Industrial allocation exempts from pricing twice as many tonnes of emissions than the actual total for the Industry sector

I reach back in time to 2009 when the Hon Dr Nick Smith was the Minister for Climate Changes Issues and his introduction to the emissions trading scheme of the supermarket special the "two for one" deal.

I left the previous post on Industrial Allocation noting that in the 11 years from 2010 to 2020 there were 162 entities that were given, at no cost, 55 million emission units as they are deemed to be "emissions-intensive and trade-exposed".

In the same period the total actual emissions recorded in the Greenhouse Gas Inventory for all industries was 53 million tonnes of carbon dioxide equivalent.

My data analysis is at this Git hub page Industrial Allocation.

Here is a barplot of the allocation (gifting, giving for free, donating) of the 55 million emission units to selected emitter industries.

Here is a barplot of the 53 million tonnes of actual emissions from the New Zealand industrial sector from the Greenhouse Gas Inventory.

Here is a line chart of the 53 million tonnes of actual emissions and the Industrial Allocation - the free allocation of the 55 million emission units.

So at first glance it appears that the amount of free emission units allocated cancel out the actual industry emissions. This suggests that in a net sense the industry sector emissions are not priced at all under the emissions trading scheme They are more than 'offset' by the allocation of free units. So it's the same net result as if the industry sector was completely exempted from the emissions trading scheme requirements to surrender emission units equal to their emissions.

However I am missing a step in my analysis. In my detailed examples for New Zealand Steel and New Zealand Aluminium Smelters, I estimated the actual liability to surrender units by multiplying the Greenhouse Gas Inventory steel and aluminium emissions by a variable representing the "two for one" discount introduced in 2009 by the Hon Dr Nick Smith when he was the Minister for Climate Changes Issues.

On 1 September 2009 with Dr Smith's approval "Emissions trading bulletin No 11: Summary of the proposed changes to the NZ ETS" was published. It stated that the emissions trading scheme would be amended by adding a transition phase lasting to 31 December 2012 which would feature a "progressive obligation".

A transition phase will operate until December 2012. The transition phase will be implemented through....a progressive obligation requiring SEIP and LFF participants to surrender only one unit for every two tonnes of CO2-e emitted

The 'progressive obligation' was effectively a 50% discount on the 'surrender obligation', the quantity of emissions units that emitters had to surrender. Each firms industrial allocation of emission units would in consequence also be halved as well.

Then in 2012, Minister for Climate Change Issues Tim Groser introduced the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill. This bill extended the life of the "two for one" 'progressive obligation' indefinitely.

Finally, in 2016, Minister for Climate Change Issues Paula Bennett introduced a bill to "phase out" the 'progressive obligation' over three years from 2017 to 2019 by increments from the original "two for one" - 2 units per tonne to 1.5 to 1.2 to 1 unit per tonne of emissions. See the "EPA document ETS Surrender Obligations One for two phase out factsheet"

So I need to include a discount variable that is applied to the free emission units allocated to result in the "emissions footprint" of the allocation of units. The discount variable is 0.25 for 2010 (half obligation for half a year),then 0.5 from 2011 to 2016, 0.67 in 2017 ,0.83 in 2018 and finally one for one for 2019 and 2020.

This allows me to estimate of the carbon footprint or emissions footprint of all the units given under Industrial Allocation. As in this chart.

I can then add the 'emissions footprint' values or the emissions allowed by the free Industrial Allocation units to the chart of allocated emission units and actual industry emissions.

The chart shows a huge gap between the emissions footprint and the allocated units until 2017 when the two lines start to converge.

Then in 2019, the emissions foot print is the same as the units allocated as finally, under the emissions trading scheme, one emission unit does in fact equate to one tonne of emissions.

The total of the Industrial Allocation 'emissions footprint' over 2010 to 2020 is 89 million tonnes. Meaning that those 89 million tonnes have been "de-priced" by the emissions trading scheme.

Just a reminder. What is an emission unit? It's a right to emit greenhouse gases to the atmosphere.

