and

(c) Enable opportunities for coordination across instruments and relevant
institutional arrangements.

9. A framework for non-market approaches to sustainable development is hereby 5
defined to promote the non-market approaches referred to in paragraph 8 of
this Article.

Article 7
1. Parties hereby establish the global goal on adaptation of enhancing adaptive

capacity, strengthening resilience and reducing vulnerability to climate change, 10
with a view to contributing to sustainable development and ensuring an
adequate adaptation response in the context of the temperature goal referred to
in Article 2.

2. Parties recognize that adaptation is a global challenge faced by all with local,
subnational, national, regional and international dimensions, and that it is a key 15
component of and makes a contribution to the long-term global response to cli-
mate change to protect people, livelihoods and ecosystems, taking into account
the urgent and immediate needs of those developing country Parties that are
particularly vulnerable to the adverse effects of climate change.

3. The adaptation efforts of developing country Parties shall be recognized, in 20
accordance with the modalities to be adopted by the Conference of the Parties
serving as the meeting of the Parties to this Agreement at its first session.

4. Parties recognize that the current need for adaptation is significant and that
greater levels of mitigation can reduce the need for additional adaptation
efforts, and that greater adaptation needs can involve greater adaptation costs. 25

5. Parties acknowledge that adaptation action should follow a country-driven,
gender-responsive, participatory and fully transparent approach, taking into
consideration vulnerable groups, communities and ecosystems, and should be
based on and guided by the best available science and, as appropriate, trad-
itional knowledge, knowledge of indigenous peoples and local knowledge sys- 30
tems, with a view to integrating adaptation into relevant socioeconomic and
environmental policies and actions, where appropriate.

6. Parties recognize the importance of support for and international cooperation
on adaptation efforts and the importance of taking into account the needs of
developing country Parties, especially those that are particularly vulnerable to 35
the adverse effects of climate change.

7. Parties should strengthen their cooperation on enhancing action on adaptation,
taking into account the Cancun Adaptation Framework, including with regard
to:

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(a) Sharing information, good practices, experiences and lessons learned,
including, as appropriate, as these relate to science, planning, policies
and implementation in relation to adaptation actions;

(b) Strengthening institutional arrangements, including those under the Con-
vention that serve this Agreement, to support the synthesis of relevant 5
information and knowledge, and the provision of technical support and
guidance to Parties;

(c) Strengthening scientific knowledge on climate, including research, sys-
tematic observation of the climate system and early warning systems, in
a manner that informs climate services and supports decision-making; 10

(d) Assisting developing country Parties in identifying effective adaptation
practices, adaptation needs, priorities, support provided and received for
adaptation actions and efforts, and challenges and gaps, in a manner con-
sistent with encouraging good practices; and

(e) Improving the effectiveness and durability of adaptation actions. 15
8. United Nations specialized organizations and agencies are encouraged to sup-

port the efforts of Parties to implement the actions referred to in paragraph 7 of
this Article, taking into account the provisions of paragraph 5 of this Article.

9. Each Party shall, as appropriate, engage in adaptation planning processes and
the implementation of actions, including the development or enhancement of 20
relevant plans, policies and/or contributions, which may include:
(a) The implementation of adaptation actions, undertakings and/or efforts;
(b) The process to formulate and implement national adaptation plans;
(c) The assessment of climate change impacts and vulnerability, with a view

to formulating nationally determined prioritized actions, taking into 25
account vulnerable people, places and ecosystems;

(d) Monitoring and evaluating and learning from adaptation plans, policies,
programmes and actions; and

(e) Building the resilience of socioeconomic and ecological systems, includ-
ing through economic diversification and sustainable management of 30
natural resources.

10. Each Party should, as appropriate, submit and update periodically an adaptation
communication, which may include its priorities, implementation and support
needs, plans and actions, without creating any additional burden for developing
country Parties. 35

11. The adaptation communication referred to in paragraph 10 of this Article shall
be, as appropriate, submitted and updated periodically, as a component of or in
conjunction with other communications or documents, including a national
adaptation plan, a nationally determined contribution as referred to in Article 4,
paragraph 2, and/or a national communication. 40

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12. The adaptation communications referred to in paragraph 10 of this Article shall
be recorded in a public registry maintained by the secretariat.

13. Continuous and enhanced international support shall be provided to developing
country Parties for the implementation of paragraphs 7, 9, 10 and 11 of this
Article, in accordance with the provisions of Articles 9, 10 and 11. 5

14. The global stocktake referred to in Article 14 shall, inter alia:
(a) Recognize adaptation efforts of developing country Parties;
(b) Enhance the implementation of adaptation action taking into account the

adaptation communication referred to in paragraph 10 of this Article;
(c) Review the adequacy and effectiveness of adaptation and support provi- 10

ded for adaptation; and
(d) Review the overall progress made in achieving the global goal on adap-

tation referred to in paragraph 1 of this Article.

Article 8
1. Parties recognize the importance of averting, minimizing and addressing loss 15

and damage associated with the adverse effects of climate change, including
extreme weather events and slow onset events, and the role of sustainable
development in reducing the risk of loss and damage.

2. The Warsaw International Mechanism for Loss and Damage associated with
Climate Change Impacts shall be subject to the authority and guidance of the 20
Conference of the Parties serving as the meeting of the Parties to this Agree-
ment and may be enhanced and strengthened, as determined by the Conference
of the Parties serving as the meeting of the Parties to this Agreement.

3. Parties should enhance understanding, action and support, including through
the Warsaw International Mechanism, as appropriate, on a cooperative and 25
facilitative basis with respect to loss and damage associated with the adverse
effects of climate change.

