Emissions Reduction Plan: Christopher Luxon goes after big business, says corporates should cut emissions without Government support

Christopher Luxon has gone after big business, calling on corporates to "get on" with removing emissions themselves rather than "waiting around" for Government subsidies.

It comes after the Government on Monday released its Emissions Reduction Plan (ERP), which the National Party says is full of "mush" and "corporate welfare". The party supports the emissions budgets, but "we don't necessarily support the means" to get there, Luxon said on Tuesday.

"Our view is very clearly that the taxpayer shouldn't be subsidising big corporates to make emissions reductions. Big corporates should be able to do that right now. They need to get ahead and on with that programme, not wait for taxpayer money to subsidise them."

The Government doled out $2.9 billion on Monday toward initiatives within the ERP from the Climate Emergency Respond Fund (CERF), which is made up of revenue from the Emissions Trading Scheme (ETS). The ERP shows how the Government intends to cut emissions to reach the emissions budgets set out until 2035 on the way to net-zero by 2050.

"An everyday Kiwi going to the pump, contributing their 19 cents a litre into the ETS. That money shouldn't be taken off them and then put into an ETS thing and then delivered back to corporates," Luxon said.

"The message to corporates is very clear: get on and get removing emissions right now. They have got the financial capability to do so. They don't need to be waiting around wondering whether the Government is going to give them more subsidies."

Newshub asked Luxon to clarify if National was arguing against the support going to business.

"Yes, correct. There is no need for corporate welfare going on. We have an ETS scheme that sends messages and incentives very clearly to big businesses. I know that world well, I have come from that world."

Deputy leader Nicola Willis confirmed the party would present an alternative plan before the next election.

"We will meet these emission reduction targets and we will do that in a way that is efficient, fair and practical. We don't think the Government's plan does that."

Among the $2.9 billion doled out for ERP actions is $650 million over four years towards the Government Investment in Decarbonising Industry Fund (GIDI). GIDI sees the Government partner with process heat energy users to accelerate their business decarbonisation.

"Our clean and green reputation is an international draw card, but many businesses still use fossil fuels. Ensuring our businesses are run on, and produce products made with renewables will be critical to maintain our leading business edge," Energy and Resources Minister Megan Wood said on Monday.

"We're investing around $650 million over four years to massively increase the size of the funding available to the GIDI programme, which means we can expand the number and type of projects that receive money, including high impact decarbonisation projects of national significance.

Woods described it as a "huge win for our businesses who are looking at innovation to stay ahead of the curve". She said the original $69 million GIDI helped fund 53 major industrial decarbonisation projects. They're expected to be completed by April 2024 and will save 7.46 million tonnes of carbon dioxide over their lifetime - the equivalent of taking 134,800 cars off the road.

In 2019, the energy and industry sectors contributed about 27 percent of New Zealand's gross emissions. The actions in the sector laid out in the ERP would reduce emissions by an estimated 2.7 to 6.2 Mt of carbon dioxide equivalent.

National leader Christopher Luxon.
National leader Christopher Luxon. Photo credit: Newshub.

One sector not caught under the ETS is agriculture. The Government is currently working on an emissions pricing system with farmers through He Waka Eke Noa. The industry has until 2025 to come up with a solution or it will fall into the ETS, but even then, it would get a 95 percent discount.

On Monday, $339 million from CERF was given to the agriculture sector to investigate agricultural mitigation technologies. That was welcomed by farmers, but received criticism from the likes of Greenpeace, which said agriculture was receiving money from the ETS, despite not paying anything towards it. 

Asked on Tuesday why it was fine for New Zealanders to subsidise farmers, but not corporates, Luxon said he understood the point, but agricultural doesn't "have a natural technology pathway" to remove emissions.

"It does require us to invest in research and development to try and find those ways through. In doing so, we actually could lead the world. It could actually help the world solve its problems around agricultural emissions."

He said the industry is also trying to come up with solutions to deal with biogenic methane through He Waka Eke Noa. A report back on that is expected by the end of May. 

"So we need to let that run its course. I think the industry is taking that task very, very seriously in my conversations with those key stakeholders."