Owning an emission unit is the same as permission to emit a quantity of greenhouse gases whether from smelting or just from burning coal oil or gas.

Being allocated a unit is the same as being told "go for it - you can just burn coal or oil or gas without penalty until a tonne of carbon dioxide is in the atmosphere".

It's the opposite of a price on carbon. It's a permit or licence to burn carbon.

The emissions footprint of Industrial Allocation, from 2010 to 2020, at 89 million tonnes, is twice as much as the actual emissions of the whole industry sector for the same period.

How can that possibly be the case? It is because of the energy allocation factor.

Industrial Allocation "de-prices" and removes the emissions price signal from some energy sector emissions in addition to the direct industry process emissions.

In a net sense Industrial Allocation is worse as a policy to reduce industry emissions than a complete exemption of industry from the emissions trading scheme. In a scenario of 100% exemption, at least all energy sector carbon emissions would in theory be priced.

Hence my headline conclusion Industrial allocation exempts from pricing twice as many tonnes of emissions than the actual total emissions for the industry sector.

Emissions trading scheme subsidy New Zealand Aluminium Smelters Limited were given 12 million emissions units worth $220 million since 2010

The overly generous treatment of New Zealand Aluminium Smelters Limited under the New Zealand emissions trading scheme has been in the news lately. The subsidy of free emission units has been reduced by the Government. Some data exploration shows that New Zealand Aluminium Smelters Limited were given 12 million emissions units worth $220 million since 2010. Here is the data and some charts.

I have just been doing some charts of the latest data of 'industrial allocation' of free emission units to New Zealand Aluminium Smelters Limited.

I have previously posted a few times about the generous over allocation of emissions units to New Zealand Aluminium Smelters Limited. There is a good summary in this post.

Back on Thursday 24 March 2022, New Zealand Aluminium Smelters Limited and their emission unit allocations were again in the news.

Amazingly, the degree of the over-allocation of emissions units has just been reduced by Minister for Climate Change James Shaw and the Ministry for the Environment who have released a Cabinet paper on the issue.

The Nick Smith National Government narrative in 2011 for the free allocation is that New Zealand Aluminium Smelters Limited are "emissions intensive trade exposed" and they therefore qualify for a 90% "level of assistance". As indicated on the EPA webpage on Eligibility for industrial allocations.

Which implies that the company still pays a 10% obligation when surrendering units under the emissions trading scheme.

But that doesn't happen as the allocation of units also includes compensation for fictitious emissions trading scheme electricity pass-through costs.

Which means that the free allocation of units has always exceeded the amount of units liable to be surrendered under the emissions trading scheme.

That means that NZ Aluminium Smelters has always been a net seller of emissions units. My initial calculations were that the over allocation ranges from 120% to 146%.

The key point of the latest media attention is that James Shaw got a paper through Cabinet which set the "ETS carbon cost", of the recently renegotiated electricity supply contract with (100% renewable hydro powered) Meridian Energy and the company, at zero. That reduced the annual free allocation to the smelter company by 934,400 emissions units (see paragraph 38 of the Cabinet paper). At a 24 March carbon price of 73.10 that's a market value of $68,304,640. Yes, $68 million dollars!

That makes the decision probably the most effective single decision ever taken to reform the woeful emissions trading scheme into a real emissions-reducing policy.

Idiot/Savant posts at No Right Turn on 25 March 2022 that: "Under the ETS's industrial allocation provisions, it [NZ Aluminium Smelters Limited] receives far more carbon credits than it actually emits, which it can then sell to other polluters for profit."

Henry Cooke at the Dominion Post 25 March 2022 says; "The Government has removed a complex, subsidy worth about $60m, from New Zealand Aluminium, which runs the Tiwai Point Smelter in Southland"

Marc Daalder of Newsroom reported on 26 March that "...the smelter receive around 600,000 New Zealand Units (NZUs) - carbon credits used in the Emissions Trading Scheme (ETS) - each year for the next four years, down from around 1.5 million that it would have otherwise been granted".

My analysis is on its own github repository along with the data, the 'R language' script and a couple of charts.

