NZ's biggest greenhouse gas emitters and their struggle to pollute less

Thursday, 25 July 2019

Just 10 companies are responsible for more than half of New Zealand's total greenhouse gas emissions. (Video first published in July 2019)

A few large companies are responsible for the majority of New Zealand's greenhouse gas emissions. Who are they and what hope is there that they can do what's required to make the country carbon neutral? Joel MacManus and Anuja Nadkarni report.

Every year, New Zealand pumps out 80 million tonnes of greenhouse gases into the atmosphere.

Currently, just 30 per cent of that is offset by carbon-gobbling forestry. Within three decades, the country is supposed to be offsetting 100 per cent of its emissions. That represents a huge gap to be closed in relatively short order.

Despite the very clear net zero emissions target, the question of who exactly is responsible for closing the gap is fuzzy.

There is no publicly available register to show who our top emitting companies are or how much they are emitting.

* Greenhouse gas emissions have barely budged in a decade

* NZ's total greenhouse gas emissions

* New government accounts show value of NZ environment, and human impact

In fact, under the Climate Change Response Act, the exact emission levels of any company which participates in the Emissions Trading Scheme are considered confidential and can't be released by the Environmental Protection Agency.

By trawling company reports, Emissions Trading Scheme documents, and international carbon disclosure files, Stuff was able to tally the annual emissions for 10 companies which are likely to be the highest emitters in New Zealand.

Many are household names, though others, like Methanex and Bluescope Steel, are less well-known.

Combined, they produced an estimated 54.5 million tonnes of greenhouse gases, roughly two-thirds of the national total.

These are imperfect figures, given the lack of consistency across businesses, and this is not a definitive list.

Figures were sourced from the most recent available data, which is inconsistent between companies. Companies also report their emissions in different ways - some only report direct emissions as a result of manufacturing, while others include the entire supply chain.

This means some of the reported figures may differ from the methods used to compile New Zealand's overall emissions profile.

Some companies - including Z Energy and Fonterra, which are believed to be the two largest emitters - proactively include emissions in their annual reports. But this is far from universal.

Fonterra’s global emissions across its supply chain was 22.2 million tonnes. The bulk of those emissions (89 per cent) were produced on-farm, mostly coming from methane produced by cattle.

In many cases, emissions data is simply not available anywhere, or only tells part of the story.

For example, Z Energy reported just over 13m tonnes of emissions in 2018, but when Stuff asked BP for its New Zealand emissions, it reported just 4200 tonnes. BP was only counting the emissions from powering its stores, car washes, and offices. It wasn't including any emissions from the burning of the millions of litres of petrol it sold.

Figures reported to the Carbon Disclosure Project in 2016 by BP's global arm showed the purchase of nearly 4.5m tonnes of carbon offsets under the New Zealand Emissions Trading Scheme, giving a stronger indication of how much of an impact the British company has in New Zealand.

This lack of transparency is especially common among multinationals operating in New Zealand.

Methanex, the Canadian company which produces methanol at three Taranaki plants, and the UK-Australian Rio Tinto, which owns the Tiwai Point aluminium smelter in Southland, both declined to answer questions directly. Bluescope Steel, the Australian company that owns the Glenbrook Steel Mill in Waiuku, failed to respond to multiple requests for comment.

THE REDUCTION PROBLEM

The question of who our top emitters are is only part of the question. The trickier problem is how to make meaningful change.

Many of the companies profiled, even those with good intentions, were struggling with how to reduce emissions when their business models are built on high-emissions practices.

Energy companies like Genesis and Contact Energy have been able to move away from coal by investing more in wind power and other renewable sources, but that kind of transition isn't always possible.

For petrol retailers, making meaningful change to their emissions profile without simply shutting down or completely reforming their central business model is essentially impossible in the short term.

Z Energy has made emissions reductions in its international shipping and electrified its corporate fleet, but its overall emissions have still more than doubled in the last five years due to an increase in market share and its acquisition of Caltex.

When BP was asked what it has done in New Zealand specifically to reduce emissions, it gave examples including recycling its rubbish and allowing customers to take home used coffee grinds for their gardens.