4. Accordingly, areas of cooperation and facilitation to enhance understanding,
action and support may include:
(a) Early warning systems; 30
(b) Emergency preparedness;
(c) Slow onset events;
(d) Events that may involve irreversible and permanent loss and damage;
(e) Comprehensive risk assessment and management;
(f) Risk insurance facilities, climate risk pooling and other insurance solu- 35

tions;
(g) Non-economic losses; and
(h) Resilience of communities, livelihoods and ecosystems.

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5. The Warsaw International Mechanism shall collaborate with existing bodies
and expert groups under the Agreement, as well as relevant organizations and
expert bodies outside the Agreement.

Article 9
1. Developed country Parties shall provide financial resources to assist develop- 5

ing country Parties with respect to both mitigation and adaptation in continu-
ation of their existing obligations under the Convention.

2. Other Parties are encouraged to provide or continue to provide such support
voluntarily.

3. As part of a global effort, developed country Parties should continue to take the 10
lead in mobilizing climate finance from a wide variety of sources, instruments
and channels, noting the significant role of public funds, through a variety of
actions, including supporting country-driven strategies, and taking into account
the needs and priorities of developing country Parties. Such mobilization of cli-
mate finance should represent a progression beyond previous efforts. 15

4. The provision of scaled-up financial resources should aim to achieve a balance
between adaptation and mitigation, taking into account country-driven strat-
egies, and the priorities and needs of developing country Parties, especially
those that are particularly vulnerable to the adverse effects of climate change
and have significant capacity constraints, such as the least developed countries 20
and small island developing States, considering the need for public and grant-
based resources for adaptation.

5. Developed country Parties shall biennially communicate indicative quantitative
and qualitative information related to paragraphs 1 and 3 of this Article, as
applicable, including, as available, projected levels of public financial 25
resources to be provided to developing country Parties. Other Parties providing
resources are encouraged to communicate biennially such information on a vol-
untary basis.

6. The global stocktake referred to in Article 14 shall take into account the rele-
vant information provided by developed country Parties and/or Agreement 30
bodies on efforts related to climate finance.

7. Developed country Parties shall provide transparent and consistent information
on support for developing country Parties provided and mobilized through pub-
lic interventions biennially in accordance with the modalities, procedures and
guidelines to be adopted by the Conference of the Parties serving as the meet- 35
ing of the Parties to this Agreement, at its first session, as stipulated in Article
13, paragraph 13. Other Parties are encouraged to do so.

8. The Financial Mechanism of the Convention, including its operating entities,
shall serve as the financial mechanism of this Agreement.

9. The institutions serving this Agreement, including the operating entities of the 40
Financial Mechanism of the Convention, shall aim to ensure efficient access to

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financial resources through simplified approval procedures and enhanced readi-
ness support for developing country Parties, in particular for the least devel-
oped countries and small island developing States, in the context of their
national climate strategies and plans.

Article 10 5
1. Parties share a long-term vision on the importance of fully realizing technology

development and transfer in order to improve resilience to climate change and
to reduce greenhouse gas emissions.

2. Parties, noting the importance of technology for the implementation of mitiga-
tion and adaptation actions under this Agreement and recognizing existing 10
technology deployment and dissemination efforts, shall strengthen cooperative
action on technology development and transfer.

3. The Technology Mechanism established under the Convention shall serve this
Agreement.

4. A technology framework is hereby established to provide overarching guidance 15
to the work of the Technology Mechanism in promoting and facilitating
enhanced action on technology development and transfer in order to support
the implementation of this Agreement, in pursuit of the long-term vision
referred to in paragraph 1 of this Article.

5. Accelerating, encouraging and enabling innovation is critical for an effective, 20
long-term global response to climate change and promoting economic growth
and sustainable development. Such effort shall be, as appropriate, supported,
including by the Technology Mechanism and, through financial means, by the
Financial Mechanism of the Convention, for collaborative approaches to
research and development, and facilitating access to technology, in particular 25
for early stages of the technology cycle, to developing country Parties.

6. Support, including financial support, shall be provided to developing country
Parties for the implementation of this Article, including for strengthening
cooperative action on technology development and transfer at different stages
of the technology cycle, with a view to achieving a balance between support 30
for mitigation and adaptation. The global stocktake referred to in Article 14
shall take into account available information on efforts related to support on
technology development and transfer for developing country Parties.

Article 11
1. Capacity-building under this Agreement should enhance the capacity and abil- 35

ity of developing country Parties, in particular countries with the least capacity,
such as the least developed countries, and those that are particularly vulnerable
to the adverse effects of climate change, such as small island developing States,
to take effective climate change action, including, inter alia, to implement
adaptation and mitigation actions, and should facilitate technology develop- 40

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ment, dissemination and deployment, access to climate finance, relevant
aspects of education, training and public awareness, and the transparent, timely
and accurate communication of information.

2. Capacity-building should be country-driven, based on and responsive to
national needs, and foster country ownership of Parties, in particular, for devel- 5
oping country Parties, including at the national, subnational and local levels.
Capacity-building should be guided by lessons learned, including those from
capacity-building activities under the Convention, and should be an effective,
iterative process that is participatory, cross-cutting and gender-responsive.

3. All Parties should cooperate to enhance the capacity of developing country Par- 10
ties to implement this Agreement. Developed country Parties should enhance
support for capacity-building actions in developing country Parties.

4. All Parties enhancing the capacity of developing country Parties to implement
this Agreement, including through regional, bilateral and multilateral
approaches, shall regularly communicate on these actions or measures on cap- 15
acity-building. Developing country Parties should regularly communicate pro-
gress made on implementing capacity-building plans, policies, actions or meas-
ures to implement this Agreement.

5. Capacity-building activities shall be enhanced through appropriate institutional
arrangements to support the implementation of this Agreement, including the 20
appropriate institutional arrangements established under the Convention that
serve this Agreement. The Conference of the Parties serving as the meeting of
the Parties to this Agreement shall, at its first session, consider and adopt a
decision on the initial institutional arrangements for capacity-building.