Here is the chart showing that New Zealand Aluminium Smelters Limited received 11,946,759 emissions units from 2010 to 2021. Lets call that 12 million emission units.

My understanding is that New Zealand Aluminium Smelters Limited will have an application for a 'provisional' allocation of units approved after April each year by the EPA. The EPA timeframe/deadline for these applications is 1 January to 30 April of each year.

I have therefore assumed that the transfer of emissions units on the New Zealand Emissions Trading Register happens in May of each year. So I valued the annual allocations with a mean mid May NZU price from Theecanmole. (2016). New Zealand emission unit (NZU) monthly prices 2010 to 2016: V1.0.01 [Data set]. Zenodo.

Obviously the NZU price has varied enormously from less than $3 in 2013 to $86 in mid February 2022. The sum of all the annual values is $220,533,810. Lets call that $220 million.

Here is the chart of the annual values of emissions units gifted to New Zealand Aluminium Smelters Limited.

Six ways the New Zealand emissions trading scheme fails to cap emissions

Back in June 2020, the Minister for Climate Change James Shaw released a statement criticising previous (National) governments for their management of the New Zealand emissions trading scheme. He said:

"the rules set by previous Governments left the scheme too weak to have any real impact on reducing our emissions."

Specifically Shaw said that the emissions trading scheme under National was "a cap and trade system without a cap."

Shaw concluded;

This has meant that emissions permitted under the scheme were, in effect, unlimited. I am delighted to say we are finally changing that.

So that's a great policy win isn't it? Cap and trade emissions trading is very simple really. And we have a Minister who 'gets it'.

Emissions trading schemes, although an exceedingly obtuse subject, can be explained in a single sentence.

"Cap and trade sets a maximum level of pollution, a cap, and distributes emissions permits among firms that produce emissions" (Grantham Institute).

Or;

"The government limits the supply of emission units into a trading market which then sets the emission price based on unit supply and demand" (Motu Research).

So an emissions trading scheme is all about scarcity of emissions permits. The cap.

So hey we are lucky to have a Minister for Climate Change who is well informed and well prepared and who is pushing through the obvious fixes, such as the lack of a cap, to the National Party's woeful emissions trading scheme.

However, there is a problem with this narrative from James Shaw that he has introduced a cap into the emissions trading scheme. It is factually wrong.

The New Zealand emissions trading scheme is still awash with excessive quantities of emission units. While these surpluses of emissions units remain available to buyers, the emissions trading scheme can in no way be described as capping emissions.

There are far too many surplus units in the NZ emissions trading scheme

There are six ways the New Zealand emissions trading scheme has too many units. A real cap on units means scarcity and demand being constrained to a limit on supply to a market. The six ways all involve variations on the theme of too many emission units. The emissions trading scheme in 2022 is still "a cap and trade system without a cap". This post now lists the six ways the scheme fails to limit emissions.

One - the enormous quantity of privately held units in the New Zealand emissions trading register

There are 158 million privately owned emission units recorded in the New Zealand emissions trading register run by the EPA.

Here is a chart of international emissions units accumulating in the Emissions Units Register because of the unlimited importing of units up to 2014

How did that happen?

Brian Fallow of the Herald wrote on 28 May 2014 that:

"..the collapse in international carbon prices has presented the smokestack sector with an arbitrage opportunity too. They have been able to hoard their NZUs, in the expectation they will be more valuable in the future, and meet their obligations in the meantime with cheap imported Kyoto units instead"

On 31 August 2015, Carbon forest consultant Ollie Belton said this;

"In 2012-2015 when the flood of Russian and Ukrainian ERUs were released, the tiny NZ ETS became the last market accepting them. This collapsed the NZ ETS price of carbon from about NZ$20/unit to about 20c/unit. NZ emitters naturally responded by meeting their surrender obligations with ERUs at a negligible cost (while back pocketing NZUs and making big arbitrage profits)."