Some, however, have found ways to eke out emissions savings without impacting business.

The Tiwai Point Aluminium Smelter, owned by Rio Tinto, is still one of New Zealand's largest emitters, but has fallen outside the top 10 as a result of introducing new low carbon smelting processes, which halved emissions without seriously impacting production.

Fonterra’s global emissions across its supply chain was 22.2 million tonnes.

Fonterra has high hopes for new research which suggests different food sources could make a major difference to the amount of methane cows produce. A Penn State study this year suggested that a red seaweed food additive could reduce methane emissions by as much as 80 per cent.

Four companies; Air New Zealand, Z Energy, Contact, and Genesis, recently partnered in Dryland Carbon, a forestry portfolio intended to produce a stable supply of carbon credits

WHO ARE OUR TOP EMITTERS?

We asked some of New Zealand's most carbon-intensive firms what they are doing to bring down emissions and help New Zealand hit net zero by 2050.

Fonterra

How much greenhouse gas (GHG) did Fonterra produce last year?

Fonterra's global emissions across its supply chain was 22.2 million tonnes of CO2-equivalent gases. The bulk of those emissions (89 per cent) were produced on-farm, mostly coming from methane produced by cattle. Ten per cent of its emissions came from manufacturing plants, with coal powering a third of their sites. Distribution accounted for the final 1 per cent.

What is Fonterra doing to reduce its GHG footprint?

Z Energy’s chief executive Mike Bennetts helped set up the Climate Leader’s Coalition, which sees firms publicly reporting on their emissions and committing to reducing them.

Fonterra has set a target of reducing emissions by 30 per cent by 2030, and has made some marginal progress, cutting on-farm emissions by about 4 per cent over the last three years.

The dairy cooperative has also been divesting from coal and announced last week it would stop installing any more new coal boilers. It has also committed to reducing water use by 20 per cent at factories by 2020; creating farm environment plans for every Fonterra farmer by 2025; 100 per cent recyclable, reusable and compostable packaging by 2025; and powering its Stirling site in Otago with electricity rather than coal.

What technological advances could help Fonterra lower its emissions?

Fonterra has set a lofty target of a net zero carbon footprint by 2050, something which likely is only going to be possible with significant carbon offsetting.

When asked what future innovation could potentially help lower their emissions, Fonterra pointed towards government-funded research into different food sources for cattle which potentially produce lower methane emissions.

Z Energy

How much GHG did Z Energy produce last year?

To reduce its emissions, BP says it offers coffee grinds from Wild Bean cafes to customers to use in their gardens.

The fuel company produced 13 million tonnes of CO2-e last year. This is up from just 6m tCO2-e in 2016, though this was driven by an increase in market share due to the acquisition of Caltex and a supply agreement with Pak'n Save Fuel, rather than any decrease in efficiency.

What is Z Energy doing to reduce its GHG footprint?

Z Energy reduced its emissions by reducing electricity use through LED lighting across its network, installing a recycling network and building New Zealand's first commercial-scale sustainable bio-diesel plant. Sustainability commitments are also embedded in their supply contracts to hold key suppliers to the same standards.

Z Energy's chief executive Mike Bennetts helped found the Climate Leaders Coalition, which now has over 100 signatories, and covers a group of the most carbon-intensive firms in New Zealand committing to keep warming below the Paris target.

What technological advances could help Z Energy lower its emissions?

Z Energy says advances in both hydrogen and battery technology will provide opportunities for all companies in transport and mobility. The company is continuing work on New Zealand's first commercial-scale bio-diesel plant and working with Air New Zealand, Scion and Refining New Zealand to explore the potential of bio-jet.

ExxonMobil says it has has invested more than $9b globally to develop and deploy higher-efficiency and lower-emission energy solutions.

How much GHG did BP produce last year?

The most recent verifiable figures show BP reported 4.4 million tonnes CO2-e to the Emissions Trading Scheme for the 2016 year.

What is BP doing to reduce its emissions?

