Synthetic Greenhouse Gas Levy consultation now underway

The Ministry for the Environment is consulting on whether the Synthetic Greenhouse Gas Levy should be extended to importers of a specialist product used to make polyurethane insulation foam.

Insulation foam is used in refrigeration and other applications. The product, polyol, contains hydrofluorocarbons (HFCs) which are serious greenhouse gases.

Currently, bulk importers of HFCs have to pay for the global warming impact of the HFCs through the levy which is imposed at the border, but businesses that import already-formulated polyol, which contains HFCs, do not. This potentially disadvantages local manufacturers.

The consultation will determine who is likely to be affected and how. It will also help the Ministry work out at what rate the levy should be applied.

The consultation document is available on the Ministry for the Environment website and submissions can be made online.

Consultation closes at 5pm on Friday 20 January.

Background information

The Synthetic Greenhouse Gas Levy sits alongside the New Zealand Emissions Trading Scheme (NZ ETS) as a mechanism to put a price on emissions. It encourages manufacturers who are not covered by the NZ ETS to look for climate-friendly alternatives where it is economic to do so.

Ministry officials have been working with industry on the wider issue of phasing down the use of HFCs as agreed under the Montreal Protocol, as they have a global warming effect up to 15,000 times greater than carbon dioxide. In New Zealand, this would only apply to bulk imports of HFCs, not use of HFCs nor products containing HFCs.

The consultation and levy policy is the responsibility of the Ministry for the Environment, but the levy is administered by the New Zealand Customs Service as it is imposed at the border.

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