Article Feb. 26, 2016
Maintaining environmental excellence in New Zealand
We strive to conduct our business in a manner that is protective of the environment and compatible with the environmental and economic needs of the communities in which we operate.
Article Feb. 26, 2016
Maintaining environmental excellence in New Zealand
Mobil is committed to achieving and maintaining excellence in environmental care throughout our operations in New Zealand. Our aim is to continuously improve our performance with the goal of driving operational incidents with environmental impact to zero.
We structure the management of our operations and delivery of leading environmental performance around our ExxonMobil's Operations Integrity Management System (OIMS). OIMS provides a structured framework for operational standards covering safety, health and environmental protection.
It is a requirement that all of our operations observe the strict systems and practices that flow from OIMS.
We support this commitment to operational excellence through ongoing planned investment in plant and equipment, training and process improvements.
Continuous improvement means continuing to find better ways to perform. With this in mind ExxonMobil's Safety, Health & Environment (SHE) organisation has developed a global initiative — Protect Tomorrow. Today — which is aimed at further improving our environmental performance.
This initiative was developed to provide additional guidance and drive environmental progress in the same way that Nobody Gets Hurt drives safety performance improvements.
The Protect Tomorrow. Today program involves an increased focus on further improving operating practices and an increased emphasis on quantitative targets and measures.
The New Zealand Emissions Trading Scheme
As part of its response to climate change, the New Zealand Government has legislated to establish an Emissions Trading Scheme (NZ ETS).
New Zealand is a signatory to the Kyoto Protocol to the United Nations Framework Convention on Climate Change (UNFCCC) and the NZ ETS operates within the cap on greenhouse gas emissions established by the Kyoto Protocol during its first commitment period (2008-2012).
Under the NZ ETS there is no cap on emissions that occur within New Zealand. However, domestic emissions that exceed New Zealand's allocation under the Kyoto Protocol must be matched by emissions units purchased internationally from within the Kyoto cap on emissions.
The NZ ETS is a market-based approach, under which greenhouse gas emitters are required to monitor emissions, purchase emissions units and surrender ("acquit") them to Government after year end.
The NZ ETS covers the following sectors of the economy, with staged commencement:
Sector | Commencement Date
- Forestry | 1 January, 2008
- Liquid Fossil Fuels | 1 July, 2010
- Stationary Energy & Industrial | 1 July, 2010
- Synthetic Gases | 1 January, 2013
- Waste | 1 January, 2013
- Agriculture | 1 January, 2015
Mobil Oil New Zealand Limited is a mandatory participant under the Liquid Fossil Fuels sector of the NZ ETS, and from 1 July, 2010, is required to purchase emissions units in relation to the amount of greenhouse gas emissions that are estimated to result from the use of the transport fuels that it sells in New Zealand.
As a consequence, the cost of supplying petroleum fuels has increased from that date.
What legislation establishes the NZ ETS, and what does it do?
The Climate Change Response Act 2002, as amended by the Climate Change (Emissions Trading) Amendment Act 2008 and the Climate Change Response (Moderated Emissions Trading) Amendment Act 2009, establishes New Zealand's ETS, which obligates participants to monitor their greenhouse gas emissions (or the estimated embedded emissions associated with use of the fuel they sell), purchase emissions units, and surrender them to Government after year end. Further legislative changes embodied in the Climate Change Response (Emissions Trading and Other Matters) Amendment Act were passed by the Parliament in November 2012.
The Climate Change (Liquid Fossil Fuels) Regulations 2008 as amended in 2009, set out the liquid fossil fuels that are covered by the NZ ETS, and the methods for participants to monitor and calculate the emissions that result from the use of those fuels.
How does Mobil estimate the emissions embedded in the fuels it sells?
Mobil estimates the amount of embedded greenhouse gas emissions purchased by each customer using the default emissions factors set out in the Climate Change (Liquid Fossil Fuels) Regulations 2008 as amended by the Climate Change (Liquid Fossil Fuels) Amendment Regulations 2009. This calculation establishes Mobil's obligations under the NZ ETS.
How much does the NZ ETS impact the cost of fuel Mobil sells?
It is not possible to predict the amount of the impact that this additional cost will have on fuel prices, as it will be influenced by the market price for the emissions units Mobil purchases to satisfy its obligations, the direct impact that the NZ ETS has on Mobil's costs of doing business (such as trucking and electricity costs), as well as by the competitive local market.
A transitional phase of the NZ ETS exists until at least 2015 (at which time the next review of the ETS is scheduled):
- A 50 percent obligation applies, with participants being required to surrender one emissions unit for every 2 tonnes of carbon dioxide equivalent (CO2-e) emissions that are estimated to result from the use of the transport fuels that they sell in New Zealand.
- An effective price cap is also in place, with participants able to pay the Government a fixed price of $25 to acquit 2 tonnes of these emissions, rather than purchasing other types of eligible emissions units at market prices.
What transport fuels are covered by the Liquid Fossil Fuels sector of the NZ ETS?
The NZ ETS covers liquid fossil fuels used in New Zealand, including petrol, diesel, aviation gasoline, jet kerosene, light fuel oil and heavy fuel oil. It also includes any other liquid fossil fuel that is directly combusted when used.
LPG is not included in the Liquid Fossil Fuels sector of the NZ ETS, but is included as a natural gas under the Stationary Energy and Industrial Processes sector of the scheme.
Exports, and fuel used for international aviation and marine (except for fishing) transport are exempt from the scheme.
Biofuels are also exempt. Where biofuels such as ethanol or biodiesel are blended with a liquid fossil fuel in a transport fuel, emissions costs only apply to the liquid fossil fuel component of the blend.
Lighting kerosene, solvents, chemicals and lubricants are explicitly excluded from the scheme.
What greenhouse gases are covered by the NZ ETS?
The NZ ETS covers emissions of all greenhouse gases covered by the Kyoto Protocol. The most common of these is carbon dioxide (CO2), but methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride are also included.
Where can I obtain further information on the NZ ETS?
Further information on the NZ ETS is available from the following Government websites:
Community engagement in New ZealandOur approach to corporate citizenship involves more than compliance with applicable laws, sound business practices and operational excellence.
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