The government has banned cheap, third world country emissions units from New Zealand's emissions trading scheme and the business sector says the move is going to cost money.
Climate Change Minister Nick Smith says the units some countries earn create "perverse incentives" that do not benefit the environment.
They come from the destruction of industrial plants that create greenhouse gas emissions and the process can generate even more.
Dr Smith says the European Union and Australia are going to ban the units and he wants to maintain the integrity of New Zealand's ETS.
Under the ETS, gas emitters have to buy credits on an international market from countries or companies that are reducing theirs.
BusinessNZ says the ban means New Zealand companies are going to have to buy higher priced units and the cost will be passed on.
"Just because the EU and Australia have made the decision doesn't mean it is right for New Zealand to follow," chief executive Phil O'Reilly said.
"The EU has a whole different set of motives and New Zealand is already well ahead of the game with more than 70 percent renewable energy and businesses operating at world-best carbon intensity practice," he said.
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