Most coal boilers would need to go by 2037 under Government plan

Thursday, 8 April 2021

More than 30 Extinction Rebellion activists blocked access to the Bathurst Resources Canterbury coal mine in September to protest against a planned expansion (video first published February 2021).

Businesses will be banned from installing new coal boilers after the end of this year and will need to phase out existing ones by 2037, though both with some exceptions, under a Government proposal.

The proposed ban would apply to low and medium temperature coal boilers which are commonly used for tasks such as drying wood and milk powder, and for heating in horticulture.

The use of high temperature coil boilers – for example in steel and chemical production – would continue to be allowed as there can be few alternatives.

The ban would also not apply to the country’s largest coal consumer, Genesis Energy, which burns coal at its Huntly power station to produce electricity.

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Some of the options being consulted on by the Government would appear to also allow the continued use of small, lower-heat coal-fired boilers, but these do not appear to be the Government’s preferred option.

One of the obstacles to removing coal boilers can be the lack of high-powered electricity lines to some industrial and agricultural sites.

Dairy giant Fonterra, which is a major coal user, has supported the idea of a ban and last week said it intended to stop using coal boilers by 2037, which would align it with the Government's proposal.

But some smaller food producers had reported more concern about the potential impacts in the run-up to the Government’s announcement on Thursday.

Tomatoes NZ general manager Helen Barnes said it had yet to study the proposal.

Coal boilers are often used to heat greenhouses that are used to produce fruit and vegetables.

“We have been doing a lot of work to try to understand the best path forward for our growers and I think growers accept there is a need to change.

“But there just isn’t an easy option right now, so it is about the speed of transition,” she said.

Energy Minister Megan Woods said the proposed rules would make “a real difference” to New Zealand’s carbon emissions.

“The amount of coal displaced by these proposals equates to about 500,000 tonnes each year.

“Once the changes are fully in place it will mean the equivalent of between 400,000 to 550,000 cars being removed from our roads in a single year,” she said.

McCain Foods New Zealand in Timaru will receive just under $3m from a Government fund to help give coal the boot.

National Party climate change spokesperson Stuart Smith said the proposal was premature, coming ahead of the finalisation of the Climate Change Commission’s draft emissions reduction plan.

”The commission received more than 10,000 submissions on its draft advice and we would have expected the Government to respect the process they established by allowing the commission time to read and consider some of those views,” he said.

The party’s energy spokeswoman Barbara Kuriger said a ban could lead to unintended consequences.

“Coal and gas boilers are used by crop, meat and dairy producers and there are fears a ban could lead to food shortages if it goes ahead without alternative energy sources in place,” she said.

Among the most common alternatives to coal-fired boilers are to instead use electricity – at industrial sites that have sufficiently high-powered grid connections – or to install boilers that burn waste wood.

First Gas hopes to make piped “green” hydrogen a viable alternative for many industrial users from 2035.

Greenpeace climate and energy campaigner Amanda Larsson “cautiously approved” the Government’s proposal saying it took the country “one step closer to being the clean, green nation that so many New Zealanders want us to be'.

But she expressed disappointment it would take 15 years “to phase out dirty fuels from the industrial sector completely”.

“To protect New Zealanders from the impacts of climate change, the Government must phase out all coal, gas and diesel by 2030,” she said.

Coal Action Network Aotearoa said it was concerned some of the options being consulted on “left the door wide open” to businesses using to gas as a replacement for coal.

Spokeswoman Cindy Baxter said Fonterra had stated in a submission to the Climate Change Commission that it “wanted to switch to gas while it phases out coal”, but once gas leaks were taken into account, there was little difference environmentally,” she said.

But a Fonterra spokeswoman said the lobby group had “not got it quite right”.

“We’re not switching to gas while we move out of coal, but rather continuing to use gas where we already are while we move off coal.”

Fonterra chief operating officer Fraser Whineray said its commitment to stop using coal by 2037 was contingent on “a reliable supply of gas while we do this”, but noted its recent investments in boilers that instead burnt wood waste.

The Government also announced 14 companies would receive almost $23 million from its Decarbonising Industry Fund to help them move away from fossil fuels.

“Whilst New Zealand already has the lowest carbon footprint among major milk producers around the world, more can and is being done,” he said.

The largest grant of just over $4m will go to Nelson-based grower J S Ewers to help pay for shade screens and a “biomass boiler” to heat greenhouses.

The next largest grant of $3.6m will go to Timaru-based WoolWorks to help it switch to electricity for process heat.