Strong uptake at first NZ Emissions Trading Scheme auction following launch by NZX and EEX

The first auction within the NZ ETS cleared at a price of 36 Dollar. The full volume of 4,750,000 New Zealand allowances (NZUs) was auctioned with 30 bidders being successful and a total of 40 bidders taking part in the auction. The cover ratio was 2.45. The auction results are available at: https://www.etsauctions.govt.nz/public/auction_noticeboard/12

New Zealand’s Minister for Climate Change, Hon. James Shaw, formally opened the first bidding window at 9.00am (NZT) by ringing the bell at the NZX Centre in Wellington – ushering in auctions under the NZ ETS, one of the New Zealand Government’s main tools for meeting domestic and international climate policy targets.

NZX Chief Executive, Mark Peterson, says a particular success of the first auction was the level of interest and direct participation from major industries such as manufacturing and transport, along with the forestry sector and private interests.

“We have seen interest building in the lead-up to this first auction, and this is a tremendous vote of confidence in what we have delivered with EEX – establishing a fair, transparent, easy-to-access and efficient allocation mechanism for NZU (emissions units) on behalf of the New Zealand Government.”

“We’re really proud to be part of this important milestone and what it means in terms of New Zealand and the global transition to a low-emissions future,” Mr Peterson says.

Peter Reitz, CEO of EEX, adds: “EEX is proud to have contributed to the development of the auction platform for the NZ ETS, drawing on our experience from the European and North American carbon markets.

“It has been a great team effort and an excellent co-operation with NZX. The NZ ETS is first and foremost a domestic policy instrument. However, I hope our collaboration can also serve as an example and inspiration for the future development and integration of carbon markets.”

NZX and EEX announced their cooperation in December 2019, with an initial focus on securing new opportunities in the New Zealand emissions market. In October 2020, NZX and EEX were selected by the Ministry for the Environment to develop and operate the managed auction service for the New Zealand’s Emissions Trading Scheme (NZ ETS), following a successful tender. Mr Peterson, said he sees new opportunities opening up as the New Zealand market matures and NZX and EEX will be jointly exploring further areas for co-operation.

The NZ ETS auctions will take place in a quarterly cycle in 2021 within a 3-hour time window from 9.00am (NZDT) until 12.00 pm. During this year, a total of 19 million NZU will be auctioned under the New Zealand Emissions Trading Scheme.

About NZX:
For more than 150 years we have been creating opportunities for Kiwis to grow their personal wealth and helping businesses prosper. As New Zealand’s Exchange, we are proud of our record in supporting the growth and global ambitions of local companies. NZX operates New Zealand’s equity, debt, funds, derivatives and energy markets. To support the growth of our markets, we provide trading, clearing, settlement, depository and data services for our customers. We also own Smartshares, New Zealand’s only issuer of listed Exchange Traded Funds (ETFs), and KiwiSaver provider SuperLife. Our NZX Wealth Technologies subsidiary is an online asset management platform. Learn more about NZX at: www.nzx.com

About the NZ Emissions Trading Scheme
New Zealand has one of the longest established Emissions Trading Schemes in the world. The scheme aims to encourage people to reduce greenhouse gas emissions over time, to help New Zealand meet its climate change targets. Recent reforms, passed by Parliament earlier this year, are intended to improve certainty for businesses, make the scheme more accessible and improve its administration. For more information see: https://www.mfe.govt.nz/climate-change/new-zealandemissionstrading-scheme/reforming-nz-ets.