Latest news with #Kapuni
RNZ News
5 days ago
- Business
- RNZ News
Gas shortages force Taranaki business to temporarily close
A gas shortage could force a Taranaki business to shut down its fertiliser production plant for up to four months. Ballance Agri-Nutrients is warning if things dont improve, businesses maybe forced onto an energy roster, with rotating times for production. The Kapuni Plant uses gas to power their production and as a raw ingredient for fertiliser that is used by New Zealand farmers and growers. But a shortage of gas means the co-operative can't get a guaranteed supply and the prices quoted are up to 100% more than what they are currently paying. Chief Executive of Ballance Agri-Nutrients, Kelvin Wickham spoke to Lisa Owen. To embed this content on your own webpage, cut and paste the following: See terms of use.
RNZ News
23-06-2025
- Business
- RNZ News
Climate Minister says gas shortage will lower greenhouse emissions
Kapuni gas plant. Photo: RNZ / Robin Martin Climate Change Minister Simon Watts says the gas shortage will lower greenhouse gas emissions, but at a cost for businesses that can't switch to electricity. Supply from existing gas fields has plunged since the government published its Emissions Reduction Plan in December 2024. Watts was asked in a scrutiny hearing in front of the environment committee of MPs why the government's climate plan had put such heavy emphasis on capturing and storing carbon dioxide underground at Kapuni gas field, when the project was untested and its prospects were now looking dubious. Watts blamed the gas shortage - but said the shortage itself would lower carbon dioxide emissions. He said, compared with when the plan was written, "New Zealand has less gas than it thought". "Less gas that's available by virtue is less emissions, so in some ways there is an acceleration of the emissions reduction because we simply don't have that gas available," he said. "We are at critical levels in the context of low levels of gas. Some may say with a purely climate hat on, well that's good, there are no emissions and therefore they can't use it (gas)," Watts said. "But the reality is, in a manufacturing and industrial sense there are a number of businesses who either have an inability to transition to other sources ... or doing so is a significant fiscal cost and/or time horizon." Watts said the government was looking at ways to help those companies. "The good thing is, in the current environment there is an economic [and] commercial case to transition off gas because electricity is cheaper, and therefore the commercial imperative is driving that transition." "I'll take market intervention over government regulation any day." Watts said the government's assumptions regarding future gas use and the prospects of carbon capture at Kapuni would need to be reassessed and the results would published later this year. Carbon capture and storage (CCS) condenses carbon dioxide and stores it underground in reservoirs. Overseas, some high profile projects have been controversial because taxpayer funds for climate action were being paid to some of the planet's biggest emitters, fossil fuel companies, to capture and store just a tiny fraction of their pollution underground. Fully a third of the carbon savings needed to meet the government's legal obligations to cut emissions from 2025-2030 was supposed to come from carbon dioxide being stashed permanently underground at Taranaki's Kapuni gas field. But in May, Kapuni's owner Todd Energy told RNZ the project wasn't viable unless it received some kind of extra incentive or subsidy from the government. The scheme would earn carbon credits for every tonne of emissions stored, but Todd said the market price of carbon was too low to justify the investment. Simon Watts. Photo: RNZ / Samuel Rillstone At the scrutiny hearing, Watts was grilled by opposition MPs on whether Todd Energy had asked for direct subsidies from the government. Watts said he hadn't seen such a request, but Labour MP Deborah Russell presented him with an answer to a written question in Parliament, confirming Todd had asked for subsidies. Watts didn't directly answer Russell when she asked what the government's reply had been. He said in regards to support for industries "there's a number of aspects that remain under active consideration". Watts said the government was still committed to passing regulations allowing carbon capture and storage as "one tool in the toolbox" for lowering emissions. RNZ asked Todd to clarify what it had asked for. It said it had not asked the government for a direct subsidy for carbon capture and storage at Kapuni. But the company confirmed it wanted either co-investment, government underwriting or shared liability with the taxpayer for any future carbon leaks from the project. Todd has previously argued the government should treat carbon capture and storage facilities as infrastructure. "In our 2024 submission to MBIE (Ministry for Business Innovation and Employment) on the CCUS consultation, we did signal that government support - particularly in the form of risk-sharing or enabling mechanisms - would be essential for CCS to proceed in New Zealand," it said. "Particularly, we noted that New Zealand's declining gas reserves make the economics of CCS challenging and that 'for