"..trade exposed industries that were gifted up to 90% of their surrender obligations were able to meet all their obligations with the super cheap ERUs and bank the gifted NZUs. Since 2012, NZUs have had much higher market value than ERUs, generally more than five times as high, hence the arbitrage opportunity. Never have polluters had it so good. They have made hundreds of millions in arbitrage profits."

Dr Suzi Kerr of Motu said in 2016 that

"because of arbitrage, ETS participants now hold an excessive number of units that the government is required to accept against future emissions,”

By "arbitrage", Dr Kerr means the importing of fraudulent Russion and Ukrainian 'hot air' units into the emissions trading scheme described in the Morgan Foundation's Climate Cheats report. New Zealand Steel Limited were up to their necks in arbitrage.

These units are available to be sold to emitters for surrendering back to the Government at any time. They trump the so-called "cap".

Two - industrial over allocation of free emissions units

The free allocation of huge quantities of emissions units to large corporates like New Zealand Steel Limited and New Zealand Aluminium Smelter Limited under section 81 and section 83 of the Climate Change Response Act 2002 is production or output based. The emitters have always received more units than they need to surrender. Way more than a 90% entitlement.

Each year they receive a 'provisional' allocation of units which is calculated as their actual production from the previous year multiplied by the provisional allocative baseline. At year end they submit a 'final adjustment' return to the EPA once they know their actual output. The final units allocated to emitters equals their output multiplied by emissions factors. This process happens irrespective of any "cap" claimed by James Shaw. Free allocation trumps the "cap".

Three - price caps come at the expense of quantity caps - the cost containment reserve

The Ministry for the Environment's recent report "Te hau mārohi ki anamata | Transitioning to a low-emissions and climate-resilient future: Have your say and shape the emissions reduction plan." states on page 37 in footnote 14

"The cost containment reserve (CCR) is a reserve volume of units available to be released to the NZ ETS market if the CCR trigger price is hit at auction."

Auctioning of emissions units was another measure introduced in the June 2020 amendments to the emissions trading scheme.

Stuff's Olivia Wannan describes the cost containment reserve as

"a trigger to prevent the carbon price from going too high. If enough people place a unit bid above $50 during the auctions, the Government can sell an additional 7 million units. These equate to 7 million tonnes of additional climate pollution, which could be created this year or at any point in future."

Sure enough, during the September 2021 auction, the emissions unit price reached $50 per tonne and the additional 7 million units were released and sold to bidders at a price of $53.85.

So, again, the cost containment reserve is a farce that increased the supply of units to the market in spite of Minister Shaw's claim of a "cap" on units.

Four - The emissions budget is done backwards by subtracting the exceptions from the ETS

The New Zealand emissions budget for the 5 years 2021 to 2025, required by the Zero Carbon bill, was done backwards. It calculates by the sleight of hand of subtraction. It takes the emissions that should be capped and then subtracts the exceptions in the coverage of the emissions trading scheme. The exceptions gained by lobbying.

The Ministry for the Environment started with a gross emissions quantity of 354 million tonnes (mt) over 5 years (or 70.8 mt p.a.). They then subtract 194 mt for agriculture (outside the ETS, 39 mt p.a.), then 43 mt for free industrial allocation (8.6 mt p.a.) and then 27 mt for 'stockpile reduction (5.4 mt p.a.)'. By 'stockpile' they mean the 138 million units in private hands. And that they would like the 138 million units to reduce by less than 1% in 5 years.

The remaining number, 90 mt over 5 years becomes the indicative budget for the new auctions. It is therefore the amount to be auctioned.

The emissions budget under a plain ordinary vanilla cap'n'trade scheme should have been determined by addition. Add up the verified historic greenhouse gases from the inventory and the only subtraction should be the reduction amount to go from historic actual emission to enforceable limit or cap

Five - free industrial allocation of units included non-emitters.

Significant quantitles of emissions units were gifted to non-emitters as compensation or as a cost-reducing measure. The sectors are pre-1990 forest owners, the fishing boat owners and hothouse/glasshouse horticulture exporters. These allocations just lead to more stray units being supplied to the market for emitters to obtain for their increasing emissions. And more units in the private holdings of 138 million unit 'bank'.

