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Heat system process. Photo: EECA.

The Government is helping even more of New Zealand's biggest industrial players slash their emissions faster, with one of the Government’s biggest hitters when it comes to supporting decarbonisation, Minister of Energy and Resources, Dr Megan Woods announced today.

“In partnering with the private sector through the third round of the Government Investment in Decarbonising Industry Fund we’re helping to clean up production processes, and helping business stay ahead of the curve,” says Woods.

“We know New Zealanders want to see lower-carbon products and services, and the proactivity these businesses are showing makes good business sense as well as being better for the environment, so we all stand to benefit.

“The businesses we’re supporting involve some of New Zealand's biggest industrial companies, which are central to our economy and food production systems, and in some cases what we consume every day.

“This third round of GIDI will achieve annual emissions reductions equivalent to taking 14,400 cars off the road,” says Woods.

Today’s announcement was made at Southern Paprika Limited, one of New Zealand’s largest capsicum growers, and a GIDI round three recipient. Southern Paprika is set to install a biomass boiler and CO2 recovery unit – understood to be a New Zealand first – replacing natural gas, a common but high-emitting source of energy. The project will reduce emissions by 70 per cent by replacing 70 per cent of the processed heat requirement with a renewable energy source.

“The Fund is about encouraging innovation and supporting early adopters of technologies that can be replicated by others,” says Woods.

“Process heat used mainly by business for industrial processes, such as manufacturing, and processing primary products, like milk drying, makes up over a quarter of this country’s energy-related emissions.

The Government Investment in Decarbonising Industry (GIDI) Fund is administered by EECA - the Energy Efficiency and Conservation Authority -  and focusses on investing in, and promoting, cleaner industrial processes and process heat. This is achieved through energy efficiency, applying new and innovative technologies, and fuel switching.

Over three rounds, $69m of GIDI funding has been allocated – across 53 major industrial decarbonisation projects – all contracted for completion by April 2024. As a result of these 53 projects an anticipated annual carbon abatement of 364,127 t of CO2, and a lifetime carbon abatement of 7.46Mt of CO2, will be realised.

Applicants were selected for their ability to demonstrate high value for money, a detailed broader carbon reduction plan, and the ability to complete the project within the specified timeframe.

Recipients across all rounds come from sectors including dairy processing, construction, metal manufacturing, indoor covered cropping, meat and seafood processing and textile, and leather manufacturing.

The GIDI Fund has committed $69 million to 53 projects since it began - as part of the government’s Covid Response and Recovery Fund.

“The GIDI Fund is already making a tangible difference to the total greenhouse gases we generate, and it’s great to see regions right across the country benefiting, including Southland, Otago, Canterbury, West Coast, Nelson, Hawke’s Bay, Bay of Plenty, and Auckland,” says Woods.

Climate Change Minister James Shaw says today’s announcement joins a growing list of Government actions to cut emissions and limit warming.

“Very soon we will release the Government’s first Emissions Reduction Plan, which will be full of initiatives to drive down emissions across every sector of the economy.

“In ten or twenty years’ time the world will be a very different place. But investments like these show we can move now to secure our part in it, and ensure the Aotearoa of the future is carbon-zero and climate-friendly, with fairness and opportunities for all,” says Shaw.

Third round projects also include:

The funding commitment follows the successful allocation of two previous GIDI rounds announced in April and September 2021.

“Projects from the first two GIDI rounds are tracking well. It’s encouraging that so many private sector organisations are partnering with government on this – the projects will help us move towards our Emissions Reduction goals and net-zero target,” says Woods.

“This is further proof that the Government is delivering on a key election commitment to tackle climate change and helping to create jobs in the clean energy sector. This is about future-proofing our planet and our economy, which is especially vital as we continue our solid economic recovery from Covid-19.”

Annual emissions saving (tonnes CO2e)

Lifetime emissions saving (tonnes CO2e)

Equivalent cars off the road

Total project incremental capital cost ($)

Marginal abatement cost to Government ($ per tonne)

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