Article 12 25
Parties shall cooperate in taking measures, as appropriate, to enhance climate change
education, training, public awareness, public participation and public access to infor-
mation, recognizing the importance of these steps with respect to enhancing actions
under this Agreement.

Article 13 30
1. In order to build mutual trust and confidence and to promote effective imple-

mentation, an enhanced transparency framework for action and support, with
built-in flexibility which takes into account Parties’ different capacities and
builds upon collective experience is hereby established.

2. The transparency framework shall provide flexibility in the implementation of 35
the provisions of this Article to those developing country Parties that need it in
the light of their capacities. The modalities, procedures and guidelines referred
to in paragraph 13 of this Article shall reflect such flexibility.

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3. The transparency framework shall build on and enhance the transparency
arrangements under the Convention, recognizing the special circumstances of
the least developed countries and small island developing States, and be imple-
mented in a facilitative, non-intrusive, non-punitive manner, respectful of
national sovereignty, and avoid placing undue burden on Parties. 5

4. The transparency arrangements under the Convention, including national com-
munications, biennial reports and biennial update reports, international assess-
ment and review and international consultation and analysis, shall form part of
the experience drawn upon for the development of the modalities, procedures
and guidelines under paragraph 13 of this Article. 10

5. The purpose of the framework for transparency of action is to provide a clear
understanding of climate change action in the light of the objective of the Con-
vention as set out in its Article 2, including clarity and tracking of progress
towards achieving Parties’ individual nationally determined contributions
under Article 4, and Parties’ adaptation actions under Article 7, including good 15
practices, priorities, needs and gaps, to inform the global stocktake under Art-
icle 14.

6. The purpose of the framework for transparency of support is to provide clarity
on support provided and received by relevant individual Parties in the context
of climate change actions under Articles 4, 7, 9, 10 and 11, and, to the extent 20
possible, to provide a full overview of aggregate financial support provided, to
inform the global stocktake under Article 14.

7. Each Party shall regularly provide the following information:
(a) A national inventory report of anthropogenic emissions by sources and

removals by sinks of greenhouse gases, prepared using good practice 25
methodologies accepted by the Intergovernmental Panel on Climate
Change and agreed upon by the Conference of the Parties serving as the
meeting of the Parties to this Agreement; and

(b) Information necessary to track progress made in implementing and ach-
ieving its nationally determined contribution under Article 4. 30

8. Each Party should also provide information related to climate change impacts
and adaptation under Article 7, as appropriate.

9. Developed country Parties shall, and other Parties that provide support should,
provide information on financial, technology transfer and capacity-building
support provided to developing country Parties under Articles 9, 10 and 11. 35

10. Developing country Parties should provide information on financial, technol-
ogy transfer and capacity-building support needed and received under Articles
9, 10 and 11.

11. Information submitted by each Party under paragraphs 7 and 9 of this Article
shall undergo a technical expert review, in accordance with decision 1/CP.21. 40
For those developing country Parties that need it in the light of their capacities,
the review process shall include assistance in identifying capacity-building

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needs. In addition, each Party shall participate in a facilitative, multilateral con-
sideration of progress with respect to efforts under Article 9, and its respective
implementation and achievement of its nationally determined contribution.

12. The technical expert review under this paragraph shall consist of a consider-
ation of the Party’s support provided, as relevant, and its implementation and 5
achievement of its nationally determined contribution. The review shall also
identify areas of improvement for the Party, and include a review of the consis-
tency of the information with the modalities, procedures and guidelines
referred to in paragraph 13 of this Article, taking into account the flexibility
accorded to the Party under paragraph 2 of this Article. The review shall pay 10
particular attention to the respective national capabilities and circumstances of
developing country Parties.

13. The Conference of the Parties serving as the meeting of the Parties to this
Agreement shall, at its first session, building on experience from the arrange-
ments related to transparency under the Convention, and elaborating on the 15
provisions in this Article, adopt common modalities, procedures and guide-
lines, as appropriate, for the transparency of action and support.

14. Support shall be provided to developing countries for the implementation of
this Article.

15. Support shall also be provided for the building of transparency-related capacity 20
of developing country Parties on a continuous basis.

Article 14
1. The Conference of the Parties serving as the meeting of the Parties to this

Agreement shall periodically take stock of the implementation of this Agree-
ment to assess the collective progress towards achieving the purpose of this 25
Agreement and its long-term goals (referred to as the “global stocktake”). It
shall do so in a comprehensive and facilitative manner, considering mitigation,
adaptation and the means of implementation and support, and in the light of
equity and the best available science.

2. The Conference of the Parties serving as the meeting of the Parties to this 30
Agreement shall undertake its first global stocktake in 2023 and every five
years thereafter unless otherwise decided by the Conference of the Parties serv-
ing as the meeting of the Parties to this Agreement.

3. The outcome of the global stocktake shall inform Parties in updating and
enhancing, in a nationally determined manner, their actions and support in 35
accordance with the relevant provisions of this Agreement, as well as in
enhancing international cooperation for climate action.

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Article 15
1. A mechanism to facilitate implementation of and promote compliance with the

provisions of this Agreement is hereby established.
2. The mechanism referred to in paragraph 1 of this Article shall consist of a com-

mittee that shall be expert-based and facilitative in nature and function in a 5
manner that is transparent, non-adversarial and non-punitive. The committee
shall pay particular attention to the respective national capabilities and circum-
stances of Parties.

3. The committee shall operate under the modalities and procedures adopted by
the Conference of the Parties serving as the meeting of the Parties to this 10
Agreement at its first session and report annually to the Conference of the Par-
ties serving as the meeting of the Parties to this Agreement.

