Two official releases arrived on 12 August 2026. They come from different agencies, serve different statutory purposes, and are measured in units that look similar enough to be mistaken for one another. Both are worth reading properly.
1. The 2026 electricity allocation factor: 0.424 tCO2e/MWh
The Electricity Authority has determined the 2026 electricity allocation factor at 0.424 tCO2e/MWh. That is down from 0.516 tCO2e/MWh, a fall of roughly 18%.
The Authority attributes the decrease to high renewable generation during the 2025/26 financial year and a corresponding decrease in coal and gas-fired generation, alongside lower wholesale prices and strong hydro inflows. Under the Climate Change Response Act 2002 the Authority must calculate the factor and publicly release both its market model and the supporting data, which is a useful discipline: the working is published, not just the answer.
The electricity allocation factor is an input to the annual industrial allocation calculation for eligible electricity-intensive producers. In plain terms, it is an estimate of how much the ETS adds to wholesale electricity prices, used to size the compensation those producers receive. It is a price-effect measure.
A determination is not yet the operative figure
This is worth being precise about, because it is easy to read a new number as the number that now applies. It does not, yet.
Regulation 6(a) of the Climate Change (Eligible Industrial Activities) Regulations 2010 currently reads 0.516 tCO2e/MWh, amended into force on 1 January 2026 by the Climate Change (Eligible Industrial Activities) Amendment Regulations (No 2) 2025. For a newly determined factor to have legal effect it must first be notified to the Minister under section 161FA of the Climate Change Response Act 2002, and then prescribed by regulation - which in previous years has taken effect from the following 1 January.
So there are two figures in play, and they are both correct about different things. 0.424 is what the Electricity Authority has determined. 0.516 is what the regulations currently say. If you are calculating an allocative baseline today, the regulations give you 0.516.
2. EPA participant emissions and removals, year to 30 June 2026
The EPA has published its annual ETS participant emissions report covering 1 July 2025 to 30 June 2026, as required by section 89A of the Climate Change Response Act 2002. It sets out the emissions caused by participants carrying out their activities, and removals of greenhouse gases such as those from forestry.
Participant-level data has been published since 2021, and the release sits alongside a supplementary spreadsheet covering 2020 to 2025 and a historic dataset going back to 2008. For anyone trying to understand who actually carries surrender obligations in New Zealand, and at what scale, this is the primary source rather than an estimate.
The distinction that catches people out
Both figures are expressed per unit of electricity, and they are not interchangeable. Putting them side by side:
- Electricity allocation factor: 0.424 tCO2e/MWh newly determined, 0.516 tCO2e/MWh currently prescribed. How much the ETS is estimated to add to wholesale electricity prices. Used to size industrial allocation. Determined by the Electricity Authority, prescribed by regulation.
- MfE annual average electricity emissions factor 2025: 0.0786625 kg CO2e/kWh, which is 0.0787 tCO2e/MWh. The average emissions intensity of electricity delivered. Used for scope 2 emissions reporting. Published by the Ministry for the Environment.
The allocation factor is roughly five times the grid emissions factor at the newly determined value, and over six times at the figure currently prescribed - because it is not measuring the same thing. One is a market price effect; the other is an emissions intensity. Using the allocation factor to report a scope 2 footprint would overstate it by a wide margin, and using the grid factor to estimate an allocation entitlement would understate it just as badly.
There is a third figure worth knowing about if you go looking, and it catches people out too. Regulation 6(b) of the same regulations prescribes a flat 1 tCO2e/MWh for testing the emissions intensity of an eligible industrial activity. That is a threshold test, not a measurement of anything, and it belongs with neither of the two above.
What the two do share is a driver. The same shift toward renewable generation that pushed the allocation factor down also moves the grid emissions factor. The MfE annual averages we publish through our free factor API show the pattern clearly: 0.0817278 in 2022, 0.0765687 in 2023, 0.0993596 in 2024 - a dry year with more thermal generation - and back down to 0.0786625 in 2025, all in kg CO2e/kWh.
