Overview
To bid in an auction, collateral must be received at least three business days before the auction (T-3). Any collateral received after this can't be used towards the auction.
Acceptable forms of collateral are:
- Cash
- Non-cash collateral (e.g. Letter of Credit)
The minimum collateral to participate in an auction is:
- 500 (minimum NZU for one bid) times the price floor times 25%
- For example: with the 2026 price floor of $71, this is $8,875, (500 x $71 x 25%)
For further information on price floor settings, please click here.
Single bid scenario
For a single bid scenario, a participant's maximum bid is equal to four times their eligible collateral (collateral held at T-3).
For example:
- A participant's eligible collateral is $1,000,000.
- This participant can bid up to $4,000,000.
Multibid scenario
In a multibid scenario, bids are ordered from highest to lowest bid price and bid quantity is summed cumulatively. The bid value is calculated by multiplying the cumulative bid quantity at each price point, and the collateral required is 25% of the maximum potential bid value.
Cash collateral
Cash collateral needs to be received in the ETS Auction Collateral bank account three business days before an auction (T-3). This is a Crown bank account and only NZD will be accepted.
ETS auction collateral bank account:
- Bank account name: ETS Auction Collateral Account
- Bank account number: 03-0049-0003202-021
- Reference: Your EPA Registry account number
The Registered Bidder or Authorised User can instruct that cash collateral is used to pay the invoice by contacting us at NZETSAuctions@xpansiv.com. Remember to update this well before the auction. Changes between auction day and five business days after the auction may not be reflected.
Note: Interbank and international bank transfers may take a few days. Please ensure you allow time for this. Cash collateral needs to be received three business days before an auction.
Non-cash collateral
Non-cash collateral must be accepted by the Ministry for Cities, Environment, Regions & Transport (the Ministry) at least three business days before the auction (T-3).
We recommend participants wanting to lodge non-cash collateral start the process with their bank and advise the Ministry of their intention to do so at least eight working days before the scheduled date of the auction (T-8). This allows the advising bank for ETS auctions sufficient time to undertake verification checks on requests from prospective participants. Participants are also asked to avoid lodging non-cash collateral too close to the registration deadline to avoid any processing delays.
The Ministry can provide a standard letter of credit template to use for non-cash collateral. Contact ETSGuaranteeFinance@mfe.govt.nz to get this template. Alternative forms of non-cash collateral can be used if they meet the negotiable instrument requirements detailed below. Alternative forms of non-cash collateral may take longer to process, so we recommend providing this early.
To secure payment of, or performance of the obligation to pay, the negotiable instrument must be:
- Unconditional and irrevocable and meet these requirements:
- Payable on demand to the Ministry for Cities, Environment, Regions & Transport Bank: Westpac
Account number: 03-0049-0003202-022
Bank’s SWIFT code: WPACNZ2W
- The negotiable instrument must:
- Be valid for at least 15 business days after auction date
- Be issued by a person or organisation with a credit rating of no less than BBB+
- State that it “must be presented on claiming payment”
- If non-cash collateral is provided on behalf of more than one Registered Bidder or Authorised User, it must specify the maximum amount of collateral value attributable to each Registered Bidder or Authorised User, totalling no more than the total collateral value of the non-cash collateral.
- The non-cash collateral won't be accepted in person or by post. It must be emailed as stated below.
- The non-cash collateral must be in a form that meets the requirements of the regulations and, in particular, the definition of negotiable instrument in the Personal Properties Securities Act 1999 (being that the non-cash collateral states on it that it must be presented on claiming payment).
If you would like to lodge non-cash collateral, please email this to the Ministry directly at ETSGuaranteeFinance@mfe.govt.nz.
Return of collateral
If the cash collateral held is greater than the invoice amount, the excess will be returned to you as soon as reasonably practicable after your invoice has been settled.
Frozen period
Collateral transactions aren't allowed from three business days before the auction to four days after. Collateral can't be added, changed, or withdrawn during the frozen period.
Any collateral received during the frozen period won't be eligible to contribute to the bidding amount.
If you want your cash collateral to be returned before the auction, this must be requested at least three business days before the auction. Please contact us at (+64) 4 887 2008 or NZETSAuctions@xpansiv.com.