COP31 opened in Antalya with low expectations, but for New Zealand business the more urgent story is at home. The NZ ETS has been through a rough year. After the government uncoupled the scheme from international pledges in late 2025, NZU prices fell from about $50 to as low as $33. A failed auction followed, and buyers are still cautious. The Climate Change Commission now says the unit surplus is shrinking faster than expected and a shortfall is possible as early as 2028. It also projects industrial free allocation will absorb the entire cap by 2035, leaving nothing to auction. That combination, a price crash followed by tightening supply, is a classic setup for a spike. Firms budgeting on today's soft carbon price should treat it as a risk, not a forecast. The article's advice to stress-test exposure to a shortage-driven rebound and push for stable ETS settings is practical. Business can plan around a high carbon price. It cannot plan around rules rewritten overnight.
