[As published in May/June BayBuzz magazine.]
In looking at New Zealand’s response to climate change, it’s instructive to compare the actions of the Government to some of our biggest corporate players.
Alongside all other nations, the NZ Government is responsible for setting the country’s official emissions reduction target – the Nationally Determined Contribution (NDC) – a procedure established under the original Paris Agreement.
As I reported last issue, Climate Minister Simon Watts set the NZ commitment at reducing emissions to 51-55% below 2005 levels, which is only 1-5% above the current NDC of a 50% cut by 2030. A bad joke.
Advice from the NZ Climate Commission was that emissions could be cut 66% without constraining our economy, putting NZ more in the range of other nations.
While our Government is treading water on climate, major NZ business enterprises are moving forward.
Fonterra
Take for example, Fonterra, which some might find surprising. But as NZ’s leading exporter, Fonterra competes in the global marketplace and is alert to the expectations of the real-world. Those expectations – demands actually – include sustainable, traceable food production practices.
So, Fonterra will be paying its dairy suppliers a premium for low emissions production, while the likes of Federated Farmers shrieks in the ear of a captive Coalition Government about emissions reductions wrecking the farm economy.
From 1 June Fonterra’s farmers will be eligible for payments of 1c-5c a kilogram of milk solids if they meet certain emissions criteria – 5,000 farms are estimated to be eligible for the payment. In addition, suppliers with the lowest emissions will receive an incentive payment of 10c-25c a kilogram – about 300-350 farms are expected to be eligible.
And where is the funding for these incentive payments coming from? Fonterra’s customers Mars and Nestle!
Announcing Fonterra’s latest financial results, CEO Miles Hurrell commented: “We believe that long term there is value to be had in following those customers that are growing on the back of their own sustainability credentials.”
This is the real-world speaking … and setting the future terms of trade.
Let’s look at another real-world example in New Zealand.
Genesis Energy
This involves another familiar corporate, Genesis Energy, NZ’s largest electricity and natural gas retailer … and one that on occasions of peak demand and/or periods of low hydro and wind must burn a heap of coal. In FY24, due to a shortage of hydro and wind generation, Genesis needed to burn coal that produced 1.2 million tonnes of CO2 emissions more than the previous year.
The resultant electricity price spike shut down Winstone Pulp, a customer worth 7-8% of Napier Port’s export earnings.
Genesis CEO Malcolm Johns wants to replace that coal use with biomass. “Under our new strategy Genesis is pursuing biomass at some speed, investing in a dedicated team to deliver real outcomes at volume,” he says. Specifically, use 300,000 tonnes of biomass fuel to replace its coal generation by 2028.
So, Genesis recently signed a MOU with Hastings-based company, Carbona (an offshoot of Polytechnik), to build a facility that will turn woody biomass into high-energy ‘torrefied’ pellets.
Torrefaction is a proven technology for super-heating wood (and other biomass) in a low-oxygen environment, removing moisture and volatile compounds, producing a dry, energy-dense product referred to as torrefied biomass. The process itself generates the energy to meet its own energy requirements, so it’s carbon neutral.
Genesis has trialled the process already at smaller scale and is now looking to scale up with Carbona. The Central North Island plant to get this started will be one of the biggest in the world.
Carbona’s David McGregor estimates the NZ market for industrial use of substitute torrefied pellets is 800,000 tonnes per year. But to Carbona, this is just the starting point. Other major NZ user industries, including dairy, meat, steel and cement – all needing to address electricity prices and emissions footprints – would readily lift the domestic market to around 1.5 million tonnes, which is ample scale. Internationally, the market would be in the tens of millions.
In a forest-rich region like Hawke’s Bay, Carbona is confident they could stand up an economically viable plant fuelled by 180,000 tonnes of wood waste. Recent analysis indicates that waste supply is readily available in the region (600,000 tonnes).
Torrefied biomass produced in Hawke’s Bay could be used as a gas substitute for industrial boilers locally or for export, either to the South Island (substituting for coal) or overseas … a prospect Napier Port might find enticing.
HB Climate Action Joint Committee
While the corporate world forges ahead on climate action, and NZ’s central government drags its heels, our HB councils spin their wheels.
BayBuzz has complained repeatedly about lack of action from the region’s Climate Action Joint Committee. Some of its participants seem to agree.
Deputy Mayor Annette Brosnan led the charge on Napier City Council’s recent withdrawal from the Joint Committee. She referred to that committee’s “history of underachievement”, adding: “Instead of waiting on a committee that has struggled to deliver meaningful outcomes, Napier should be taking ownership of its climate future, elevating reporting and climate importance, focusing resources where they will have the greatest impact.” And in fact, NCC does have an impressive climate action plan.
Subsequently, the Wairoa District Council also resolved to withdraw from the committee.
Mayor Craig Little commented: “While our Council has committed to continue to collaborate on regional climate action initiatives, we also need to focus on Wairoa specifically and are pursuing offers around how we can achieve this, which includes less cost and more up-to-date information.
“HBRC is the regional unitary authority and should be doing the work of the Climate Action Joint Committee, in discussion with the Hawke’s Bay councils.”
In the aftermath HBRC Chair Hinewai Ormsby and colleagues kicked the matter to touch until after the October election, announcing: “The Mayors of the region and I discussed that it makes sense to continue to the end of the term to complete particularly the Climate Change Risk Assessment report and its engagement with our communities across the region, and that any changes to the Committee and its work can be set in the new triennium.”
I agree with Mayor Little, HBRC should do the heavy lifting on planning the regional strategy, conferring along the way with other councils on how their internal work is progressing and what their role in the regional plan should be.
And yes, the climate crisis will still be here in October.
BayBuzz energy and climate reporting is sponsored by Unison in support of independent local journalism. Any editorial views expressed are exclusively those of BayBuzz. Unison is not associated with those opinions.
