How our steel production is being greened (thanks to $140m of greasing from the GIDI fund)
Hello – is anyone home?
We asked, earlier today, because Point of Order visited the Beehive website and, to our bemusement, found no new announcements had been posted in the previous 24 hours or so.
This suggested ministers were out on the hustings, doing their desperate bit to get Labour re-elected and preserve their jobs, rather than getting on with governing.
But just before noon Energy Minister Megan Wood burst into life to bring us up to speed on the goodies being generated by a programme – it’s fair to call it a trough – called the Government Investment in Decarbonising Industry (GIDI).
Then came news of an appointment to the Environment Court.
Then came news of an appointment to the Environment Court.
Latest from the Beehive
8 SEPTEMBER 2023
Christchurch barrister Kelvin Reid has been appointed as a Judge of the Environment Court and the District Court, Attorney-General David Parker announced today.
New Zealand is on track to have greener steel as soon as 2026 with New Zealand Steel’s electric arc furnace project reaching a major milestone today.
The Government Investment in Decarbonising Industry fund was introduced in 2020 to ramp up the decarbonisation of our industrial process heat while stimulating the post-pandemic economic recovery to create and protect jobs.
It enables partnerships between Government and businesses to accelerate emission reductions by supporting energy efficiency and fuel switching projects.
The $650m expansion of the fund in Budget 2022, with lots of lolly from the Climate Emergency Response Fund, is described by the government as a key initiative to help deliver on its Emissions Reduction Plan.
Today Megan Woods is enthusing about the consequences of a conditional partnership with New Zealand Steel – announced in May – whereby half of the coal being used at the Glenbrook steel mill would be replaced with electricity to recycle and reuse scrap steel.
A feasibility study has been completed on the viability, risk, expected costs and other outcomes, and the project has the full green light from New Zealand Steel.
This project will eliminate 1 per cent of the country’s total annual emissions “and deliver huge benefits for our environment, our industry and to New Zealanders,” Woods said.
“There has been rigorous due diligence on the project, which has been a critical process before New Zealand Steel fully embarks on its journey to decarbonise its activities while maintaining onshore steel production.”
Production using the new furnace is expected to start as early as mid-2026, in line with agreed commissioning milestones.
The Climate Change Minister James Shaw says the installation of an electric arc furnace at Glenbrook means New Zealand Steel will cut its emissions by more than 45 per cent.
The emissions reductions will be equivalent to keeping approximately 300,000 cars off the road.
“Once commissioned, the completed project will reduce Glenbrook’s carbon footprint by 800,000 tonnes per annum. That means 100% of its annual steel production will be lower carbon from day one,” said James Shaw.
The deal is being part funded with up to $140 million from the GIDI Fund. The balance of the $300 million project will be funded directly by New Zealand Steel.
The Beehive buglers are blaring this news as significant in meeting the climate change challenge.
Let’s hear more from Megan Woods:
“The project getting off the ground adds real momentum in pushing fossil fuels out of the energy system and lowering emissions through renewables and energy efficiency,” she said.
“We’ve come a long way in the last three years GIDI has been operating with 30 of the 81 process heat focused projects complete or in commissioning.
“This deal was the first in a number of bespoke opportunities that the government has been exploring, to deliberately target appropriate support for New Zealand’s largest emitters where the greatest emissions reductions can occur quickly.”
A second large partnership deal was announced in July with Fonterra to cut coal use at its dairy factories and support a 50% reduction in the company’s manufacturing emissions by 2030 – increasing the existing target of 30%.
Point of Order is a blog focused on politics and the economy run by veteran newspaper reporters Bob Edlin and Ian Templeton
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