New Zealanders are now confronting the most serious energy and fuel pressures in a generation. Diesel prices have surged to record levels, truck stops in several regions have already run dry, and questions are increasingly being raised about whether national fuel supplies will hold. Fertiliser importers are warning of tightening global markets, supply chains are under strain, and the latest price spikes are already feeding directly into the cost of living and inflation.
The Middle East crisis has not only disrupted global shipping routes and fuel flows; it has revealed just how dangerously exposed New Zealand has become. Unlike many countries, we entered this crisis having deliberately dismantled our refining capacity, constrained our gas supply, and imposed ideologically driven climate policies that deliberately increased energy costs throughout the economy. The end result is a country acutely vulnerable to global shocks.
With the consequences of governments prioritising climate activism over energy security now clear, the question that needs to be asked is whether New Zealand would be more resilient if we had not committed to the United Nations Paris Agreement.
The evidence strongly suggests we would.
To recap: the Paris Agreement sets New Zealand’s international climate commitments; the Zero Carbon Act converts them into domestic targets through five-year emissions budgets aimed at achieving net zero by 2050; and the Emissions Trading Scheme (ETS) puts a price on emissions of carbon dioxide (CO₂) in order to force the de-carbonisation of the energy sector through the phase out of fossil-fuelled thermal generation and the electrifying of transport and industrial heat.
New Zealand’s ETS is unusually broad based. While most countries only apply carbon pricing to large industrial emitters, our scheme was designed to cover the entire economy – driving up electricity prices, fuel prices, freight, food, manufacturing costs, and ultimately, household budgets.
By pricing CO₂ emissions from the gas and coal‑fired power stations needed to keep New Zealand’s lights on during dry years and periods with little sun or wind, the ETS guarantees that wholesale electricity prices will continue to rise – pushing up costs for households and businesses. And as more capital‑intensive wind and solar are added, the need for backup generation increases, driving electricity prices even higher.
With the Zero Carbon Act imposing legally binding emissions budgets that restrict economic activity regardless of market conditions or technological readiness, these two policies have created a cost structure that amplifies global shocks rather than cushioning them. Together they have driven the “deindustrialisation” of New Zealand – as energy‑intensive industries relocate offshore, pulp and paper mills close, and food processors scale back.
For exporters, the challenges are especially severe as they compete against producers in countries where carbon prices are lower, or non-existent, eroding competitiveness and squeezing margins.
The closure of the Marsden Point oil refinery in 2022 was the most consequential loss of all, leaving New Zealand totally dependent on imported refined fuels.
Marsden Point illustrates how the Ardern Government prioritised climate ideology and UN directives over energy security and the national interest.
Originally opened in 1962, the site near Whangarei was chosen for its deep‑water port, proximity to major North Island markets, and low earthquake risk. The “Think Big” expansion, completed in 1986, enabled the refinery to produce around 70 percent of New Zealand’s refined fuel needs from domestic and imported crude – including petrol, diesel, aviation fuel, kerosene, fuel oils, and bitumen.
When the Clark Labour Government ratified the UN’s Kyoto Protocol in 2003 and committed to reducing greenhouses gases, it entered into a 20-year Negotiated Greenhouse Agreement with the refinery. In exchange for an exemption from carbon charges, the refinery committed to an emissions-reduction pathway that included removing lead from petrol, supplying lower sulphur diesel, and reducing benzene in petrol.
As the Agreement’s expiry date approached and the refinery began negotiating its transition into the ETS, it became clear that significant carbon costs would be imposed.
With the Green Party Climate Minister James Shaw pushing to tighten industrial allocation rules, the Refining NZ Board warned that rising carbon charges would increase operating costs and threaten the refinery’s viability.
By 2020, the refinery was already under intense financial strain from collapsing global refining margins and rising domestic energy costs. Confidence in New Zealand’s long‑term energy security had been eroded by Jacinda Ardern’s “Captain’s Call” ban on offshore oil and gas exploration, and with the Zero Carbon Act signalling the wind‑down of fossil‑fuel infrastructure, Refining NZ advised the government that its climate policy settings had made ongoing refinery operations unsustainable.
When Cabinet rejected intervention on fuel‑security grounds, the refinery ceased operation, and in April 2022 converted into an import‑only terminal.
While the closure was described as a commercial decision, the destructive impact of the UN’s climate agenda is unmistakable: by facing rising carbon costs, tightening ETS settings, declining gas supply, and a decarbonisation pathway that offered fossil‑fuel infrastructure no future, the policy environment made long‑term refining untenable.
The economic fallout from this radical climate ideology was not confined to Marsden Point.
With the Zero Carbon Act’s binding emissions budgets constraining investment and increasing compliance costs – and the ETS raising the price of fuel, freight, and production across the entire economy – the cumulative effect has undermined energy security in New Zealand and driven de‑industrialisation as energy‑intensive industries close or relocate offshore.
What’s even worse is that the architecture that underpins this destructive climate ideology, is fundamentally flawed.
Let me explain.
New research shows that plant absorption of CO₂ from the atmosphere has been significantly underestimated in the climate models that underpin international policy.
A 2024 study by Cornell University and Oak Ridge National Laboratory published in Nature, found that plants absorb 31 percent more CO₂ through photosynthesis than previously estimated – as this week’s NZCPR Guest Commentator, long time New Zealand Climate Researcher Dr Richard Reaney, explains:
“Every so often, science gets a reminder that the natural world doesn’t bend to our models. The recent findings from Oak Ridge National Laboratory are one of those reminders. For years, we were told that plants absorb a certain, tidy amount of CO₂. Now we learn that figure was off by a wide margin – about 30%. That’s not a rounding error. That’s a sign we’ve been working with an incomplete picture.
