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4.49. In line with New Zealand's vision to address climate change and create a clean and sustainable economy, the Crown Minerals (Petroleum) Amendment Act 2018 provides that no further offshore oil and gas exploration permits will be granted. In addition, the Amendment further limits the award of new petroleum exploration permits to the onshore Taranaki Region only.

4.50. In 2019, the minerals and petroleum resource strategy for 2019-29 was adopted. It sets the Government's long-term vision for the minerals and petroleum sector to support New Zealand's transition to a carbon-neutral economy.

4.54. The quality of petrol and diesel sold in retail outlets is regulated under the Engine Fuel Specifications Regulations 2011. From 2022, the quality of marine fuels will also be regulated pursuant to Annex VI of the International Convention for the Prevention of Pollution from Ships (MARPOL).

4.58. The Government's approach to manufacturing aims to support more innovative industries and boost the sectoral productivity, sustainability, and inclusivity in key industries. To help realize the sector's potential, the authorities state that a strategic plan, the Advanced Manufacturing Industry Transformation Plan, is being developed. (...). The major pillars of the plan include growing innovation and investment, attracting and developing a high skilled workforce, creating a leading sustainable and low emissions sector, and enhancing global connectivity and opportunities.

4.61. The main environmental measures in manufacturing consisted of the phase-down, under the and New Zealand Trade and Enterprise (NZTE) (an international business development agency), of all industrial allocations (free allocation of carbon emission rights) from 2021. Under the new system, the NZETS will reduce the amount of free allocation for every activity by 1% each year from 2021 to 2030, with greater reductions (2%) annually after 2030 and 3% annually after 2040.

4.69. The main challenges facing New Zealand's financial sector include the rapid increase in housing prices over the past 18 months to above what appears to be sustainable, increasing the chance of a correction. Also, recent buyers are borrowing more relative to their income, and may be vulnerable to higher mortgage rates or a fall in house prices. Another important risk is that posed by climate change. The RBNZ sees climate change as a risk to financial stability, given its associated physical and transitional risks. In recent years, for example, the costs of weather-related catastrophes in New Zealand have been rising. During the review period, New Zealand experienced some of its most costly tornados, floods, hailstorms, and fires. For insurance companies, this implies increasing claims , leading to situations where insurance cover might become more expensive or unavailable, as it would no longer be commercially viable.

4.70. (...) financial authorities are looking to introduce a mandatory climate-related financial disclosure for financial entities. In October 2021, the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Bill was passed and received Royal Assent. It aims to make climate-related disclosure mandatory for several entities, including large listed companies with a market capitalization of more than NZD 60 million; and large licensed insurers, registered banks, credit unions, building societies, and managers of investment schemes with more than NZD 1 billion in assets. The aim is to ensure that businesses factor the effects of climate change into their business decisions. [43] The Government has tasked the External Reporting Board (XRB), an independent Crown entity responsible for accounting, auditing, and assurance standards in New Zealand, with developing reporting standards to support the new reporting regime. The first climate standard is expected in December 2022. [43] External Reporting Board, Climate-related Disclosures. Viewed at: https://www.xrb.govt.nz/extended-external-reporting/climate-related-disclosures/.

3.86. The CO2 levy, which entered into force on 1 January 2008, is designed to reduce the use of fossil fuels and thus the associated CO2 emissions. The tax rate was originally set at CHF 12 per tonne of CO2, gradually rising to CHF 60 per tonne in 2014, CHF 84 in 2016, CHF 96 in 2018, and reaching the maximum levy established in the legislation of CHF 120 in 2022. The rise decided in 2021 follows the acknowledgement that CO2 emissions linked to the use of fuels have only dropped by 31% since 1990, below the initial minimum target of 33%. Around two thirds of the revenue from the CO2 levy is redistributed to the population and the economy. With one third of the revenue (max. CHF 450 million), the Confederation and the cantons support energy efficient renovations and renewable heating energy through the buildings programme. Another CHF 25 million is allocated to the technology fund for the promotion of innovative companies. As a result of the rejection of the proposed reform of the Federal Act of 23 December 2011 on the Reduction of Greenhouse Gas Emissions (RS 641.71) (CO2 Law), the tax cannot currently be raised beyond CHF 120. Following a partial revision of the CO2 Law based on Parliamentary Initiative 21.477 ("Extensions of the reduction targets in the current CO2 Law"), Swiss installation operators in certain sectors with a reduction commitment will remain exempt from the CO2 levy. Under the new proposal for a revised CO2 law put under consultation by the Federal Council in December 2021 for the period 2025 2030, all installation operators will be exempt from the tax if they commit to reduce their emissions from fuels and demonstrate how they intend to decrease these emissions down to zero in the long term. Operators of installations participating in the Swiss Emissions Trading Scheme (ETS) can also continue to apply for a tax exemption. The ETS is regulated for an unlimited period of time and was not affected by the rejection of the revised CO2 Act in 2021 (further information about the rejected revision of the CO2 Law and its consequences can be found in Section 4.2.2.1.2.1).

3.87. In 2021, the Swiss people rejected the proposed reform of the Federal Act of 23 December 2011 on the Reduction of Greenhouse Gas Emissions (RS 641.71) (CO2 Act). Because of the "no" vote, the tax cannot currently be raised beyond CHF 120. Following a partial revision of the CO2 Act based on Parliamentary Initiative 21.477 ("Extensions of the reduction targets in the current CO2 Act"), the obligation for fuel importers to compensate part of their CO2 emissions by investing in projects for climate protection will be maintained, as well as the objective of a 50% reduction of greenhouse gas (GHG) from 1990 levels by 2030. The initiative was agreed upon by both chambers of the Federal Assembly in December 2021 in order to provide for a legal basis to pursue the objectives of reductions of the Government and entered into force in 2022 for the period from 1 January 2022 to end 2024 (further information about the rejected revision of the CO2 Act and its consequences can be found in Section 4.2.2.1.2.1).

3.88. In Liechtenstein, CO2 levy revenues collected from households are not redistributed in the same manner as they are in Switzerland, but are used as state income for the general state budget. Among revenues collected from the industries, one third is used for environmental policy measures such as for public transportation, and two thirds are redistributed to the companies in proportion to the payroll of their employees. The rejected reform of the CO2 Law by the Swiss people ended the planned revision of the corresponding Liechtenstein CO2 Law. Even though Swiss environmental taxes and levies are not immediately applicable in Liechtenstein, they are nonetheless synchronized as per the customs union [117]. Liechtenstein thus applies its own legislation on environmental taxes and levies; however, rules and levels of taxation are identical to those applied by Switzerland. The authorities indicate that Liechtenstein's target of a 40% reduction in GHG emissions from 1990 by 2030, as per the Paris Agreement, remains in place. The Liechtenstein authorities indicate that the corresponding legal basis in Liechtenstein's law of Swiss Parliamentary Initiative 21.477 should be published in April 2022.
[117] For more information on environmental levies, see treaties LGBI 2010 Nr. 12 and LGBI 2010 Nr. 13.