Government ban on new coal boilers in place

Energy and Resources

The Government is delivering on its climate commitment to ban new coal boilers and to phase out by 2037, existing coal boilers, the Energy and Resources Minister Dr Megan Woods has announced.

The National Policy Statement and National Environmental Standards for greenhouse gas emissions from industrial process heat gives councils the muscle to tackle emissions produced by industrial process heat, which currently produce about eight per cent of Aotearoa New Zealand’s greenhouse gas emissions.

Energy and Resources Minister Dr Megan Woods says the Government’s decisions today will reduce emissions by about the same amount as 100,000 cars would produce in a year.

“Currently, more than half of the heat used to process raw materials into products such as paper and dairy production comes from fossil fuels,”

“Switching to cleaner ways of generating process heat presents a huge opportunity to reduce our domestic greenhouse gases and paves the way for greener export products too.

“It continues the Government’s momentum in reducing emissions and decarbonising industry, and delivers on a key Labour Party manifesto commitment,” Megan Woods said. 

The new policy follows the Government’s recent announcement of New Zealand’s biggest ever emissions reduction project, in partnership with NZ Steel, to introduce an electric arc furnace and reduce carbon emissions by 800,000 tonnes per year – the equivalent of 300,000 cars.

“Publishing the emissions reduction plan and expanding the Government Investment in Decarbonising Industry (GIDI) Fund last year, shows the Government is committed to reduced emissions, cleaner air, and more productive businesses,” Megan Woods said.

“The new national direction will ensure councils regulate process heat emissions in a nationally consistent way, accelerating New Zealand’s transition to a low emission, thriving, and sustainable economy.”

Editor’s notes:  

Official title: National Policy Statement and National Environmental Standards for Greenhouse Gas Emissions on Industrial Process Heat requires councils to factor in climate change impacts caused by industrial process heat when making resource consent decisions.

The national direction supports last November’s changes to the Resource Management Act, that allow greenhouse gas emissions to be considered in resource consenting decisions, including industrial process heat air discharge permits. 

The national direction will phase out existing low-to-medium temperature coal boilers by 2037 and ban the installation of new low-to-medium temperature industrial coal heating devices, from 27 July this year.

Under the new policy, resource consent will be needed for discharges of greenhouse gases from all fossil fuel heat devices generating 500 tonnes (or more) of carbon dioxide equivalent annually, per site. 

Developed by the Ministry for the Environment and Ministry of Business, Innovation and Employment (MBIE), the NPS and NES will be ready for councils to implement in the second half of 2023. The Energy Efficiency and Conservation Authority (EECA) is producing guidance to help councils and industrial emitters of greenhouse gases understand and implement the national direction.  

The NPS and NES only apply to fossil-fuel burning devices (such as coal boilers) that are used to generate thermal energy for industrial processes.   

The NPS and NES:  

  • introduce consenting requirements to reduce emissions from the use of fossil fuels in industrial process heat devices, including for boilers, furnaces, engines, or other combustion devices 
  • apply to fossil fuels as including coal, coke, diesel, liquid petroleum gas, natural gas, used tyres, oil, peat or plastics 
  • incentivise lower-emission alternatives for new process heat devices 
  • require consent applications for heat devices to have greenhouse gas emissions reductions plans 
  • require greenhouse gas emissions plans to be reviewed by qualified assessors for sites emitting above 2000 tonnes CO2-e per year
  • provide a framework for ongoing monitoring and compliance of industrial process heat emissions for use by resource consent holders and councils  
  • will apply to regional councils and unitary authorities responsible for managing air discharge under the Resource Management Act, and to all industries using fossil fuels in process heat devices that discharge greenhouse gases. 
  • accelerate New Zealand’s transition to a low-emissions, sustainable economy.  

The national direction does NOT cover:   

  • emissions from non-fossil fuels  
  • electricity generation  
  • heat devices used for commercial space and water heating. (These are partially covered by the Carbon Neutral Government Programme (CNGP) and the Ministry of Business, Employment and Innovation’s (MBIE) Building for Climate Change Programme devices under the consent threshold.)   

Back up devices used for planned maintenance or in emergencies for 400 hours or less per year are exempt from the regulations.  

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