The New Zealand government has taken decisive action to curb carbon emissions by significantly reducing the number of carbon credits available for auction. Climate Change Minister Simon Watts announced that the government would cut the number of credits released from 2024 to 2029 from 49 million to 21 million units, aligning with the Climate Change Commission's recommendations.
Majestic landscape of Fiordland National Park, New Zealand. AI generated picture.
This reduction is expected to lower the maximum amount of carbon dioxide businesses and consumers can emit by 28 million tonnes during that period. The move also aims to bolster the Emissions Trading Scheme (ETS) by preventing an oversupply of credits, which has previously weakened the market.
Read more: Nigeria’s national action plan to protect elephants and biodiversity
ANZ economist Susan Kilsby emphasised the significance of this decision, noting that while slightly more units will be available in 2025 and 2026 than recommended, the overall reduction in later years is substantial. Meanwhile, Salt Asset Management's Paul Harrison observed that carbon credit prices have already risen by $5, reaching $60 on the secondary market following the announcement.
The decision is expected to drive up carbon prices further, incentivizing investments in emissions-reduction technologies. However, the impact on everyday costs like petrol and power is anticipated to be minimal, according to government modelling.
Read more: Dutch companies leading the charge in carbon footprint compensation
With this move, the government reaffirms its commitment to meeting New Zealand’s environmental targets, signalling a more balanced and credible approach to reducing emissions through the ETS.
As businesses increasingly focus on sustainability, the voluntary carbon credit market plays a crucial role in global nature restoration efforts. By supporting DGB Group’s reforestation and afforestation projects, you contribute to a future where communities thrive alongside revitalised ecosystems. Our projects are built for long-term sustainability, producing high-quality carbon units and meeting the highest environmental standards. With the growing demand for premium carbon units, partnering with DGB offers a promising opportunity to drive positive change and benefit from the expanding market.
Benefit from the carbon market today with DGB
