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(Bloomberg) — The New Zealand government and the local unit of BlueScope Steel Ltd. 300 million New Zealand dollars ($188 million) to modernize a factory near Auckland in what they described as the country’s largest emissions reduction project.
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Under the plan, the government will provide up to NZ$140m and New Zealand Steel NZ$160m to replace the oxygen furnace at the Glenbrook steelworks with an electric arc furnace and two of the four coal-fired furnaces, according to Sunday’s data. This will halve the coal used at the site.
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“This project dwarfs anything we have done so far,” said Prime Minister Chris Hipkins. “It will eliminate 1% of the country’s total annual emissions.”
NZ Steel chief executive Robin Davies said Glenbrook’s carbon footprint would be reduced by 800,000 tonnes – the equivalent of taking around 300,000 cars off the road.
New Zealand’s performance in tackling global warming has been mixed, with the climate action tracker rating the country’s policies “extremely inadequate” to meet the targets of the Paris agreement. The Climate Change Performance Index, a monitoring tool produced by a consortium of German non-profit organisations, ranks New Zealand 33rd in the world for climate action, or “average performer”.
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Sunday’s announcement is expected to meet more than 5% of the country’s required emissions reductions between 2026 and 2030.
New Zealand will hold an election in October, and Hipkins’ Labor Party is taking on the opposition National Party in what is expected to be a tight race.
Hipkins aims to secure the future of the domestic steel industry with the deal, and said it means companies will have access to clean, domestically produced steel “and protected high-value jobs that would otherwise be taken offshore.”
Mark Vasella, CEO of BlueScope, agreed. “This model would bring New Zealand as close to self-sufficiency as possible by using renewable energy to recycle domestic scrap steel, rather than shipping it overseas.”
