New Zealand climate change minister Simon Watts said on August 5, 2026 that any New Zealand carbon border adjustment mechanism would be developed "in conjunction with Australia", and that a move would probably come "later next year". Watts made the remarks at the Carbon Forestry 2026 conference in Rotorua, as reported by Argus Media and corroborated by Carbon Pulse. For exporters of carbon-intensive goods, the signal is that the number of markets applying a carbon cost at the border is set to keep growing beyond the EU and the UK.
No New Zealand CBAM exists today, and no formal proposal has been published. What exists is a ministerial statement tying Wellington's thinking to Canberra's, where the 2026-27 review of the Safeguard Mechanism is already weighing a border carbon adjustment starting with cement and clinker imports. Both processes feed the trend mapped in our guide to the countries implementing their own CBAM: border carbon adjustment is spreading from a single EU experiment toward a multi-jurisdiction reality.
What Simon Watts said in Rotorua
Watts told the Carbon Forestry 2026 conference in Rotorua on August 5, 2026 that any New Zealand CBAM would be developed together with Australia, with a decision likely later in 2027, according to Argus Media. His exact framing left no doubt about the trans-Tasman coupling: "I would expect that if there was ever any policy change in this area, that would be something that would be in conjunction with Australia," Watts said, per Argus Media's report. On timing, he added: "I think it's probably going to be something that will come later next year, looking where the Australians are."
Argus reported that the government describes itself as "actively monitoring" border carbon policy developments and "open-minded" about implementation. Carbon Pulse corroborated the remarks in its own coverage of the conference.
The context of the question matters. Watts was responding to whether a border measure would be a better tool than direct industry support, a live debate in New Zealand after the government committed a grant of up to NZ$60 million to Golden Bay Cement to preserve domestic cement manufacturing capability, according to Argus Media. New Zealand already prices carbon domestically through its own emissions trading scheme, so the underlying logic is the same carbon leakage problem the EU built its mechanism to solve: a domestic carbon price without a border adjustment leaves local producers exposed to unpriced imports.
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Australia's position: a review process, not a decided policy
Australia has not adopted a CBAM; its 2026-27 Safeguard Mechanism review is considering one, with cement and clinker imports as the recommended starting point. The distinction matters for anyone planning around these remarks. The Carbon Leakage Review, led by economist Frank Jotzo and published by the Department of Climate Change, Energy, the Environment and Water on February 13, 2026, recommends a staged Australia border carbon adjustment beginning with cement and clinker. Per Argus Media's report, the review process is weighing a mechanism that could later extend to hydrogen, steel, ammonia, urea and ammonium phosphate.
The Australian government is weighing that recommendation inside the 2026-27 Safeguard Mechanism review, a decision window running from July 2026 to June 2027. No implementing legislation has been introduced to Parliament. Watts' "looking where the Australians are" comment ties New Zealand's timeline directly to that window: if Canberra decides during the review period, Wellington's "later next year" would follow the outcome rather than lead it.
The border-carbon club keeps growing
A trans-Tasman mechanism would extend the list of jurisdictions with operating or planned border carbon adjustments, a list currently headed by the EU, live since January 1, 2026, and the UK, which launches January 1, 2027. The table below sets out where each jurisdiction stands as of August 5, 2026.
| Jurisdiction | Status | Design | Timeline |
|---|---|---|---|
| European Union | In force | Certificate-based, priced at EU ETS quarterly averages | Definitive phase since January 1, 2026 |
| United Kingdom | Adopted, pre-launch | Direct tax administered by HMRC, priced against the UK ETS | Launches January 1, 2027 |
| Australia | Under review | Carbon Leakage Review recommends staged rollout, cement and clinker first | Decision window runs to June 2027 |
| New Zealand | Ministerial signal only | Would be developed "in conjunction with Australia" | "Later next year" per Simon Watts |
| Canada | Under consideration | Would build on the Output-Based Pricing System | No confirmed timeline |
Argus Media's report notes that Canada and the US are actively exploring similar border measures, citing an April report by New Zealand's Climate Change Commission. Each entry on this list represents a different design philosophy. The EU runs a certificate mechanism linked to its emissions trading system, while the UK CBAM takes the form of a direct tax payable to HMRC, and Australia's recommended model would mirror its existing Safeguard Mechanism baselines rather than create a certificate market. A New Zealand mechanism aligned with Australia would presumably inherit that baseline-referenced design, though no design document exists yet.
What multiplying regimes mean for exporters
Each new border carbon regime multiplies the documentation and verification requirements an exporter faces across markets. A steel or cement producer selling into the EU, the UK, and a future trans-Tasman market would need to satisfy three separate compliance systems for the same tonne of product. The practical burden splits into four parts, listed below.
- Separate emissions reporting: each regime defines its own system boundaries, reporting formats, and default values, so one installation-level dataset must be repackaged per destination market.
- Different price references: the EU prices certificates at quarterly EU ETS auction averages, the UK will charge a tax tied to the UK ETS, and an Australian mechanism would reference Safeguard Mechanism baselines.
- Divergent sector scopes: the EU covers six sectors, the UK adds ceramics but excludes electricity, and Australia's recommendation starts with just cement and clinker.
- Separate carbon-price deduction rules: whether a carbon price paid at home, or a border charge paid in one market, counts against liability in another remains unresolved between most regime pairs.
Proliferation also raises the stakes of the legal contest over whether these mechanisms are WTO-compatible. The more jurisdictions adopt border carbon adjustments, the more precedent-setting the first dispute becomes: Russia's challenge to the EU mechanism is moving forward, with panel establishment expected at the September 25 DSB meeting after the EU blocked the first request. Trading partners are responding through diplomacy as well as litigation, as the dedicated CBAM annexure in the India-EU FTA shows.
What happens next
Three dates frame the trans-Tasman question: the UK CBAM launch on January 1, 2027, the June 2027 close of Australia's review window, and Watts' "later next year" signal for New Zealand. The UK CBAM launches on January 1, 2027, doubling the number of operating border carbon regimes. Australia's Safeguard Mechanism review window closes in June 2027, which is the decision point Watts says New Zealand is watching. And "later next year", on the minister's stated timeline, places any New Zealand policy move in the second half of 2027, after Canberra has shown its hand.
For exporters, the planning assumption is no longer a single EU mechanism but a widening set of border carbon regimes with different designs and start dates. The full jurisdiction-by-jurisdiction comparison, including Canada and the other economies running feasibility work, is maintained in the global CBAM guide.