At $22.50 the price of the New Zealand carbon credit (NZU) dropped to its lowest since August 2018 as the market responded to those cashing in on the NZU’s sustained pricing at the $25.00 ceiling. Refrigerant prices drop in response.
Meanwhile the New Zealand Government seeks to make changes to the ETS that will remove the current $25 fixed price option price ceiling at the point when auctioning begins, or no later than 31 December 2022.
In global news, the World Bank have released a media statement stating just 1% of global greenhouse gas emissions are at prices likely to drive the emissions cuts needed to preserve life as we know it. The bank believes credits need to be within the $NZ60 to $120 by next year, and by 2030 trading between NZ$75 – $150– well above current trading.
Why is the NZU important for the cost of refrigerant?
Importers are required to offset the cost of the emissions produced by refrigerants as part of our international obligations to reduce global warming impacts. The importer of the product must surrender (buy) carbon credits to offset emissions, with this cost added to the wholesale price. How much added cost you can expect will depend on three things:
Looking to understand the cost of refrigerant? Do you have enough insurance cover on existing systems in case of an accident or failure? Need to understand the risks future supply of synthetic refrigerants?
If you’d like to know more or are looking to understand how the changes occurring will affect you, please contact us.