CCS to be effective, the government should consider sharing project risks and responsibilities. "It could be liability for leakage, particularly if the intent is to store third party CO2 in time. Due to challenging economics there is also financing risk that co-investment or a government underwrite could help to de-risk," said the company. Todd Energy had previously estimated the Kapuni field would have room for storing carbon dioxide produced by other companies, as well as its own. Earlier in the hearing, Watts was asked by National MP Grant McCallum about the risk of "emissions leakage" if New Zealand started lowering its methane emissions from farming. Emissions leakage refers to the risk of production moving overseas to get away from emissions pricing in its country of origin. Watts defended the necessity of meeting New Zealand's climate targets and international obligations. "You hear some on some corners saying, we're very small and insignificant," he said. "Every country, big or small, has a role to play in terms of reducing emissions and New Zealand is part of the Paris Agreement for that purpose. "In terms of adding up all the small and insignificant countries, it adds up to 40 per cent of global emissions," Watts said. "If we pull out, what signal does that send? There are three countries that are not part of the Paris Agreement, the USA and a number of other countries that most people probably have probably never heard of." [Those countries are Iran, Libya and Yemen . "Russia, China, India, they're all part of the Paris Agreement, and all the other countries we would look to - the only one is the US. "In regards to the implications on international trade, ... New Zealand has a reputation as a primary sector exporter of red meat, dairy and other products," he said. "Why would we put that at risk?"
RNZ News
27-05-2025
- Politics
- RNZ News
Climate solution all but buried before it begins
Photo: 123RF It is sold as a bold step into the future, a technological fix to one of the world's dirtiest problems. But is New Zealand's climate solution, its first carbon capture and storage (CCS) project, over before it begins? "Having read the submissions from the various companies on the government's regulatory plans, it just doesn't seem like it's going to happen in the next four and a half years before 2030," RNZ's climate correspondent Eloise Gibson tells The Detail . "Maybe after that, but I can't see it happening at a scale that's going to take the pressure off, in terms of having to cut our emissions. It's going to be one of the things in the Swiss army knife, I hope, but we are not going to be putting it out in the next couple of years." The CCS project - led by Todd Energy and backed by the government - aims to capture carbon dioxide from industrial processes and inject it deep underground in Taranaki, at the Kapuni gas field, locking it away for centuries. The start date has been pencilled in for around 2027, and from then until 2030 it is expected to store a million tonnes of CO₂, with a further almost million tonnes stored over the following five years. It is a big part of the government's broader plan to meet its legal obligations to cut emissions by 2030 - about a third of the carbon savings needed. But Gibson tells The Detail the project's future is now uncertain unless Todd Energy gets "more money or less liability or a combination [of both]". "There is a whole raft of things that have changed, one is the carbon price is low compared to other countries ... then there is the issue of the liability regime, so if there is a leak 15 years after you have filled up a field and closed it off, who is responsible for that ... so there is wrangling going on around the rules." Globally, CCS has a mixed track record. Some projects, like Norway's Sleipner, have stored CO₂ safely for decades. Others have failed spectacularly, costing billions and storing less than promised. New Zealand's unique geology - riddled with seismic faults - adds a layer of risk. And if CO₂ does leak, it could undo years of emissions gains and pose unknown threats to groundwater and ecosystems. Then there is the fear that CCS becomes a 'get-out-of-jail-free card' for polluters. But putting that aside, if the project does not go ahead in New Zealand, what replaces it, so the government can meet its emissions targets? "I approached the climate minister, and he did stress that the government takes an 'adaptive approach' with their emissions budget, which I guess means they can pivot if something doesn't pan out," Gibson says. "But given they have cut a bunch of Labour-era policies that could have given them about a million tonnes of savings - which is what they need if this falls over - they are not likely to start these up again and there's absolutely nothing on the table that I have seen that would fill that gap, that this government would support, so it does give them a problem." Ultimately, Gibson says she wants the government to use "everything in the toolbox". "I don't think this is a time to be ruling out solutions. But it's also not a time to be distracted by expensive solutions, when we have other stuff that we know works, right there." Check out how to listen to and follow The Detail here . You can also stay up-to-date by liking us on Facebook or following us on Twitter .
