# New Zealand climate policy and trade compliance > Live situation record from CLSTR: https://clstr.news/situations/new-zealand-climate-policy-and-trade-compliance > Updated: 2026-09-29T22:04:24.000Z. Sources: 6. Developments: 2. The New Zealand government has acknowledged that its Emissions Trading Scheme (ETS) will be insufficient to meet the third emissions budget (EB3) for the 2031-35 period. While the country is reportedly on track to meet its current emissions budget ending in 2030, the subsequent budget is estimated to be off-track by approximately 8.7 million tonnes. This domestic policy challenge has escalated into an international legal matter. The Dutch organization Both ENDS, supported by Greenpeace Aotearoa, has lodged a formal complaint with the European Commission. The complaint alleges that New Zealand is failing to comply with sustainability clauses within the EU-NZ Free Trade Agreement, which requires parties to effectively implement the Paris Agreement. Greenpeace Aotearoa Executive Director Dr. Russel Norman characterized the government’s actions as a ‘race to the bottom’ regarding environmental regulation. If the European Commission upholds the complaint, New Zealand could face sanctions, including the potential loss of preferential access to European markets. ## Timeline ### 2026-09-29: New Zealand climate policy faces EU trade complaint Greenpeace and Both ENDS have filed a complaint with the EU alleging New Zealand is breaching climate commitments within their Free Trade Agreement, potentially risking trade access. 4 sources. https://clstr.news/cluster/new-zealand-climate-policy-faces-eu-trade-complaint ### 2026-09-29: New Zealand government seeks ways to meet 2031-35 emissions targets New Zealand officials admit the Emissions Trading Scheme cannot meet 2031-35 greenhouse gas targets alone, despite reporting a small buffer for the current 2030 budget. 2 sources. https://clstr.news/cluster/new-zealand-government-seeks-ways-to-meet-2031-35-emissions-targets --- Cite as: New Zealand climate policy and trade compliance. CLSTR, https://clstr.news/situations/new-zealand-climate-policy-and-trade-compliance