29 March 2009
MEDIA STATEMENT

Bioenergy Association of New Zealand says complementary mechanisms are required for a successful and effective ETS

Following the Government’s call for submissions to the Emissions Trading Scheme Review Select Committee the Bioenergy Association of New Zealand (BANZ) made its submission indicating its support for the development of an Emission Trading Scheme (ETS) provided that there are other complementary mechanisms, and provided that the ETS is structured to provide business with long-term surety of policy on which to base planning decisions.

BANZ Executive Officer, Brian Cox said, ‘Bioenergy can also contribute significantly towards achieving the goals of the ETS and the Kyoto agreement. The strategies that the Government develops must foster the widest use of a fuel resource like Bioenergy that is plentiful and sustainable.

BANZ believes that the ETS alone – as a ‘stick’ mechanism – will not be effective in helping New Zealand to realise the multiple benefits that bioenergy can deliver. Complimentary ‘carrot’ mechanisms are also essential to achieving greater uptake.’

Mr Cox outlined the main three mechanisms favoured by BANZ:

• A Contestable Capital Grant System - Given the current scarcity of capital, the most effective complimentary mechanism would be a beefed-up contestable capital grant system, similar to the Wood Energy Programme. This scheme is already being administered by EECA with an expert industry panel of advisors, and will run out of funds very soon. This Wood Energy Programme provides a ready-made conduit through which more funds could easily and quickly be channelled to stimulate energy infrastructure projects and create jobs. The current cap of $200,000 per project needs to be raised significantly.

• Roll out more Pilot Schemes – The roll-out of more Pilot Schemes, similar to the Renewable Heating for Schools programme run by EECA, are an excellent way to get real projects out into the communities. Similar Pilot schemes at Hospitals, Prisons, Swimming Pools etc. would be a major stimulus to encourage other wood energy projects, providing sustainable local jobs and a boost to the local forest industry. EECA already has the team in place and the in-house expertise to quickly roll-out further pilot schemes

• Accelerated depreciation - Accelerated depreciation provisions for renewable energy investment to encourage their uptake.

Mr Cox added, “BANZ also believes that the ETS should contain specific provisions to facilitate initiatives to increase the amount of forestry and to grow fuel crops, on marginal or previously forested land, to provide fuels that can displace coal and gas usage, and provide a raw material for future development of ethanol and other second-generation products.”

BANZ indicates in its submission that with the right mix of policies, significant penetration of biomass fuels, displacing hydrocarbons, can be achieved using partial Government finance to overcome the private sectors reluctance to invest at this time, thereby unlocking significantly more private finance to fund such infrastructure projects. This would deliver construction-related jobs as well as ongoing jobs in the wood fuel supply chain in local communities.

BANZ says that with the right blend of the ETS and complimentary schemes, New Zealand has the natural resource and expertise to put together its own New Green Deal to use this time of economic crises to begin the transition to a more robust, lower carbon and lower cost economy.

Mr Rob Mallinson, Chairman of BANZ, said, “Bioenergy offers multiple benefits to the New Zealand economy such as regional and sustainable job creation, energy resilience, a healthier forestry industry, more carbon sequestration, lower embodied carbon in New Zealand exports, a lower cost base for New Zealand organisations etc. As an industry, we look forward to being able to work with the Government to make these opportunities a reality in particular in the current financial climate.”

Notes to Editors

The Bioenergy Association of New Zealand (BANZ) was established in 2001 to promote and coordinate the development of a bioenergy industry in New Zealand. BANZ provides a central focus point for liaison with Government agencies, the dissemination of information amongst the industry and long-term positioning of bioenergy into New Zealand's energy system. Members include anyone with a commercial interest in bioenergy - sawmillers, wood processors, energy suppliers, energy researchers, consultants, manufacturers and investors.

ENDS

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