Article 16
1. The Conference of the Parties, the supreme body of the Convention, shall serve

as the meeting of the Parties to this Agreement. 15
2. Parties to the Convention that are not Parties to this Agreement may participate

as observers in the proceedings of any session of the Conference of the Parties
serving as the meeting of the Parties to this Agreement. When the Conference
of the Parties serves as the meeting of the Parties to this Agreement, decisions
under this Agreement shall be taken only by those that are Parties to this 20
Agreement.

3. When the Conference of the Parties serves as the meeting of the Parties to this
Agreement, any member of the Bureau of the Conference of the Parties repre-
senting a Party to the Convention but, at that time, not a Party to this Agree-
ment, shall be replaced by an additional member to be elected by and from 25
amongst the Parties to this Agreement.

4. The Conference of the Parties serving as the meeting of the Parties to this
Agreement shall keep under regular review the implementation of this Agree-
ment and shall make, within its mandate, the decisions necessary to promote its
effective implementation. It shall perform the functions assigned to it by this 30
Agreement and shall:
(a) Establish such subsidiary bodies as deemed necessary for the implemen-

tation of this Agreement; and
(b) Exercise such other functions as may be required for the implementation

of this Agreement. 35
5. The rules of procedure of the Conference of the Parties and the financial pro-

cedures applied under the Convention shall be applied mutatis mutandis under
this Agreement, except as may be otherwise decided by consensus by the Con-
ference of the Parties serving as the meeting of the Parties to this Agreement.

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6. The first session of the Conference of the Parties serving as the meeting of the
Parties to this Agreement shall be convened by the secretariat in conjunction
with the first session of the Conference of the Parties that is scheduled after the
date of entry into force of this Agreement. Subsequent ordinary sessions of the
Conference of the Parties serving as the meeting of the Parties to this Agree- 5
ment shall be held in conjunction with ordinary sessions of the Conference of
the Parties, unless otherwise decided by the Conference of the Parties serving
as the meeting of the Parties to this Agreement.

7. Extraordinary sessions of the Conference of the Parties serving as the meeting
of the Parties to this Agreement shall be held at such other times as may be 10
deemed necessary by the Conference of the Parties serving as the meeting of
the Parties to this Agreement or at the written request of any Party, provided
that, within six months of the request being communicated to the Parties by the
secretariat, it is supported by at least one third of the Parties.

8. The United Nations and its specialized agencies and the International Atomic 15
Energy Agency, as well as any State member thereof or observers thereto not
party to the Convention, may be represented at sessions of the Conference of
the Parties serving as the meeting of the Parties to this Agreement as observers.
Any body or agency, whether national or international, governmental or non-
governmental, which is qualified in matters covered by this Agreement and 20
which has informed the secretariat of its wish to be represented at a session of
the Conference of the Parties serving as the meeting of the Parties to this
Agreement as an observer, may be so admitted unless at least one third of the
Parties present object. The admission and participation of observers shall be
subject to the rules of procedure referred to in paragraph 5 of this Article. 25

Article 17
1. The secretariat established by Article 8 of the Convention shall serve as the

secretariat of this Agreement.
2. Article 8, paragraph 2, of the Convention on the functions of the secretariat,

and Article 8, paragraph 3, of the Convention, on the arrangements made for 30
the functioning of the secretariat, shall apply mutatis mutandis to this Agree-
ment. The secretariat shall, in addition, exercise the functions assigned to it
under this Agreement and by the Conference of the Parties serving as the meet-
ing of the Parties to this Agreement.

Article 18 35
1. The Subsidiary Body for Scientific and Technological Advice and the Subsid-

iary Body for Implementation established by Articles 9 and 10 of the Conven-
tion shall serve, respectively, as the Subsidiary Body for Scientific and Techno-
logical Advice and the Subsidiary Body for Implementation of this Agreement.
The provisions of the Convention relating to the functioning of these two bod- 40

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ies shall apply mutatis mutandis to this Agreement. Sessions of the meetings of
the Subsidiary Body for Scientific and Technological Advice and the Subsid-
iary Body for Implementation of this Agreement shall be held in conjunction
with the meetings of, respectively, the Subsidiary Body for Scientific and Tech-
nological Advice and the Subsidiary Body for Implementation of the Conven- 5
tion.

2. Parties to the Convention that are not Parties to this Agreement may participate
as observers in the proceedings of any session of the subsidiary bodies. When
the subsidiary 14 bodies serve as the subsidiary bodies of this Agreement, deci-
sions under this Agreement shall be taken only by those that are Parties to this 10
Agreement.

3. When the subsidiary bodies established by Articles 9 and 10 of the Convention
exercise their functions with regard to matters concerning this Agreement, any
member of the bureaux of those subsidiary bodies representing a Party to the
Convention but, at that time, not a Party to this Agreement, shall be replaced 15
by an additional member to be elected by and from amongst the Parties to this
Agreement.

Article 19
1. Subsidiary bodies or other institutional arrangements established by or under

the Convention, other than those referred to in this Agreement, shall serve this 20
Agreement upon a decision of the Conference of the Parties serving as the
meeting of the Parties to this Agreement. The Conference of the Parties serving
as the meeting of the Parties to this Agreement shall specify the functions to be
exercised by such subsidiary bodies or arrangements.

2. The Conference of the Parties serving as the meeting of the Parties to this 25
Agreement may provide further guidance to such subsidiary bodies and institu-
tional arrangements.

