Fonterra will tell MPs on Tuesday afternoon that the Government's revised emissions trading scheme has a glaring hole.
New Zealand's largest company will say it stands to miss out on free allocations of emissions credits which were supposed to be intended for companies just like itself.
The revised scheme gives free credits to large companies to shield them from costs which could make them uncompetitive.
But Fonterra, which accounts for a quarter of New Zealand's exports, says the design of the scheme will cause it to miss out.
The company will tell the Finance and Expenditure Select Committee that current eligibility thresholds will preclude Fonterra from receiving an allocation for its manufacturing emissions.
It will say this will expose the New Zealand dairy industry to punitive costs, resulting in economic activity moving overseas.
Climate Change Minister Nick Smith says he has not read the Fonterra submission, but will consider it along with others in due course.
