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‘The Flame’s Not Going Out’
A gas transition plan towards low-emissions fuels, such as bioenergy and hydrogen, is among the energy targets in the government’s 348-page Emissions Reduction Plan, released in May.
Rather than banning new gas connections, the government has signalled its preference to repurpose existing gas infrastructure for low-carbon gases in its Emissions Reduction Plan (ERP), released mid-May alongside the first emissions budget.
The ERP considers bioenergy as significant for reducing emissions, with widespread potential application in the energy, industry and transport sectors.
Green hydrogen will also be significant for reducing emissions in areas of the economy that are hard to electrify, such as hightemperature industrial processes, and potentially in some parts of the heavy transport sector, including aviation.
“The Emission Reduction Plan’s investment in a hydrogen roadmap, expansion of Government’s Decarbonising Industry Fund and in infrastructure, allowing most houses to have kerbside food waste collection by 2030, is great news for Aotearoa,” said GasNZ Chief Executive Janet Carson on the Plan’s release in mid-May.
“Last year, we started Future Sure to ensure New Zealanders saw the potential of gas as part of a green future. Our main message was the flame’s not going out, it’s going green. And it is!”
Carson believes that separating food scraps before entering the landfill will make local biogas facilities more attractive.
“Projects already underway, like the plant recycling food wastes into biogas at Reporoa, are evidence of how close we are to getting biogases in our pipeline.
“We already have the luxury of gas infrastructure—a network of pipelines, connections and appliance infrastructure in place—let’s use that for biogas, hydrogen gas and renewable LPG.”
A roadmap for hydrogen in New Zealand is to be developed by 2023.
A gas transition plan is to be developed by the end of 2023.
Where the money’s coming from
BusinessNZ Energy Council says the government aims to make its climate spending ‘fiscally neutral’, meaning it will only spend revenues from the Emissions Trading Scheme rather than borrowing to fund new climate infrastructure or measures to reduce emissions.
The first spending of the Climate Emergency Response Fund (CERF) was announced on the same day as the release of the Emission Reduction Plan (ERP).
CERF is established with $4.5b from Emissions Trading Scheme (ETS) revenue, with an initial allocation of $2.9b over four years invested in emissions reductions—which sits outside the $6b new spending allowance announced under the budget announcement.
Of the $2.9b, $1.17b will be spent in the first two years—most of it to: convert industrial coal boilers fund efforts to encourage a transport mode shift reduce emissions from waste pay for tech R&D to reduce agricultural emissions contribute to funding of low public transport usage during Covid.
THE FIRST THREE EMISSIONS BUDGETS TAKE US TO 2035
First Budget Now-2026 290mt – 72mt per year Second Budget 2026-2030* 305mt – 61mt per year Third Budget 2031-2035* 240mt – 48mt per year
*Set only in principle.
ERP key actions: energy & industry
The ERP relies heavily on the involvement of businesses, who will need to assess their practices, including manufacturing, travel choices and more. BusinessNZ Energy Council will draw on the
JANET CARSON
Chief Executive, GasNZ (representing the LPG and Gas Associations of New Zealand)
2022 TIMES model of New Zealand’s energy system to assess the likely impacts of the ERP on businesses, but in the meantime has provided businesses with the key ERP actions and funding.
For the energy and industry sector, they are: $652m for co-investment to decarbonise industry over the next 4 years (the spend on decarbonising process heat in the first 3 years is $482.2m) $5m to strengthen Power Purchase Agreements $18m to develop an energy strategy, hydrogen roadmap and regulation for offshore renewables between 2022-2024
Continued funding of various EECA funding programmes
Energy targets of 50% renewable energy consumption by 2035 and monitoring progress towards the government’s aspirational target of 100% renewable electricity by 2030
Review current hydrogen regulatory settings to ensure they are fit for purpose for new hydrogen technologies and consistent with international best practice
Investigate need for an implementation of additional market mechanisms and regulation to support affordable and reliable electricity supply, while accelerating the transition to a highly renewable electricity system
Develop action plan for decarbonising the industrial sector 2022-24
Finalise Advanced Manufacturing Industry Transformation Plan
Implement national direction for industrial GHG emissions
Develop a mandatory energy and emissions reporting scheme
Implement a gas transition plan
Update the NZ Energy Efficiency & Conservation Strategy
Protect New Zealanders from global energy price spikes in the long term
End reliance on coal with a ban on new low-to-medium temperature coal boilers and phase out existing ones by 2037.
A table of all actions listed in the Emission Reduction Plan can be found at www.environment.govt.nz/assets/publications/Files/AotearoaNew-Zealands-first-emissions-reduction-plan-Table-of-actions.pdf