When asked what BP was doing in New Zealand to reduce emissions, the company pointed to: a coffee grind composting programme; two rapid electric vehicle chargers; solar panels in at 10 per cent of BP Connect locations and LED lighting in all stores; recycling of waste and water used in car washes.

What technological advances could help BP lower emissions?

Globally, BP had made some advances in cleaner oil refining processes, products with slightly better fuel economy, such as BP Ultimate Diesel which is claimed to improve fuel economy 3.8 per cent. The company also invested in subsidiaries developing solar power and bio-fuel.

Air New Zealand flies about 17m people around the world every year, and in 2018 it produced 3.58m tonnes of emissions.

BP has several subsidiaries in renewable fields. Lightsource BP is now the largest solar developer in Europe, and has invested $30m into Fulcrum Biojet to develop low-carbon jet fuel.

ExxonMobil

How much GHG did ExxonMobil produce in NZ last year?

ExxonMobil reported 4 million tonnes CO2-e, according to the Emissions Trading Scheme for 2016.

What is ExxonMobil doing to reduce its emissions?

Mobil country manager Andrew McNaught says the company has worked with the Energy Efficiency and Conservation Authority to develop methods to reduce energy usage at Mobil-owned service stations, though he did not specify further.

What technological advances could help ExxonMobil lower its emissions?

ExxonMobil says the company invested $9b globally to develop and deploy higher-efficiency and lower-emission fuels. This includes the Synergy family of fuels, which can increase fuel economy by around 2 per cent.

Air New Zealand

Genesis, the largest electricity and gas retailer in the country, produced two million tonnes of emissions last year.

How much GHG did Air New Zealand produce last year?

Last year Air New Zealand reported producing 3.58 million tonnes CO2-e. International jet fuel made up 2.4m tCO2-e of that.

What is Air New Zealand doing to reduce its GHG footprint?

It is focused on reducing fuel use and emissions within operations through a fuel-efficient fleet. New aircraft like Dreamliners and ATR turbo-props are 20 per cent more fuel efficient than the aircraft they're replacing.

Air NZ says it has improved its fuel efficiency by 20 per cent since 2009 by having efficient flight paths, departure climb profiles and active aircraft weight reduction. Its vehicle fleet is all electric, and is now moving airport ground service equipment such as loaders and push back tugs to electric models too.

What technological advances could help Air New Zealand lower its emissions?

Last year, Air NZ signed separate agreements with both Zephyr Airworks and aircraft manufacturer ATR to work on bringing electric air taxis and electric aircraft to New Zealand.

Hybrid aircraft are expected to enter the market in the next decade or so, and depending on when these technologies become available for larger turbo-prop aircraft, Air NZ thinks there is potential for these to be a viable option for its regional network.

Along with Z, Refining NZ, SCION and Auckland International Airport, Air NZ is looking to transition aviation fuel into biofuel.

Methanex is New Zealand's only methanol manufacturer, with three production facilities providing the capacity to produce up to 2.4m tonnes of methanol annually.

Genesis Energy

How much GHG did Genesis produce in NZ last year?

The emissions from electricity generation for 2018 were 2.1 million tonnes CO2-e, though Genesis says that figure will likely be higher for 2019, as a result of fuel shortages requiring the back up of coal. This coal generation, which all retailers are dependent on, is provided by the Rankine units at Huntly.

Genesis runs eight hydro electric plants, plus one wind farm, two gas turbines and one gas/coal turbine.

What is Genesis doing to reduce its emissions?

The new Waverley Wind Farm, which begins construction next year, will see 31 wind turbines built in Taranaki. Genesis has agreed to buy all the power the farm generates for the next 20 years. Waverley Wind Farm is expected to add 450GWh of renewable electricity to New Zealand's energy mix from 2021 and will enable the displacement of around 250,000 tonnes of carbon from thermal generation.

What is Genesis doing to offset its emissions?

Contact Energy produced 1.5m tonnes of emissions.

Genesis recently partnered to create Dryland Carbon, a partnership that will see the company invest in a forestry portfolio to sequester carbon. The intention of this partnership is to create a stable supply of carbon credits from forestry into the future.

