The Government announced changes to climate policy this week. Here’s what they were

Saturday, 8 November 2025

In a statement released late on Tuesday evening, the Government quietly announced some key changes to the climate change policy framework.

There was no announcement, no social media post, no fanfare.

The statement - released by Climate Change Minister Simon Watts - started by introducing a new Assessment Framework for Carbon Removals.

It then went on to outline several amendments to the Climate Change Response Act.

These legislative changes have not yet been drafted, so we can’t be certain of all the details. But here’s what we do know - broken down and simplified.

Would you like to see something explained or fact checked? Email me at emma.ricketts@stuff.co.nz.

A new framework for carbon removals

When we talk about New Zealand’s (and other countries’) climate targets, we tend to refer to “net” emissions.

Take New Zealand’s 2050 target, for example: we are aiming to achieve “net zero emissions of all greenhouse gas emissions other than biogenic methane”.

That “net” is important. We aren’t aiming to achieve zero emissions by 2050, we are aiming to be removing as much as we are emitting by 2050.

According to the Climate Change Commission’s latest monitoring report, we are not on track to achieve this.

Progress towards these net goals is double-sided. Gross emissions need to reduce enough that net zero is feasible, and we need to up our carbon removals.

At the moment, carbon sequestration is only counted if it comes from forests registered with the Emissions Trading Scheme (ETS).

Bear with me here.

Participants in the ETS (these are mostly businesses operating in high-emissions areas, like electricity generation and industrial manufacturing) have to surrender one “emissions unit” for every tonne of emissions they are responsible for.

They have to buy these units - either from other participants who have more than they need or at quarterly government auctions. (They can also be allocated units by the Government, but we won’t get into that now).

Owners of forested land can apply to participate. They are given emissions units from the Government that correlate to the size and density of their forest, which they can then sell on the carbon market. But - at the moment - that is the only way that carbon removals are counted.

Now, what is changing.

The government started its Tuesday announcement with a new assessment framework for carbon removals. This is basically a framework to assess whether other activities that remove greenhouse gases from the atmosphere - like wetlands, or carbon capture and storage technologies - should be included in the ETS as well.

This move was expected - the Government has signalled an intention to expand carbon removals in the ETS for a while. But there was more to Tuesday’s statement, and fewer people saw the other changes coming.

ETS no longer required to align with international emissions goals

As mentioned above, the emissions units in the ETS can only be purchased from other market participants or the Government.

The Government’s auctions - which take place quarterly - are essential for controlling how many units are on the market. Basically, the Government can adjust the number of units on offer (known as the “cap”) in order to keep the total amount of emissions allowed within the scheme where they want it.

Over time, they reduce the number of units available to drive down emissions.

Currently, the settings are reviewed every year to ensure the next five years will be in line with our domestic emissions targets and our nationally determined contribution. That’s a commitment made under the Paris Agreement, which is lodged with the international community and updated every five years.

Under the proposed changes, the ETS settings will no longer need to comply with the nationally determined contribution.

This is because the ETS, as a domestic instrument, was not well-placed to account for the international component of nationally determined contributions, a Ministry for the Environment policy document read.

Reducing the role of the Climate Change Commission

We mentioned New Zealand’s 2050 emissions target above. 2050 is a long time away, so in order to achieve it, the Government has a series of steps to follow - set out in the Climate Change Response Act.

First, emissions budgets. Just like your financial budget captures how much you can spend in a specific period of time, these five-year budgets set by the Government state the total quantity of emissions that can be released within that time frame.

Like with ETS units, the idea is to reduce these over time.

The budgets are set a number of years in advance. The Climate Change Commission is tasked with reviewing them every five years and recommending the maximum level for the next one. In November 2024, it provided advice on the 2036-2040 budget.

The Commission will still do this under the changes announced on Tuesday. But it will no longer be required to consult with the public on the changes - something experts have described as “worrying” and “not acceptable”.

The next step on the 2050 target journey is emissions reduction plans.

These are five-yearly documents - covering each emissions budget period - that lay out the policies the Government plans to rely on to meet the budget. They are also based on advice from the Climate Change Commission.

Our second emissions reduction plan, covering the period from 2026-2030, is set to come into effect at the end of this year. It is long - spanning 97 pages - and includes sector specific policies as precise as “aiming for a network of 10,000 public EV charging points by 2030”.

Under the changes, the Climate Change Commission will no longer advise the government on emissions reduction plans to avoid any duplication with advice on the emissions budgets, and to avoid business uncertainty.

The Government will also remove some of the requirements around what needs to go in the plan - like sector-specific policies - to give ministers more latitude and simplify the documents.