Source: BusinessNZ
A new report is calling on all political parties to support a transition away from gas for commercial and industrial users, in the face of significant gas price increases and rapidly declining domestic production.
The BusinessNZ Energy Council (BEC) today released The need for Government assistance in the gas transition, which recommends Government explore concessionary loans for businesses to invest in new energy sources. (ref. https://bec.org.nz/category/resources/ )
Director of Advocacy Catherine Beard says it’s not a market failure.
“Successive governments have pursued a net-zero goal without a workable transition plan that keeps businesses and jobs intact. At the same time, BusinessNZ and BEC aren’t asking for open-ended subsidies or uncompetitive firms to be propped up. We want to see sharp, policy-driven transition in a way that protects jobs, production, and New Zealand’s economic base.”
Beard says New Zealand is already seeing de-industrialisation of manufacturers where the high cost of gas is adding to their struggle to remain competitive and profitable.
“The increased cost shock is making survival difficult for small and large businesses including manufacturers without some sort of transitional help.”
Businesses affected include critical sectors such as petrochemicals, fertilisers, manufacturing, wood processing, dairy processing, meat works and aluminium recycling. Alongside industrial gas users there are thousands of commercial users that are just as reliant, including bakeries, coffee roasters, greenhouses, breweries, restaurants, chocolate makers, hospitals, drycleaners, schools and wineries.
Beard says that combined these operations are estimated to generate $18-24 billion in GDP and support around 264,000 direct jobs.
“While Government has invested $200m to de-risk investment in new oil and gas exploration on the supply side, it is yet to support demand.
“There’s no point in having a surplus of energy supply in the future if there is no industry left to use it. Governments in Australia, the UK, the EU, Canada and Japan are mitigating these kinds of risks through various support mechanisms for industry to transition to renewables. New Zealand must follow suit.
“The alternative is avoidable closures, lost capability, and higher long-term costs to the economy.”
The latest BEC report, The need for Government assistance in the gas transition, is available on the website now: https://bec.org.nz/category/resources/
The BusinessNZ Network including BusinessNZ, EMA, Business Central and Business South, represents and provides services to thousands of businesses, small and large, throughout New Zealand.
