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Thursday 17 June 2021

Emissions transition could cost food processing up to $200m annually

10th June 2021 By Paul Yandall | | @foodtickernz

Transitioning to greener energy will cost the food processing industry about $200m a year by 2035 if New Zealand is to reach its 2050 net zero emissions goal, says the Climate Change Commission.

Coal boilers should be phased out by 2037, says the CCC. Image: 123rf

In its long-awaited final report to the government released on Wednesday, the Commission said the food processing sector needed to transition away from using coal, fossil gas and diesel to biomass and electric heat by 2040.

The Commission said coal boilers in the food processing industry were already being replaced with biomass and electricity and that conversion needed to proceed at a steady but “reasonably rapid” rate.

“About 30% of the country’s coal demand in 2019 was used in food processing,” the Commission said.

“This is roughly 20 PJ (petajolues). Meeting emissions budgets and targets requires a reduction in the use of coal in boilers of around 1.4 PJ per year.”

“This is a substantial amount, roughly equivalent to the energy used by one or two very large dairy processing factories.” 

The Commission said coal boilers in the food processing industry were already being replaced with biomass and electricity and they should be phased out completely by 2037 to reach the 2050 target.

But the transition to greener energy would lead “to costs on the order of $200m per year by 2035, largely due to higher fuel costs”. 

“This is because, unlike for EVs or space and water heating, conversion to a biomass or electrode boiler means using a more expensive fuel without any significant energy efficiency gain.” 

“Again, this does not include the effect of further efficiency improvements assumed in the demonstration path, through measures such as improved heat recovery and heat pump integration. 

“These would lead to significant fuel savings and could reduce overall costs, but there is uncertainty around the installation costs which are likely to be highly site-specific.”

The Commission’s modelling assumed “improvements in energy efficiency across the food processing sector, averaging 1.1% per year”.

As well as emissions from food processing, New Zealand’s food and fibre sector needed to reduce on-farm biogenic methane and nitrous oxide emissions, as well as carbon dioxide emissions from transport.

“Pasture-based agriculture in Aotearoa has one of the lowest emissions footprints in the world,” the Commission said.

“There is good reason to believe that production in Aotearoa will be competitive in a low-emissions future where meat and dairy products are still consumed.

“However, delayed action could affect the country’s trading position and businesses could lose market access as global markets increasingly seek low-emissions goods and synthetic proteins.” 

There was potential for changing land-use from pastoral farming to horticulture and arable, the Commission said.

“Land-use change to horticulture could increase the number of available jobs as horticulture is more intensive and generally requires more workers per hectare. 

“However, many horticultural jobs are seasonal and as a result the sector experiences labour shortages. There are also opportunities for new jobs in food processing, for example in the proposed oat milk plant in Southland.”

The government has until the end of the year to respond to the final Climate Change Commission report, which can be read at



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