“For decades, global CO₂ absorption was estimated using indirect signals: satellite greenness, atmospheric readings, and scattered ground measurements. Useful tools, but hardly precise. The new research used carbonyl sulphide – a gas plants absorb during photosynthesis and never release. It’s a cleaner, more honest indicator of what’s actually happening. And once scientists measured it properly, the truth was obvious: Earth’s vegetation is pulling far more CO₂ out of the air than we gave it credit for.”
Dr Reaney describes his recent research trip into the heart of the Borneo rainforest to measure CO₂ levels throughout the day: “The rainforest was literally ‘hovering’ CO₂ out of the atmosphere at an increased photosynthetic rate… A stronger natural carbon sink means the planet is more resilient than we thought. But it also means our climate models – the ones used to guide policy, investment, and public messaging – were built on shaky foundations.”
And that’s the point: the climate policies embedded in our legislative and regulatory framework – that are causing untold damage to our economy and way of life – are based on inaccurate assumptions. There’s no other conclusion that can be reached.
But it gets worse. Not only are CO₂ emissions overstated, so too are agricultural emissions.
New Zealand’s latest Greenhouse Gas Inventory reports gross national emissions of 76.4 million tonnes of CO₂-equivalent, with agriculture accounting for 53 percent. Under the standard GWP100 metric used in Paris Agreement accounting – which measures how much heat a greenhouse gas traps over 100 years compared with CO₂ – methane produced by livestock digestion is treated as trapping 27 to 30 times more heat.
However, because biogenic methane is short-lived, only remaining in the atmosphere for around 12 years, GWP100 significantly overstates its long-term warming impact. A more accurate metric GWP* has therefore been developed, which reduces the warming impact of stable livestock methane by roughly 75 percent – equivalent to a multiplier of four.
Applying both corrections – a 31 percent reduction in reported CO₂ and a 75 percent reduction in biogenic methane – New Zealand’s gross emissions would fall to around 40 million tonnes, and the need to de-industrialise our economy would evaporate.
Instead of accounting for a miniscule 0.15 percent of global greenhouse gas emissions, New Zealand’s share would fall to an infinitesimal 0.07 percent.
On a per capita basis, New Zealand would shift from appearing to be a relatively high emitter of greenhouse gases to one of the cleanest and greenest developed nations in the world. This corrected view would properly recognise our highly efficient pastoral farmers, who produce some of the lowest emissions per kilogram of milk and meat anywhere on the planet. It would highlight agriculture as a genuine national strength – demonstrating that we feed the world with unmatched efficiency, while maintaining one of the cleanest electricity systems amongst developed nations.
But here’s the catch. While New Zealand and others might lobby the UN to update Paris Agreement metrics and correct the data, there’s no guarantee they’ll agree. That means inflated targets will continue to dominate climate policy – undermining energy security and driving up costs across the economy – unless the Coalition acts decisively in the national interest.
To their credit, they’ve already been moving in this direction: In 2024, they reversed Labour’s plan to bring agriculture into the ETS, and in 2025, they took on-farm emissions pricing “off the table”, in recognition that future reductions will come from technology and productivity gains.
However, the on-going pressure on our economy from the ETS remains. By driving up wholesale power prices, increasing fuel and fertiliser costs, and contributing to the closure of energy-intensive industries – including Marsden Point – the ETS is undermining energy security at a time when we most need affordable, reliable energy to support industry and households. That’s why it must go.
China offers a practical model for how a major Paris Agreement party can pursue its national interests while remaining fully signed up. Beijing continues to build large-scale coal-fired power stations on the explicit grounds of energy security, grid stability to support intermittent renewables, and the need to sustain rapid economic and industrial growth. Its Nationally Determined Contributions (NDC) focus on carbon intensity and technology-led progress rather than absolute emission volumes.
If concerns that New Zealand exiting the Paris Agreement would compromise trade are genuine, we could follow China’s pragmatic path: remain a party to the Agreement, state our corrected figures, scrap the ETS, and submit a revised NDC that prioritises energy security, food security, and economic growth while pursuing lower emissions through technology and efficiency.
Such a move would demonstrate the Coalition is prioritising the national interest – just as our largest trading partner already does.
Finally, if Jacinda Ardern had put the national interest ahead of climate ideology and allowed the refinery’s exemption from carbon charges to continue, it’s possible it would still be operating today. If that were the case, New Zealand would have the added security of at least 350 million litres of stable crude oil stored in the tanks that are sitting empty – on top of the current holding of 300 million litres of refined fuel, with its relatively short shelf life of 6 months for petrol, 6 to 12 months for diesel, and 12 to 24 months for jet fuel.
The current global fuel crisis should be a wake‑up call. New Zealand cannot afford to repeat the mistakes that have left us exposed: dismantling critical infrastructure, constraining domestic energy supply, and subordinating national security to international climate orthodoxy. Energy security is not optional. It’s the foundation of economic strength, social stability, and national resilience. If we are to protect our industries, our households, and our sovereignty, future governments must put fuel and energy security first — unequivocally and unapologetically — in the national interest.
Please note: To register for our free weekly newsletter please click HERE.
THIS WEEK’S POLL ASKS:
*Should the ETS be scrapped?
No comments:
Post a Comment
Thank you for joining the discussion. Breaking Views welcomes respectful contributions that enrich the debate. Please ensure your comments are not defamatory, derogatory or disruptive. We appreciate your cooperation.