This is why we treat the choice of electricity factor as a first-order correctness question rather than a detail. MfE also publishes the grid factor quarterly, and within a single year the quarterly figures have varied by around a factor of four. The same 120 MWh of consumption can be reported as materially different tonnages depending only on which published factor is applied. Annual averages, which most tools default to, hide the largest lever many New Zealand businesses actually have.
What Carbon Trader® supports today
We would rather be exact about this than generous, so here is the honest split.
Emissions measurement, using the published MfE factors. Our Carbon Tracker ledger records energy and activity data against the Ministry for the Environment's published emission factors and produces GHG Protocol scope 1, 2 and 3 rollups. Every emission record freezes the factor identifier, value, unit and MfE release used, so a figure already reported does not silently change when factors are revised. The full 902-factor catalogue, including the electricity factors quoted above, is available through our free public emission factor API and search - no account required.
Surrender obligations and the compliance calendar. Our My Obligations dashboard calculates an indicative surrender liability from the statutory default emission factors - the Climate Change (Stationary Energy and Industrial Processes) Regulations 2009, the Climate Change (Waste) Regulations 2010, and the Climate Change (Liquid Fossil Fuels) Regulations 2008 - and tracks the 31 March emissions return and 31 May surrender dates with reminders ahead of both. It shows your position against units held, and where there is a shortfall it starts a marketplace buy request with the quantity prefilled.
Sourcing the units. Where a participant needs units between the Crown's quarterly auctions, our marketplace supports listings, buy requests and private quote rooms, with identity verification on both sides and escrowed settlement. We also publish the full Crown auction history.
What we do not do yet, and what is planned
Neither of the 12 August releases is currently wired into the platform. Specifically:
- The electricity allocation factor is not modelled. Carbon Trader® does not calculate industrial allocation entitlements, and neither the determined nor the prescribed figure is used anywhere in the platform today.
- Industrial allocation more broadly is not modelled. Our obligations tooling covers the surrender side, not allocation entitlements.
- EPA participant emissions data is not ingested. We read it as a source when researching the market, but it is not available inside the platform, and the annual publication is not tracked automatically.
All three are planned for the next release. Our intention is that the annual EPA publication is surfaced as a reference dataset, and that the electricity allocation factor is carried as a properly labelled, separately sourced figure - explicitly not merged with the MfE grid emissions factors already in the catalogue, and carrying the determined and prescribed values separately with their dates, for the reasons set out above. A single "current factor" field would be wrong for several months of any year. We will say so here when it ships rather than before.
Sources
Electricity Authority - Determination of the 2026 electricity allocation factor
Environmental Protection Authority - Emissions returns and participant emissions reports
Climate Change (Eligible Industrial Activities) Regulations 2010 - regulation 6 and Schedule 2
Ministry for the Environment - Measuring Emissions: A Guide for Organisations
Carbon Trader® - ETS settings confirmed to 2031
Important notice
This article summarises publicly released official data and describes platform functionality. It does not provide financial, legal, tax or investment advice, and nothing in it is a recommendation to buy, sell, hold or surrender units, or a forecast of future NZU prices. Figures are as published by the Electricity Authority, the Environmental Protection Authority and the Ministry for the Environment at 12 August 2026, and as prescribed in the Climate Change (Eligible Industrial Activities) Regulations 2010 as at that date. A determined allocation factor has no legal effect until it is prescribed by regulation. Emissions returns and allocation entitlements are determined by the EPA on the basis of your own data, not by any figure shown on this platform. Readers should confirm figures against the primary sources linked above and seek their own professional advice before making commercial decisions.
Contact us
Want to work out what your surrender position looks like against the statutory factors, or measure a scope 2 footprint against the right electricity factor rather than a default? Contact Carbon Trader® for platform guidance and operational support.