Government partners with more industrial users to lower emissionsEnergy and Resources
New Zealand’s primary industry sector is making huge strides in reducing its reliance on fossil fuels and cutting carbon emissions in partnership with Government.
Minister of Energy and Resources, Dr Megan Woods, has today announced support for 17 industrial energy users to help them stop using fossil fuels faster through the Government Investment in Decarbonising Industry (GIDI) Fund.
“We are seeing some of the country’s largest food processors and manufacturers, like Alliance and Open Country Dairy, make further commitments on multiple, large decarbonisation projects at the same time,” Megan Woods said.
“There is real momentum building in pushing fossil fuels out of the energy system and lowering emissions through renewables and energy efficiency. We’ve come a long way in the last three years GIDI has been operating.
“Aside from our large partnership agreements with NZ Steel and Fonterra, this is the largest allocation of GIDI: Industrial funding to date. Businesses from one end of New Zealand to the other are stepping up to the challenge of lowering their emissions.
“The projects announced today will reduce carbon emissions by 67,300 tonnes each year, which is equal to taking approximately 25,000 cars off the road. That’s a great result for the environment and helping us meet our climate goals,” Megan Woods said.
“New Zealanders and export markets want lower-carbon products and services, and GIDI support is helping them switch sooner to low emission options, proving again that businesses don’t have to deindustrialise, to decarbonise.
Dr Woods got a first-hand look at operations this week at Rainbow Park Nurseries, which will receive co-funding for technology to generate heat from electricity instead of natural gas, reducing their overall energy-related emissions by 1,191 tonnes CO2 e annually.
“Thanks to GIDI co-funding, we have successfully initiated the key parts of our decarbonisation plan,” said Andrew Tayler, director of Rainbow Park Nurseries.
“This will allow us to transition away from using gas, providing us with long-term certainty on energy costs, and puts us in a position to refocus our teams’ efforts on growing plants and trees for Kiwis to enjoy.”
Rainbow Park Nurseries is home to one of the country’s most technologically advanced nurseries with a team of around 70 professional horticulturalists who work around the clock to monitor and care for the plants. The family business, founded in 1975, supplies over 1.5 million plants to retailers across the country from a 15-hectare nursery in Ramarama.
“Businesses have a variety of competing priorities, yet this emissions reduction work can’t wait until 2050 or even 2030. We need to get the wheels in motion now – especially in high impact areas like industrial energy use,” said Woods.
Climate Change Minister James Shaw said the deal was another important step forward for the sector.
"It's great to see businesses across New Zealand, from Northland to Otago, and Southland. showing what can be done, to put New Zealand in a better position to reach net zero by 2050.
This is about accelerating action, in a way that will also make the sector more resilient. But we cannot be complacent. We must radically reduce our reliance on fossil fuels, in order to avoid the worst of climate crisis,” James Shaw said.
Recipients from Round 5 come from sectors including sawmilling, meat, milk, beverage and food product manufacturing, dry-cleaning and commercial laundry, nurseries, mining and textile and hygiene services.
Round 5 of GIDI commits $33.3 million in government investment through and leverages private funding of over $62 million.
Steve Barden, Alsco Group General Manager, also a Round 5 recipient, commented, “EECA’s support and GIDI co-funding has allowed us to accelerate the removal of coal as a fuel source from Christchurch and the wider South Island by almost 10 years.”
“This means we can reduce our total carbon emissions by almost 48% and support our 11,000 business customers in their own supply chain decarbonisation.”
Funding rounds for GIDI: Industrial have now been replaced with an always on model. Businesses are now encouraged to apply for funding as soon as they are ready.
Notes for editors:
- The Government Investment in Decarbonising Industry (GIDI) Fund focusses on investing in, and promoting, cleaner industrial processes and process heat. This is achieved through energy efficiency, applying new and innovative technologies, and fuel switching.
- GIDI: Industrial is administered by EECA (the Energy Efficiency and Conservation Authority). It is open to businesses who reduce existing emissions through demand reduction or by choosing a renewable option over business as usual, with up to 50% of the cost difference available as a grant for projects.
- This now allocates five rounds of GIDI: Industrial co-funding – across 81 significant industrial decarbonisation projects – all set for completion by December 2027. As a result of these projects an anticipated annual carbon abatement of 456,653 tonnes of CO2 will be realised.
- The GIDI programme is expected to deliver projects that will make up around one sixth or 17 percent of our total emissions reductions planned between 2022 and 2025, and around one third or 35 percent of our emissions reductions planned between 2025 and 2030. This is achieved through energy efficiency, applying new and innovative technologies, and fuel switching.
- The full list of GIDI: Industrial recipients from Round 5 can be seen here: Approved GIDI projects | EECA
- Regions across New Zealand benefiting from GIDI co-funding, include Auckland, Canterbury, Gisborne, Manawatu-Whanganui, Northland, Otago, and Southland.
- The first four GIDI Rounds co-invested more than $78.8 million on decarbonisation projects across New Zealand.
- The $1billion GIDI Fund has five parts, including GIDI Industrial with applicants needing to meet set assessment criteria rather than being in competition. Funding rounds will be open to application at any time and decisions made regularly throughout the year.
- The GIDI suite includes:
- Projects must significantly reduce existing emissions from process heat, and applicants must demonstrate that they could not proceed at all, as early, or with as much impact, without government support.
- GIDI Private Finance provides potential GIDI applicants with information and funding about participating finance providers who offer advantageous rates and terms for decarbonisation projects.