Six - just run up an overdraft of emissions units with 'banking and borrowing'

Thanks to the Zero Carbon bill, the legislation provides for 'banking and borrowing' under Section 5ZF. This gives the Minister for Climate Change the power to fail to meet an emissions budget and to make up the difference with 'borrowing' the shortfall from the next emissions budget period. Again that is contrary to the idea of a "cap".

In spite of Minister for Climate Change James Shaw's claim of including a "cap", and in spite of the inclusion of "auctions" and "emissions budgets", the emissions trading scheme is still awash with surplus units. That's the opposite of scarcity of units implied by the word "cap". The emissions trading scheme remains a mix of creative carbon accounting and 'future-eating': emissions growth today and emissions reductions in the future (or maybe not all).

Dear James Shaw - continued excessive free allocation of units to big emitters is not a reform of the NZ Emissions Trading Scheme

Hon James Shaw

Minister of Climate Change

Contact Email j.shaw@ministers.govt.nz

Dear Minister Shaw,

I am writing to you to express my strong disappointment with your policy announcement "Emission trading reforms another step to meeting climate targets" of 2 June 2020.

This policy is a complete failure in terms of correcting the flaws in the New Zealand emissions trading scheme so that it prices emissions instead of insulating emitters from them.

The proposed "reforms" do not end the near-permanent excessive free allocation of emissions units to industrial emitters that the National Government introduced into the emissions trading scheme in 2012.

The reform proposed that I particularly object to is the Phase down of industrial allocation from 2021;

"Phase-out of industrial allocation at a rate of 1 per cent each year would start from 2021 and continue until 2030. The annual phase-out rate would increase to 2 per cent from 2031-2040 and to 3 per cent from 2041-2050."

Frankly this rate of phase out is a joke. It is not consistent with the Zero Carbon Amendment Act's 'Net Zero by 2050' goal.

Given that the free allocations are based on actual production, the quantity of units given to the biggest emitters like NZ Steel Development Limited and NZ Aluminium Smelter Limited, will in fact continue to increase out to 2050, in spite of the diminutive phase out rates you propose.

Let me estimate the phase out on an assumption of constant production at 2018 volumes.

I estimate that NZ Steel Development Limited (who were allocated 1,782,366 units in 2018 and if they maintain production at 2018 quantities) would still be allocated over 1 million units in 2048. They would still be allocated 942,202 units in 2050. That is only a reduction over the 30 years of 47%.

I estimate that NZ Aluminium Smelter Limited (who were allocated 1,324,556 units in 2018 and if they maintain production at 2018 quantities) would still be allocated over 1 million units in 2037. They would still be allocated 707,410 units in 2050. That is only a reduction over the 30 years of 47%.

As the free allocation of units (under Section 81 "Entitlement to provisional allocation for eligible industrial activities") is based on actual production quantities, emitters like NZ Steel and NZ Aluminium only need to increase annual production by 1% per annum in order to cancel out the 2021 to 2030 "phase down".

That seems quite likely as the free units allocated to NZ Steel Development Limited from 2011 to 2018 increased by 793,062 units. That equates to a growth rate in production of 6.35% per annum.

NZ Aluminium Smelter Limited's free allocation grew over the same period by 886,875 units or a growth rate of 9.56% per annum.

So to conclude, the proposed phase out rates of free allocation are not even likely to produce an absolute reduction in the free allocations to big emitters. As a policy for reducing emissions, this is completely perverse.

I also remind you that free allocations were only meant to be 'transitional' arrangements. That is to say, of a temporary nature. Of a finite duration. If the 2008 Labour Government version of the emissions trading scheme had been left as enacted, the industrial emitters would only be two years away from 0% free allocation. That scheme as you no doubt recall had a linear phase out of free allocations over a 12 year period. Transitional free allocations should not be 'phased out', they should just end.

I consider it completely egregious that you are proposing the continuation of free allocations to the big industries out to 2050.

