Negotiated Greenhouse Agreements (NGA)


A Step into the Future for Holcim

While the original Voluntary Agreements framework were an opportunity for early movers like Holcim to engage proactively in managing climate change emissions, New Zealand Government policy has also matured in the years since the first VA in 1995.

In September 2005, Holcim (New Zealand) Ltd was invited to enter into negotiations with the Government's Climate Change Office to pursue a Negotiated Greenhouse Agreement for its cement manufacturing and shipping business.

The planned introduction of a New Zealand carbon tax on 1 April 2007 - set at $15 per tonne CO 2 emitted - meant that energy intensive businesses, like Holcim, were at a serious disadvantage relative to competitors in countries with�less stringent climate change policies. Recognising that this could mean the loss of a significant portion of New Zealand's major industrial capacity (a risk known as 'carbon leakage'), the Government introduced NGAs as a mechanism to encourage major industry to invest in achieving world's best practice in emissions performance. In return for business making necessary investments, and achieving world's best practice, Government agreed to waive the immediate imposition of tax on qualifying businesses.

In order to qualify for an NGA, Holcim had to provide very detailed technical and financial performance data to the Climate Change Office (CCO). This data was then evaluated by the CCO against a series of strictly-defined criteria, and it was determined that Holcim was very definitely 'competitive-at-risk' - and that the company qualified to negotiate an NGA.

The negotiation commenced in September 2005, however, in December 2005 the Government announced that it would not proceed with its proposed carbon tax and it is now considering and it is now considering other ways to meet New Zealand's commitments to cut greenhouse gas emissions.