New Zealand has announced its largest emissions reduction project in history, transitioning from coal to renewable electricity at the country’s major steel plant in a move that the government says is equivalent to taking 300,000 cars off the road.
The government will spend $140m on halving the coal used at Glenbrook steel plant to recycle scrap steel, replacing that generating power with an electric-powered furnace. The plant will contribute $160m to the project’s cost.
Currently, the steel company accounts for 2% of New Zealand’s total emissions, through intensive burning of coal to melt down iron-rich sands into steel products. The new project will install a $300m electric-powered arc furnace to melt down scrap steel instead. That electricity will be provided by renewable energy through New Zealand’s national grid, which is primarily powered by wind, hydro and geothermal energy.
Prime minister Chris Hipkins said the project “dwarfs anything we have done to date”.
“This size of this project demonstrates how serious the government is about reducing New Zealand’s emissions as fast as possible,” he said. “Alone, it will eliminate 1% of the country’s total annual emissions.”
The government says the plan will reduce New Zealand’s emissions by 800,000 tonnes annually. That is equivalent to removing the entire automobile fleet of Christchurch, one of New Zealand’s largest cities, from the road.
“To understand the scale of this project, it reduces more emissions on its own than all the other 66 [government-funded emissions-reduction] projects we have approved to date,” Megan Woods, minister of energy and resources said. The electric-powered furnace is due to be running by 2026-7.
Climate change expert prof James Renwick, of Victoria University, told the Guardian the project was “very significant” and “big news” for the country’s emissions goals. “It will be the biggest single reduction in national emissions when it comes into play,” he said. Still, Renwick added, there was “more work to do”.
“1% is of national emissions is great, but we need to reduce 100%,” he said. “We need to do a lot more work.”
The plan “will put New Zealand in a much better position to meet its climate target of net zero carbon by 2050,” climate minister James Shaw said.
The plan marks a significant step in New Zealand actually reducing its greenhouse gas emissions – as opposed to buying offsets of tree-planting to reach net zero.
In April, the Climate Commission warned that the country’s heavy reliance on planting trees to offset carbon pollution threatened to torpedo its ambitious plans to reach net zero emissions by 2050. Achieving a net reduction in emissions primarily through planting trees is impossible to sustain in the long term, experts have warned, as forests could be destroyed though fire or extreme weather and do not store carbon for ever.
While New Zealand’s total contribution to global emissions is small, its gross emissions per capita are high. According to 2018 data, New Zealanders produce greenhouse gases equivalent to the heating power of 16.9 tonnes of carbon dioxide — more than double the per capita rate of the UK. The country has also been among the world’s worst performers on emission increases.
“We can’t plant our way out of the problem of climate change,” Renwick said. “We need be focusing on gross emissions reduction rather than net.”
Shaw said the deal was estimated to contribute 5.3% of the emissions reductions needed under New Zealand’s second emissions budget, which covers the period of 2026-2030, and 3.4% within the third emissions budget, of 2031-2035.