It just completely undermines the good reputation you have earned with New Zealanders over your success in enacting the Zero Carbon Amendment Act and the Climate Commission. Frankly, what is the point of having either the Net Zero goal or the Climate Commission if the free allocations to industries continue to grow out to 2050?

Yours sincerely

Rio Tinto says that's a nice hydro-powered aluminium smelter you got, shame if something happened to it...

Another threat to close the Tiwai Point aluminium smelter. I better finish up my data project on the free gift industrial allocation of NZETS emissions units to the big high emitting industries.

Over nine years the Tiwai Point smelter alias New Zealand Aluminium Smelters/Rio Tinto Alcan received $82 million worth of free emissions units under the NZ emissions trading scheme

The Tiwai Point aluminium smelter, which is owned by New Zealand Aluminium Smelters Limited, which is majority owned by the multi-national corporate Rio Tinto Alcan, has been in the news over the last few days.

As welcome as a flurry of cold westerly fronts arriving from the Tasman Sea, the company's threat to close the smelter has consumed column inches of media coverage.

• 23/10/19; Rio Tinto considering closing Tiwai Aluminium Smelter
• 23/10/19; Bluff aluminium smelter could close taking power prices tumbling
• 24/10/19; Standard and Poor warns of potential risk to electricity generators in the event of a closure at Tiwai smelter
• 24/10/19; The Southland Times Editorial; Smelter review sets up an anxious wait for Southland
• 24/10/19; Rio Tinto's Tiwai Point aluminium smelter - should it stay or should it go?

None of the selection of articles I have read read mention the huge quantities of free emissions units gifted to New Zealand Aluminium Smelter Limited under our pointless and irrelevant emissions trading scheme.

So I better use the smelter news as a prompt to wrap up my data project on the industrial allocation of free emission units to emitters. And to do a couple of graphs.

Yes that's right. Instead of our emissions trading scheme requiring all emitters to buy and surrender emissions units - thus pricing the emissions, it gives some selected emitters free emissions units which they can then sell!

The industrial allocations have prompted some of my recent posts as well as this very detailed summary about New Zealand Aluminium Smelters Limited.

Over the nine years of the New Zealand Emissions Trading Scheme(from 2010 to 2018), New Zealand Aluminium Smelters Limited received 7,151,987 free emissions units. I estimate these had a market value of NZ$81,737,303.

Here is the graph of the unit allocations per year. What the fuck happened in 2013? 1,524,172 free units? It looks like they got an extra bonanza of free units to go with the $NZ30 million Bill English gave them.

Here is the graph of the estimated market value of the free units allocated per year.

Look how the market value sky-rocketed from 2016 onwards. That's just a reflection of the recovery in the emission unit prices once we were kicked out the international carbon markets after Tim Groser wouldn't sign up to a second commitment period of the Kyoto Protocol.

The price change and the consequent increase in market value isn't really a big deal. As I argued in this post about the smelter's free allocation, because the industrial allocation formula includes extra units to offset the fictitious ETS-related electricity costs, most but not all emissions units are surrendered back to the Government under the NZETS.

The industrial allocation certainly is a subsidy but the real function is to provide New Zealand Aluminium Smelters Limited a hedge or insurance policy that prevents them facing an actual emissions price under the NZETS. It's like a Clayton's emissions price!

All the calculations are documented on this Github repository I set up for the data project.

In 2018 the 6.7 million NZETS emission units allocated to 76 emitters were worth at least 243 million NZ dollars

All this data tidying and charting. It can lead to not seeing the forest for the trees. In this post I estimate the value of the 2018 free industrial allocation of emissions units to emitting industries. The number is 243 million New Zealand dollars. I find that gob-smacking

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.

EPA Industrial Allocation Units Value 2018

Name	Allocation	Value
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
Fonterra Limited	50664	1078129.92
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
Exception Limited	11618	247231.04
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
J.S.Ewers Ltd	5853	124551.84
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
Kingbridge Ltd	61	1298.08
Eseta Kovati, Reupena Kovati	37	787.36
GELITA NZ Ltd	29	617.12
Wallace Corporation Limited	0	0

Ten NZ companies were given 6.7 million free emission units in 2018

Have open tidy data; will graph it. I whip up a pie chart of the top ten New Zealand companies rorting the New Zealand Emissions Trading Scheme via free allocation of emissions units.

