New Zealand's carbon market

The carbon trade you've probably never heard of

The New Zealand emissions trading scheme was launched in 2008 as part of the Kyoto Protocol. In a similar vein to the EU’s emissions trading scheme, it has seen some significant changes over that time.

In 2015 the New Zealand scheme transitioned to a domestic only market. However, it has only been since 2020 that the scheme has moved towards something that investors in Europe or California would recognise.

Every emissions trading scheme as a different name for their carbon allowances. Here, allowances are known as New Zealand Units (NZUs), and equate to 1 tonne of carbon dioxide equivalent. NZUs have specific vintages that relate to emissions in a particular year.

As in other carbon markets, the price of allowances in New Zealand have rocketed. Since the start of 2020, the price of NZUs has increased 3-fold to NZ$75, equivalent to almost €50.