RNZ News
18-05-2025
- Business
- RNZ News
Carbon capture: Pivotal project for cutting greenhouse gas emissions looks shaky
The Kapuni Gas Treatment Plant. Photo: RNZ / Robin Martin A critical part of the government's plan for cutting greenhouse gas emissions over the next five years appears to have fallen over. A huge chunk of the government's climate success rests on a single project, which the owner now says probably won't happen because it doesn't stack up commercially. Fully a third of the carbon savings needed to meet the government's legal obligations to cut emissions from 2025-2030 was supposed to come from carbon dioxide being stashed permanently under the seafloor of Taranaki, at the Kapuni gas field. Kapuni's owner Todd Energy says the project's future is uncertain unless it gets some kind of extra incentive or subsidy from the government - something the government currently shows no signs of offering. Carbon capture and storage (CCS) condenses carbon dioxide and stores it underground in reservoirs - hopefully forever. Despite controversy over subsidies being handed to fossil fuel companies for CCS, and accusations of under-delivering, several muti-billion-dollar projects are underway overseas, with mixed success. Chevron's huge Gorgon facility in Australia badly underdelivered on what was promised , but other projects such as the smaller Moomba project got off to more promising starts . Kāpuni was expected to be New Zealand's first CCS project, starting around 2027. Todd Energy hoped to capture carbon dioxide right at the point where it was released as part of the process of extracting gas from the field, condense it and stash it, permanently, in the empty fossil fuel reservoirs that previously held the gas. There was also space at the field to store emissions from other polluters, Todd said, if it could be transported cost-effectively. Like Moomba, the project would involved reinjecting CO2 back into the same depleted reservoir long used for gas production, which Todd describes as low risk. Todd Energy told the government that with a January 2027 start-up date, up to 2.7 million tonnes of CO2 could be captured from the Kapuni field over the life of the project. Government officials were sufficiently convinced that CCS would start at Kapuni around 2027 that they included the project in their calculations underlying the government's Emissions Reduction Plan . That plan showed the government would just manage to meet its 2025-30 carbon budget, despite having slashed other carbon-saving policies such as clean energy subsidies and stronger emissions standards on car imports. Kapuni Gas Plant in south Taranaki. Photo: RNZ / Robin Martin Officials agreed Kapuni could be expected to store a million tonnes of CO2 between 2027 and 2030, and a further almost million tonnes over the five years after that. That was estimated by taking what Todd said was feasible, and reducing it by five percent for contingencies, the Ministry for Business Innovation and Employment told to RNZ. But getting any carbon capture at all in the next few years now looks doubtful. Government documents show Kapuni was the only project of its kind expected to be able to start operating before 2030, the government's next, big deadline for slashing emissions. Currently the government proposes CCS projects would generate carbon credits, the same way forestry owners do for planting trees. But Todd Energy says carbon prices of around $50 a tonne aren't enough to make the project stack up commercially, particularly now that gas yields from its fossil fuel fields are falling. It says its studies show the Kapuni field can offer long-term carbon sequestration. "However, the additional facilities required to capture the CO2 and compress it for injection are very expensive, which makes the commerciality of the project challenging," it says. "Unfortunately, this is likely to mean that by the time the necessary regulations are in place, the project may not be feasible without additional incentives. "Had a regulatory framework been in place five years ago, the commercial viability of the project would look quite different to where we are today or will be in three years' time," a spokesperson said by email. "While CCS is technically feasible and represents an option for reducing New Zealand's greenhouse gas emissions, the Kapuni project is not viable under the proposed legislative and regulatory framework." Simon Watts holds the Energy and Climate Change portfolios. Photo: RNZ / Samuel Rillstone RNZ asked Energy and Climate Change Minister Simon Watts where that left the government's emissions-cutting