Of 6.7 million NZ Emissions Trading Scheme emission units allocated by the Environmental Protection Authority (given for free instead of being sold by auction) to industries in 2018, 6.2 million or 91% went to ten well-known New Zealand companies.

Here is the R script.

Here is the data of the emissions units gifted for free to industrial emitters in 2018.

Windfall gifting of emissions units to industry in 2018

Name	Allocation
New Zealand Steel Development Limited	1,782,366
New Zealand Aluminium Smelters Limited	1,324,556
Methanex New Zealand Ltd	945,210
Fletcher Concrete and Infrastructure Limited	584,032
Oji Fibre Solutions (NZ) Limited	484,322
Ballance Agri-Nutrients (Kapuni) Limited	325,594
Pan Pac Forest Products Limited	210,652
Norske Skog Tasman Ltd	200,556
Winstone Pulp International Limited	151,546
Graymont (NZ) Limited	144,405
Whakatane Mill Limited	139,690
ACI OPERATIONS NZ LIMITED	59,945
Fonterra Limited	50,664
Asaleo Care New Zealand Limited	29,419
Nelson Pine Industries Limited	26,569
Wallace Group Limited Partnership	26,539
Pacific Steel (NZ) Limited	19,550
EVONIK PEROXIDE LIMITED	18,443
Daiken New Zealand Limited	17,770
Dongwha New Zealand Limited	16,854
Status Produce Limited	15,496
Taranaki By-Products Ltd	14,197
Exception Limited	11,618
Tuakau Proteins Ltd	11,393
Anchor Ethanol Limited	10,784
Southern Paprika Limited	10,406
Alliance Group Limited	10,012
Affco New Zealand Limited	9,465
Under Glass (Karaka) Limited	7,574
Gourmet Mokai Limited	7,006
Under Glass (Bombay) Ltd	6,194
Websters Hydrated Lime Company Limited	5,999
J.S.Ewers Ltd	5,853
Hawkes Bay Protein Limited	5,740
CMP Canterbury Limited	5,470
Juken New Zealand Ltd	5,304
Gourmet Paprika Limited	4,837
PVL Proteins Limited	3,632
Fletcher Building Products Limited	3,344
Sharma Produce Limited	2,677
Gourmet Waiuku Limited	2,190
Kakariki Proteins Limited	2,037
Shipherd Nurseries Limited	1,900
Island Horticulture Limited	1,717
Tegel Foods Limited	1,632
Value Proteins Ltd	1,581
Whakatane Growers Limited	1,393
P H Kinzett Ltd	1,344
Moffatts Flower Company Limited	1,182
Karaka Park Produce Limited	1,169
Van Lier Nurseries Ltd	1,123
Taylor Preston Limited	1,104
Meenakshi Devi Sharma, Raj Kumar Sharma	1,080
Vege Fresh Growers Limited	1,075
Jai Shankar Growers Limited	928
Prime Range Meats Limited	928
Homestead Produce Ltd	881
Sinai Hort Limited	604
J.S. Mahey Limited	599
Castle Rock Orchard Ltd	564
Karamea Tomatoes Limited	526
Poppas Peppers 2009 Limited	351
Taaza Green Limited	337
Harbour Head Growers Ltd	261
Ting-Yuan Robert Wu	239
Parkgard Growers 2000 Limited	222
Antone James Ivicevich, Joanne Elizabeth Gould Ivicevich	210
Graeme Lowe Protein Limited	198
Mary Jane Fausett, Peter James Fausett	143
Pomoana Gardens Limited	100
John Hamilton Charles Falloon, Paul Gregory Whitehead	79
Royal Roses Limited	66
Kingbridge Ltd	61
Eseta Kovati, Reupena Kovati	37
GELITA NZ Ltd	29
Wallace Corporation Limited	0