The emissions trading scheme will cost the fishing industry about $30 million a year, the Seafood Industry Council (SeaFIC) told the select committee reviewing the scheme yesterday.
That estimate, based on a carbon price of $30 a tonne, would be equivalent to 40 per cent of its operating surplus beforeinterest, tax and depreciation, it said.
Fishing vessels burn a lot of fossil fuel.
In a last-minute change to the legislation passed late last year, they are to get a free allocation of units to cover 50 per cent of their emissions but only for three years.
SeaFIC chief executive Owen Simons said it should receive the same degree of grandfathering as the smokestack sector, 90 per cent for the next 10 years.
SeaFIC policy analyst Tom Clark said, "Under international law if we don't fish the exclusive economic zone, someone else does. I'd be more concerned about maintaining sustainable fisheries in that case."
Talley's Group managing director Peter Talley said foreign vessels under charter in New Zealand accounted for 60 per cent of the fish caught in New Zealand waters.
Yet they were treated as outside the New Zealand tax regime, Talley said, paying no PAYE or ACC levies, no GST and no fuel tax.
But Greens co-leader Jeanette Fitzsimons questioned how they could avoid the impost as it would be paid by the oil companies supplying the fuel, which were expected to pass it on to all their customers.