Article 20
1. This Agreement shall be open for signature and subject to ratification, accept-

ance or approval by States and regional economic integration organizations that 30
are Parties to the Convention. It shall be open for signature at the United
Nations Headquarters in New York from 22 April 2016 to 21 April 2017.
Thereafter, this Agreement shall be open for accession from the day following
the date on which it is closed for signature. Instruments of ratification, accept-
ance, approval or accession shall be deposited with the Depositary. 35

2. Any regional economic integration organization that becomes a Party to this
Agreement without any of its member States being a Party shall be bound by
all the obligations under this Agreement. In the case of regional economic inte-
gration organizations with one or more member States that are Parties to this
Agreement, the organization and its member States shall decide on their 40

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respective responsibilities for the performance of their obligations under this
Agreement. In such cases, the organization and the member States shall not be
entitled to exercise rights under this Agreement concurrently.

3. In their instruments of ratification, acceptance, approval or accession, regional
economic integration organizations shall declare the extent of their competence 5
with respect to the matters governed by this Agreement. These organizations
shall also inform the Depositary, who shall in turn inform the Parties, of any
substantial modification in the extent of their competence.

Article 21
1. This Agreement shall enter into force on the thirtieth day after the date on 10

which at least 55 Parties to the Convention accounting in total for at least an
estimated 55 per cent of the total global greenhouse gas emissions have depos-
ited their instruments of ratification, acceptance, approval or accession.

2. Solely for the limited purpose of paragraph 1 of this Article, “total global
greenhouse gas emissions” means the most up-to-date amount communicated 15
on or before the date of adoption of this Agreement by the Parties to the Con-
vention.

3. For each State or regional economic integration organization that ratifies,
accepts or approves this Agreement or accedes thereto after the conditions set
out in paragraph 1 of this Article for entry into force have been fulfilled, this 20
Agreement shall enter into force on the thirtieth day after the date of deposit by
such State or regional economic integration organization of its instrument of
ratification, acceptance, approval or accession.

4. For the purposes of paragraph 1 of this Article, any instrument deposited by a
regional economic integration organization shall not be counted as additional to 25
those deposited by its member States.

Article 22
The provisions of Article 15 of the Convention on the adoption of amendments to the
Convention shall apply mutatis mutandis to this Agreement.

Article 23 30
1. The provisions of Article 16 of the Convention on the adoption and amendment

of annexes to the Convention shall apply mutatis mutandis to this Agreement.
2. Annexes to this Agreement shall form an integral part thereof and, unless

otherwise expressly provided for, a reference to this Agreement constitutes at
the same time a reference to any annexes thereto. Such annexes shall be restric- 35
ted to lists, forms and any other material of a descriptive nature that is of a sci-
entific, technical, procedural or administrative character.

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Article 24
The provisions of Article 14 of the Convention on settlement of disputes shall apply
mutatis mutandis to this Agreement.

Article 25
1. Each Party shall have one vote, except as provided for in paragraph 2 of this 5

Article.
2. Regional economic integration organizations, in matters within their compe-

tence, shall exercise their right to vote with a number of votes equal to the
number of their member States that are Parties to this Agreement. Such an
organization shall not exercise its right to vote if any of its member States exer- 10
cises its right, and vice versa.

Article 26
The Secretary-General of the United Nations shall be the Depositary of this Agree-
ment.

Article 27 15
No reservations may be made to this Agreement.

Article 28
1. At any time after three years from the date on which this Agreement has

entered into force for a Party, that Party may withdraw from this Agreement by
giving written notification to the Depositary. 20

2. Any such withdrawal shall take effect upon expiry of one year from the date of
receipt by the Depositary of the notification of withdrawal, or on such later
date as may be specified in the notification of withdrawal.

3. Any Party that withdraws from the Convention shall be considered as also hav-
ing withdrawn from this Agreement. 25

Article 29
The original of this Agreement, of which the Arabic, Chinese, English, French, Rus-
sian and Spanish texts are equally authentic, shall be deposited with the Secretary-
General of the United Nations.

DONE at Paris this twelfth day of December two thousand and fifteen. 30
IN WITNESS WHEREOF, the undersigned, being duly authorized to that effect, have
signed this Agreement.

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Schedule 2A
New Schedule 5 inserted

s 198 205A

Schedule 5
Primary sector climate change commitments 5

s 220

Farm emissions reporting
(1) For 25% of farms in New Zealand, a person responsible for farm management

holds a documented annual total of on-farm greenhouse gas emissions, by
methods and definitions accepted by the He Waka Eke Noa Steering group, by 10
31 December 2021.

(2) For all farms in New Zealand, a person responsible for farm management holds
a documented annual total of on-farm greenhouse gas emissions, by methods
and definitions accepted by the He Waka Eke Noa Steering group, by
31 December 2022. 15

(3) A pilot of a farm-level accounting and reporting system has been completed by
1 January 2024 across a range of farm types.

(4) A system for farm-level accounting and reporting of 2024 agricultural green-
house gas emissions at farm level is in use by all farms by 1 January 2025.

Farm plans 20
(5) Guidance is provided to farmers on how to measure and manage greenhouse

gas emissions through farm planning by 1 January 2021.
(6) A quarter of farms have a written plan in place to measure and manage their

greenhouse gas emissions by 1 January 2022.
(7) All farms have a written plan in place to measure and manage their greenhouse 25

gas emissions by 1 January 2025.

Schedule 2A
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Schedule 3
Consequential amendments that commence on day after Royal

assent
s 231

Part 1 5
Amendments to Acts

Climate Change Response (Emissions Trading) Amendment Act 2008 (2008
No 85)
Repeal section 51.