plans. Like Todd Energy, Watts declined to give an interview but answered questions by email. He said the government remained committed to meeting the next emissions budget but did not answer what else might fill the gap if carbon capture and storage fails. "Work on developing the Carbon Capture Storage regime is ongoing, and we expect to introduce legislation this year," Watts said. "In February this year, we confirmed our intention to reward businesses through the ETS. We are also developing ways for a CCS regime to enable the storage of third-party carbon dioxide. This would allow those storing CO2 to source carbon dioxide from other emitting activities and inject it alongside their own carbon dioxide into the storage site. This could allow and incentivise more carbon dioxide to be stored than the operators can currently," he said. "The second emissions reduction plan outlines an adaptive management approach. This means closely monitoring progress, so we can adjust if necessary to ensure we stay on track to meet our second emissions budget." Critics says CCS is a fossil fuel industry distraction from urgent efforts to stop emissions from being produced in the first place. Such projects are not expected to replace the need to radically cut emissions, but some experts say they could be helpful - even critical - to offset some emissions, particularly the final, most stubborn sources of carbon dioxide that needed to be neutralised to meet the planet's climate goals. David Dempsey has been conducting research on the issue. Photo: Supplied The University of Canterbury's David Dempsey is researching a similar but different process of capturing carbon dioxide directly from the air and storing it. He says trialling CCS could come in handy for that kind of project in future. "In an ideal world you wouldn't have to have a situation where you pulled CO2 out of the atmosphere and put it underground, but it's been clear over the past several decades that efforts to shift emissions have been quite stubborn," he said. "And there may be certain industries where it makes sense to offset certain emissions with storage. "You don't want to look at this stuff as a silver bullet for all emissions, rather to exist as part of a portfolio of approaches. It's very important for maybe a few niche applications but it's not going to solve all of your problems," he said. "One of the reasons I think carbon capture is worth doing is if we're doing to do a lot of carbon dioxide removal in the future, you need some experience with the concept of capturing CO2 and of storing it underground for long periods of time. "Some good candidates are depleted gas fields because we know these are good at containing fossil fuels for thousands of years." The government's proposed regime for allowing CCS would let companies such as Todd get paid in carbon credits under the Emissions Trading Scheme, just as forestry owners can earn carbon credits for storing carbon in trees. The credits can currently be sold for around $50 a tonne. But carbon prices are low by international standards. Todd Energy says that isn't enough, and capturing and storing the carbon is not economically feasible at today's carbon prices. Not helping matters is dwindling gas yields from fields such as Kapuni. "The current ETS carbon price is not high enough to justify a CCS project based on CO2 capture from the processing of natural gas at Kapuni," said the company. "The large capital investment required for CCS is relatively fixed, so the amount of gas processed though the facility will dictate the $/tonne needed to cover the initial investment. As gas reserves decline and there is less and less gas to process, the $/tonne price required is progressively increasing." Todd and other fossil fuel companies are interested in doing CCS also despite the liability regime for leaks after the project has ended. Regimes overseas typically make companies liable for any leaks for an initial period, with the government picking up the risk after that. Dempsey says a crucial element is having a plan so everyone knows who is responsible, when. "But we do need a plan for failure and any leaks that may occur." As for offering some other form of incentives, the government discussion documents show no hint of considering any kind of sweetener. "Overseas you've seen some situations where governments have chosen to invest in CCS they have seen and recognised that it is unlikely for companies to carry those costs themselves," Dempsey said. "I haven't seen anything in what the government has indicated here to say it is keen to offer that kind of incentive."