What technological advances could help Genesis lower emissions?

Genesis says it is exploring investment in hydrogen, as well as existing technologies like wind and solar.

Methanex

How much GHG did Methanex produce last year?

Methanex is the only manufacturer of methanol in New Zealand. It has three plants in Taranaki and about 95 per cent of the methanol produced is exported to the Asia Pacific region.

In New Zealand, Methanex produced 1.6 million tonnes of CO2-e last year.

Fletcher Building reported carbon emissions of 1.4m tonnes for 2018, which included its New Zealand, Australian and South Pacific operations.

What is Methanex doing to reduce its emissions?

Between 1994 to 2018, Methanex cut emissions by 36 per cent due to older plants closing and newer plants with improved catalysts opening.

What technological advances could help you lower emissions?

Methanex says its CO2 emissions intensity has decreased over time due to newer technology and higher efficiency at its plants and vessel fleet.

Contact Energy

How much GHG did Contact Energy produce in NZ last year?

Contact operates two hydroelectric power plants, two gas plants, five geothermal, and one diesel. Its annual emissions are 1.5m tonnes of CO2-e.

What is Contact Energy doing to reduce its emissions?

Eighty per cent of its power is generated from renewable sources. Contact is set to begin drilling four new exploratory wells on the Tauhara geothermal field near Taupō, as part of a programme to plan for a new renewable geothermal power station that may be progressed in 2020.

Contact recently acquired a 49.9 per cent shareholding in Simply Energy, a specialist Wellington-based electricity solutions business to help commercial and industrial customers reduce their carbon footprint and accelerate decarbonisation strategy.

What technological advances could help Contact Energy lower emissions?

Contact says it ran a pilot with 13 customers in the lower North Island this year for their 'demand flexibility platform' — technology that enables the company to pay big customers to reduce power use at peak times.

Fletcher Building

How much GHG did Fletcher Building produce in NZ last year?

Fletcher Building reported externally audited carbon emissions of 1.4m tonnes of CO2-e for 2018, which included its New Zealand, Australian and South Pacific operations.

Golden Bay Cement is the largest contributor to Fletcher Building's emissions at around 700,000 tonnes of carbon per year from its manufacturing plant in Portland, Northland.

What is Fletcher Building doing to reduce its emissions?

Fletcher Building says its cement production has 20 per cent lower CO2 emissions than competitors who import it from overseas.

What technological advances could help Fletcher Building lower emissions?

Fletcher Building is currently in the process of adding old car tyres to the fuel mix used in its plants. While not really a low emissions option, burning tires does have a slightly lower carbon impact than coal power.

Fletcher Building says the big challenge is that two thirds of its emissions come from the process of converting limestone into cement rock (or clinker), rather than from coal use, transport or electricity. It is investigating whether it can blend in 20 per cent of an alternative cement material which could reduce emissions by a further 20 per cent.

Bluescope Steel

How much GHG did Bluescope Steel produce in NZ last year?

Bluescope Steel, which operates the Glenbrook Steel Mill, refused multiple requests for comment and did not provide emissions figures for this story.

In 2014, estimates put the total emissions of the New Zealand steel industry somewhere between 1.6 and 1.8 million tonnes.

In 2017, New Zealand Steel was awarded over 1.4 million tonnes in free Emissions Trading Scheme units. That was the largest industrial subsidy given to any business, at a value of more than $20 million.

What is Bluescope Steel doing to reduce its emissions?

60 per cent of power required to run the mill is sourced from off-gases and waste heat from the ironmaking process, but Glenbrook Steel Mill still lags behind international standards in terms of environmentally friendly steel mills.

Glenbrook emits 2.5 tonnes of CO2-e per tonne of steel produced. A common international benchmark is 2 tonnes of CO2-e per tonne of steel.

What technological advances could help Bluescope Steel lower emissions?

In a submission to the Productivity Commission, Bluescope said there was currently no technology anywhere in the world that allows for steel to be made from raw materials without coal, but that when there was, they would be happy to use it provided it was not so expensive that it would be uncommercial.