Income Tax Act 2007 (2007 No 97) 10
Replace section CB 36(6)(b) with:

(b) by a transfer to the Crown required by a permanent forestry scheme.
In section CB 36(8), replace “into a Kyoto unit as defined in section 4(1) of” with
“into something else under”.
After section CB 36(8), insert: 15

Cancellation of historic approved overseas unit and replacement with New
Zealand emissions unit

(8B) If a person transfers an approved overseas unit as defined in section 4(1) of the
Climate Change Response Act 2002 for cancellation under schedule 1AA,
clause 13(2) of that Act and is transferred a New Zealand emissions unit 20
under schedule 1AA, clause 13(3) of that Act, the person is treated as having
sold the approved overseas unit for an amount equal to—
(a) the unit’s value under section ED 1(7B), if that subsection applies; or
(b) the unit’s cost, otherwise.
Surrender of forest sink emissions unit for entitlement to New Zealand 25
emissions unit

(8C) If a person surrenders a forest sink emissions unit under schedule 1AA, clause
28(2) of the Climate Change Response Act 2002 and receives an entitlement to
a New Zealand emissions unit under schedule 1AA, clause 28(4) of that Act,
the person is treated as having sold the forest sink emissions unit for an amount 30
equal to—
(a) the unit’s value under section ED 1(7B), if that subsection applies; or
(b) the unit’s cost, otherwise.

In section CB 36, list of defined terms, insert in its appropriate alphabetical order
“permanent forestry scheme”. 35
Replace section DB 60(1)(b) with:

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Income Tax Act 2007 (2007 No 97)—continued
(b) under a permanent forestry scheme.

In section DB 60, list of defined terms, insert in its appropriate alphabetical order
“permanent forestry scheme”.
Replace section DB 60B(1)(b) with:

(b) to transfer emissions units to the Crown under a permanent forestry 5
scheme.

In section DB 60B, list of defined terms, insert in its appropriate alphabetical order
“permanent forestry scheme”.
Replace section EH 34(1)(b) with:

(b) includes permanent forestry income. 10
In section EH 34, list of defined terms,—
(a) delete “PFSI forestry income”:
(b) insert in its appropriate alphabetical order “permanent forestry income”.
In section GC 3B(2)(b), replace “forest sink covenant under section 67Y of the For-
ests Act 1949” with “permanent forestry scheme”. 15
In section YA 1, definition of convert, replace “section 4(1) of” with “regulations
made under section 30G of”.
In section YA 1, insert in their appropriate alphabetical order:

permanent forestry business means the forestry activities, as defined in the
Climate Change Response Act 2002, carried on in relation to land by a person 20
having entitlements and obligations relating to the land under a permanent for-
estry scheme
permanent forestry income, for a person, means the income for a permanent
forestry business—
(a) relating to a permanent forestry scheme; and 25
(b) derived by the person from—

(i) receiving an emissions unit under the permanent forestry scheme;
or

(ii) entering into a transaction in relation to an emissions unit received
under the permanent forestry scheme 30

permanent forestry scheme means—
(a) the permanent forest sink initiative under which an owner of post-1989

forest land who entered into a forest sink covenant that was registered
under section 67ZD of the Forests Act 1949 in relation to the land was
entitled under the covenant to receive emissions units, other than under 35
section 64 of the Climate Change Response Act 2002, for the land and

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Income Tax Act 2007 (2007 No 97)—continued
was liable under the covenant to surrender emissions units to the Crown
when required:

(b) the scheme under which a person who is registered under the Climate
Change Response Act 2002 as a participant in permanent forestry relat-
ing to post-1989 forest land is entitled to receive emissions units for the 5
land and is liable to surrender emissions units to the Crown when
required by that Act

In section YA 1, repeal the definitions of PFSI forestry business and PFSI forestry
income.

Summary Proceedings Act 1957 (1957 No 87) 10
In section 2(1), definition of infringement notice, after paragraph (je), insert:

(jf) section 30O of the Climate Change Response Act 2002; or
(jf) section 30Q of the Climate Change Response Act 2002; or

Part 2
Amendments to legislative instruments 15

Climate Change (Forestry Sector) Regulations 2008 (SR 2008/355)
In regulation 4(1), definition of mandatory emissions return period, replace “sec-
tion 189(9)” with “section 4(1)”.

Climate Change (Pre-1990 Forest Land Allocation Plan) Order 2010 (SR
2010/190) 20
In clause 3(1), definition of body corporate, paragraph (a), delete “(as specified in
section 72(6)(b)(ii) of the Act)”.

Climate Change (Stationary Energy and Industrial Processes) Regulations 2009
(SR 2009/285)
In regulation 9(1), delete “where the volume of coal mined exceeds 2 000 tonnes in a 25
year”.

Climate Change (Unit Register) Regulations 2008 (SR 2008/357)
In regulation 3, insert in their appropriate alphabetical order:

CDM registry means the registry established and maintained as the clean
development mechanism registry under Article 12 of the Protocol 30
certified emission reduction unit means a unit derived from a clean develop-
ment mechanism project, issued by the CDM registry, and designated as a cer-
tified emission reduction unit by the CDM registry

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Climate Change (Unit Register) Regulations 2008 (SR 2008/357)—continued
clean development mechanism project means a project undertaken under
Article 12 of the Protocol for the benefit of a Party not listed in Annex I of the
Convention
conversion account means an account in the Registry used for the purpose of
converting New Zealand units into New Zealand assigned amount units 5
convert, in relation to a New Zealand unit, means the transfer of the unit to a
conversion account in the Registry with the effect specified in regulation 11E
emission reduction unit means a unit that—
(a) is derived from a joint implementation project, meaning a project aimed

at reducing the human-induced emissions of greenhouse gases by sour- 10
ces or enhancing the human-induced removals by sink activities of a
Party listed in Annex I of the Convention that is undertaken under Art-
icle 6 of the Protocol; and

(b) is issued by converting a New Zealand assigned amount unit, an impor-
ted assigned amount unit, or a removal unit, and is designated as an 15
emission reduction unit by—
(i) the Registry; or
(ii) a registry of a Party listed in Annex B of the Protocol (other than

