Following up from my last post, I wondered what was the market value of the 6.7 million emission units given to eligible emitters under the New Zealand Emissions Trading Scheme 2018 industrial allocation?
We will need market prices for emissions units. There is an online 'open data' Github repository of New Zealand Unit (NZU) prices going back to May 2010.
The NZU repository has it's own citation and DOI:
Theecanmole. (2016). New Zealand emission unit (NZU) monthly prices 2010 to 2016: V1.0.01 [Data set]. Zenodo. http://doi.org/10.5281/zenodo.221328
Under the Section 86 of the Climate Change Response Act 2002, eligible emitters or 'participants' in the ETS, as they are defined, may apply to the Environmental Protection Authority for a 'provisional' or estimated quantity of units for a future compliance year and for a 'final' or actual quantity of units for a past year.
We recall that one of National's 2009 amendments to the NZETS was to make unit allocation proportional to actual production. So that requires an provisional estimate and an actual 'wash-up' calculation once actual production from the regulated 'activity' is known.
The emitters must apply for both provisional and final allocations between 1 January and 30 April of each year. I am assuming that the EPA checks the applications and then transfers the initial allocation to accounts in the NZ Emissions Trading Register in May of each year.
The provisional allocation does not have to be gazetted or published. The final allocation must be gazetted or publicised on the EPA's website under Section 86B(5). But it can't be known until the EPA has received and processed all the historic wash-up applications for the just finished calendar year. That's why in September 2019 the EPA have only the 2018 unit allocations on their website. And not the 2018 final allocations.
It may be the accountant within me, but I think the emitters will want to get their initial application as close to 100% correct as possible. Or to exceed it. Because free units now will always be better than free units in 12 months time.
So let's assume the initial industrial allocation is transferred to emitters' accounts in May. At that point we can make a calculation of market value. We can check our NZU price data for a mid-May price as it's expressed in average monthly prices.
On our graph of of NZU prices, we add a vertical line for the 15th of May and then where that line intersects with the price line we add a horizontal line across to the prices on the Y axis. Or we could have looked up the .csv file of the prices. We get $NZ 21.38 per unit.
Multiplying the 6,743,573 units by $21.38 equals 143,503,233 NZ dollars!
I am gob-smacked by that! $143.5 million! Just gifted to emitters! Deliberately to reduce the effect of the carbon price on these privileged emitters. And as Idiot/Savant noted, the allocations will slowly and incrementally 'phase out' by the minutest of percentages until 2015!
Of the big three, New Zealand Steel received units worth $NZ 37.9 million, New Zealand Aluminium Smelters received units worth $NZ 28 million and Methanex received units worth $NZ 20 million. Here's the pie chart denominated in dollars.
Here is a bar chart which are usually easier to read.
Here is the tidied data of the name of the emitter, the amount of final units and the value at the mid May price of $NZ21.38. The data file is also at Google Drive sheets.
|New Zealand Steel Development Limited||1782366||37928748.48|
|New Zealand Aluminium Smelters Limited||1324556||28186551.68|
|Methanex New Zealand Ltd||945210||20114068.8|
|Fletcher Concrete and Infrastructure Limited||584032||12428200.96|
|Oji Fibre Solutions (NZ) Limited||484322||10306372.16|
|Ballance Agri-Nutrients (Kapuni) Limited||325594||6928640.32|
|Pan Pac Forest Products Limited||210652||4482674.56|
|Norske Skog Tasman Ltd||200556||4267831.68|
|Winstone Pulp International Limited||151546||3224898.88|
|Graymont (NZ) Limited||144405||3072938.4|
|Whakatane Mill Limited||139690||2972603.2|
|ACI OPERATIONS NZ LIMITED||59945||1275629.6|
|Asaleo Care New Zealand Limited||29419||626036.32|
|Nelson Pine Industries Limited||26569||565388.32|
|Wallace Group Limited Partnership||26539||564749.92|
|Pacific Steel (NZ) Limited||19550||416024|
|EVONIK PEROXIDE LIMITED||18443||392467.04|
|Daiken New Zealand Limited||17770||378145.6|
|Dongwha New Zealand Limited||16854||358653.12|
|Status Produce Limited||15496||329754.88|
|Taranaki By-Products Ltd||14197||302112.16|
|Tuakau Proteins Ltd||11393||242443.04|
|Anchor Ethanol Limited||10784||229483.52|
|Southern Paprika Limited||10406||221439.68|
|Alliance Group Limited||10012||213055.36|
|Affco New Zealand Limited||9465||201415.2|
|Under Glass (Karaka) Limited||7574||161174.72|
|Gourmet Mokai Limited||7006||149087.68|
|Under Glass (Bombay) Ltd||6194||131808.32|
|Websters Hydrated Lime Company Limited||5999||127658.72|
|Hawkes Bay Protein Limited||5740||122147.2|
|CMP Canterbury Limited||5470||116401.6|
|Juken New Zealand Ltd||5304||112869.12|
|Gourmet Paprika Limited||4837||102931.36|
|PVL Proteins Limited||3632||77288.96|
|Fletcher Building Products Limited||3344||71160.32|
|Sharma Produce Limited||2677||56966.56|
|Gourmet Waiuku Limited||2190||46603.2|
|Kakariki Proteins Limited||2037||43347.36|
|Shipherd Nurseries Limited||1900||40432|
|Island Horticulture Limited||1717||36537.76|
|Tegel Foods Limited||1632||34728.96|
|Value Proteins Ltd||1581||33643.68|
|Whakatane Growers Limited||1393||29643.04|
|P H Kinzett Ltd||1344||28600.32|
|Moffatts Flower Company Limited||1182||25152.96|
|Karaka Park Produce Limited||1169||24876.32|
|Van Lier Nurseries Ltd||1123||23897.44|
|Taylor Preston Limited||1104||23493.12|
|Meenakshi Devi Sharma, Raj Kumar Sharma||1080||22982.4|
|Vege Fresh Growers Limited||1075||22876|
|Jai Shankar Growers Limited||928||19747.84|
|Prime Range Meats Limited||928||19747.84|
|Homestead Produce Ltd||881||18747.68|
|Sinai Hort Limited||604||12853.12|
|J.S. Mahey Limited||599||12746.72|
|Castle Rock Orchard Ltd||564||12001.92|
|Karamea Tomatoes Limited||526||11193.28|
|Poppas Peppers 2009 Limited||351||7469.28|
|Taaza Green Limited||337||7171.36|
|Harbour Head Growers Ltd||261||5554.08|
|Ting-Yuan Robert Wu||239||5085.92|
|Parkgard Growers 2000 Limited||222||4724.16|
|Antone James Ivicevich, Joanne Elizabeth Gould Ivicevich||210||4468.8|
|Graeme Lowe Protein Limited||198||4213.44|
|Mary Jane Fausett, Peter James Fausett||143||3043.04|
|Pomoana Gardens Limited||100||2128|
|John Hamilton Charles Falloon, Paul Gregory Whitehead||79||1681.12|
|Royal Roses Limited||66||1404.48|
|Eseta Kovati, Reupena Kovati||37||787.36|
|GELITA NZ Ltd||29||617.12|
|Wallace Corporation Limited||0||0|