New Zealand)
imported assigned amount unit means an assigned amount unit that is issued 20
out of the initial assigned amount of a Party other than New Zealand
New Zealand assigned amount unit means a unit that is—
(a) issued out of New Zealand’s allowance of emissions of greenhouse gas,

measured in tonnes of carbon dioxide equivalent and calculated under
Articles 3.7 and 3.8 of the Protocol; and 25

(b) designated as an assigned amount unit by the Registry
Party means a Party to the Protocol
removal unit means a unit that is—
(a) derived from a Party’s sink activities that result in a net removal of

greenhouse gases; and 30
(b) designated as a removal unit by—

(i) the Registry; or
(ii) a registry of a Party listed in Annex B of the Protocol (other than

New Zealand)
After regulation 3, insert: 35

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Climate Change (Unit Register) Regulations 2008 (SR 2008/357)—continued
Approved overseas units, overseas registries, and international transaction

body

3A Approved overseas units prescribed
Each of the following units that is issued as defined by section 4 of the Act
may be transferred to accounts in the Registry (and is therefore an approved 5
overseas unit under section 4 of the Act):
(a) a New Zealand assigned amount unit:
(b) an imported assigned amount unit:
(c) a certified emission reduction unit:
(d) an emission reduction unit: 10
(e) a removal unit.

3B Overseas registry prescribed
The overseas registry, for the purposes of section 4 of the Act, is the CDM
registry.

3C International transaction body prescribed 15
The international transaction body, for the purposes of section 4 of the Act, is
the international log established and maintained by the Secretariat to confirm
the validity of transactions, including the issue of units and the transfer of units
between registries and between accounts in the Registry.

Before regulation 8, insert: 20

8AA Prohibition on ability to export New Zealand units
(1) An account holder may not apply to the Registrar to convert a New Zealand

unit held by that person into a unit for the purposes of transferring that unit to
an account in an overseas registry or international transaction body.

(2) The Registrar must not transfer to an account in an overseas registry or inter- 25
national transaction body under section 18C of the Act—
(i) New Zealand units; or
(ii) units that have been converted from New Zealand units before the com-

mencement of this regulation.
Replace regulation 11 with: 30

11 Effect of retirement
A unit that is transferred to a retirement account may not be further transferred,
retired, surrendered, or cancelled.

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Climate Change (Unit Register) Regulations 2008 (SR 2008/357)—continued
11AA New Zealand units may not be retired

New Zealand units may not be retired.

11AB Retirement of approved overseas units
(1) This regulation applies if the Registrar receives an application to transfer

approved overseas units held in an account holder’s holding account to a retire- 5
ment account.

(2) The Registrar must—
(a) seek a direction from the Minister of Finance as to whether the units

may be transferred to the retirement account; and
(b) transfer the units only if directed to do so. 10

11AC Imported assigned amount units not to be surrendered
No participant may surrender, or permit to be surrendered, an imported
assigned amount unit to meet the participant’s obligations under section 63 of
the Act.

After regulation 11C, insert: 15

Conversion of New Zealand units into certain units

11D Conversion of New Zealand units into New Zealand assigned amount units
for cancellation

(1) An account holder may apply to the Registrar to convert a New Zealand unit
held by that person into a New Zealand assigned amount unit held for the pur- 20
poses of transferring that assigned amount unit to the general cancellation
account.

(2) The account holder must—
(a) submit the prescribed form to the Registrar specifying the New Zealand

units that the account holder wishes to convert; and 25
(b) submit an application under section 18C of the Act for the transfer of an

equivalent number of New Zealand assigned amount units (into which
the account holder is converting the New Zealand units) to the general
cancellation account.

(3) On receipt of the application, the Registrar must, as soon as practicable,— 30
(a) transfer the New Zealand units specified in the application from the

account holder’s account to the conversion account; and
(b) transfer to the account holder’s account an equivalent number of New

Zealand assigned amount units; and
(c) subject to section 21AA(3) of the Act, register the transaction applied for 35

under subclause (2)(b).

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Climate Change (Unit Register) Regulations 2008 (SR 2008/357)—continued
(4) The Registrar’s obligations under subclause (3) apply only if, and to the extent

that, there are sufficient New Zealand assigned amount units to meet a request
under subclause (2) to convert New Zealand units.

(5) If the Registrar receives notification from an overseas registry or international
transaction body under section 21AA(3) of the Act that there is a discrepancy 5
in the transaction relating to the application submitted under subclause (2)(b),
the Registrar must—
(a) comply with section 21AA(3) of the Act; and
(b) reverse the transfers in subclause (3)(a) and (b).

Effect of conversion or surrender of certain units 10

11E Effect of conversion of unit
A unit that is transferred to a conversion account may not be surrendered, can-
celled, or otherwise further transferred except as required by regulation
11D(5)(b).

11F Effect of surrendering imported assigned amount units despite prohibition 15
(1) This regulation applies if at any time the Registrar discovers that an imported

assigned amount unit has been transferred to a surrender account.
(2) The Registrar must—

(a) reverse the transfer; and
(b) notify the participant and the EPA that the transfer has been reversed. 20

(3) If the transfer is reversed,—
(a) the EPA must treat the transfer as if it never took place for the purpose of

assessing whether a participant has surrendered the required number of
units by the due date as required under any section of the Act; and

(b) if the EPA considers that the person has not surrendered the required 25
number of units by the due date, give a notice to the participant under
section 134(3) of the Act.

Forests (Permanent Forest Sink) Regulations 2007 (SR 2007/354)
In regulation 3, replace the definition of assigned amount unit with:

assigned amount unit has the meaning given to New Zealand assigned 30
amount unit in regulation 3 of the Climate Change (Unit Register) Regulations

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Schedule 4
Consequential amendments that commence on 30 November 2020

s 232

Part 1
Amendments to Act 5

Income Tax Act 2007 (2007 No 97)
Replace section EB 2(3)(j) with:

(j) a greenhouse gas unit that is not an emissions unit.
In section EB 2, list of defined terms,—
(a) delete “non-Kyoto greenhouse gas unit”: 10
(b) insert in its appropriate alphabetical order “greenhouse gas unit”.
Replace section EW 5(3C) and the heading above that subsection with:

Greenhouse gas unit
(3C) A greenhouse gas unit that is not an emissions unit is an excepted financial

arrangement. 15
In section EW 5, list of defined terms,—
(a) delete “non-Kyoto greenhouse gas unit”:
(b) insert in its appropriate alphabetical order “greenhouse gas unit”.
In section YA 1, insert in its appropriate alphabetical order:

greenhouse gas unit means a unit that is— 20
(a) issued by reference to the sequestration, reduction, or avoidance of emis-

sion, of human-induced greenhouse gases; and
(b) verified to an internationally recognised standard

In section YA 1, repeal the definition of non-Kyoto greenhouse gas unit.
In section YA 1, definition of revenue account property, replace paragraph (d) with: 25

(d) is a greenhouse gas unit that is not an emissions unit

Part 2
Amendments to legislative instrument

Climate Change (Unit Register) Regulations 2008 (SR 2008/357)
Replace regulations 8 to 10 with: 30

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Climate Change (Unit Register) Regulations 2008 (SR 2008/357)—continued
8 Approved overseas units cannot be held or transferred except by the

Crown
(1) No account holder, other than an account holder of a Crown holding account,

may hold any approved overseas unit.
(2) No person, other than the Registrar as administrator of a Crown holding 5

account, may transfer any approved overseas unit into or within the unit regis-
ter.

(3) See clause 14 clause 13 of Schedule 1AA of the Act (cancellation of his-
toric approved overseas units).

Revoke regulations 11AB and 11AC, 11B, and 11C and the Schedule. 10

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Schedule 5
Consequential amendments that commence on 1 January 2021 2022

s 233

Forests Act 1949 (1949 No 19)
After section 67C(1)(g)(iii), insert: 5

(iv) harvested from a forest on land in respect of which a person is
registered as a participant in permanent forestry under the Climate
Change Response Act 2002.

After section 67D(1)(b)(i)(D), insert:
(E) a forest on land in respect of which a person is registered as 10

a participant in permanent forestry under the Climate
Change Response Act 2002; or

Schedule 5
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Schedule 6
Consequential amendments that commence on 1 January 2022 2023

s 234

Forests Act 1949 (1949 No 19)
In section 2(1), replace the definition of landholding with: 5

landholding—
(a) means an estate, right, title, or interest of any kind in or over an area of

land by or under which indigenous timber may be harvested; but
(b) does not include an interest by way of charge or security

After section 2, insert: 10

2A Transitional, savings, and related provisions
The transitional, savings, and related provisions set out in Schedule 1AA have
effect according to their terms.

Repeal section 67C(1)(g)(iii).
Repeal section 67D(1)(b)(i)(D). 15
Repeal Part 3B.
Before Schedule 1, insert the Schedule 1AA set out in Schedule 7 of this Act.

Forests (Permanent Forest Sink) Regulations 2007 (SR 2007/354)
Revoke.

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Schedule 7
New Schedule 1AA inserted in Forests Act 1949

Schedule 6

Schedule 1AA
Transitional, savings, and related provisions 5

s 2A

Part 1
Provisions relating to Climate Change Response (Emissions Trading

Reform) Amendment Act 2019

1 Removal of forest sink covenants from register and records 10
(1) The EPA (as defined by section 4 of the Climate Change Response Act 2002)

must, as soon as is reasonably practicable after the commencement of this
clause, give notice that the clause has commenced to—
(a) the Registrar-General of Land; and
(b) the Registrar of the Maori Land Court. 15

(2) As soon as is reasonably practicable after receiving the notice,—
(a) the Registrar-General of Land must record, on each record of title on

which a forest sink covenant is registered, that the covenant is termin-
ated; and

(b) the Registrar of the Maori Land Court must remove any notification of a 20
forest sink covenant from the court’s records of Maori land.

2 Crown charges continue against land subject to forest sink covenants
For the purposes of any charge registered against land in accordance with sec-
tion 67ZE immediately before the commencement of this clause, the charge
and that section continue to apply as if the section had not been repealed. 25

Legislative history
24 October 2019 Introduction (Bill 186–1)
5 November 2019 First reading and referral to Environment Committee

Wellington, New Zealand:

Published under the authority of the House of Representatives—2020

Schedule 7
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Amendment Bill

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Picture Name From Date Type
James Shaw - 11/06/2019 Sponsor
James Shaw G- 11/06/2019 Sponsor
Date Branch Action
05/04/2020 House of Representatives Select Committee
11/05/2019 House of Representatives First Reading
10/24/2019 House of Representatives Bill Introduced
Summary
Congress - Bill Number Major Title
Branch Vote Date Yes No Not Voting
Wiki



Start Description.
This bill amends the Climate Change Response Act 2002 to improve certainty for businesses, make the New Zealand Emissions Trading Scheme more accessible, and improve its administration.
End Description.

Bill TEXT Points.
This Bill has been listed with the following Subjects from Texts:
Acts
Part 2 makes consequential amendments to other Acts and regulations

Age
The United Nations and its specialized agencies and the International Atomic Energy Agency, as well as any State member thereof or observers thereto not party to the Convention, may be represented at sessions of the Conference of the Parties serving as the meeting of the Parties to this Agreement as observers

Agriculture
It will require the Minister for Climate Change and Minister of Agriculture to report back on the development of an alternative farm-level pricing mechanism in 2022

Auctions
Auctions are expected to begin in late 2020


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