Coal is used for much more than just electricity generation

New Zealand coal is used for much more than just electricity generation

Straterra, New Zealand’s minerals sector industry organization, has welcomed Energy Minister Megan Woods comment on TVNZ’s Q and A on Sunday that the government has no plans to end coal mining in New Zealand, particularly in light of government’s recent decision to ban all offshore exploration for oil and gas which sent shock waves through the business community.

“As well as providing jobs and contributing to economic development in regional New Zealand, coal plays an important part in New Zealand’s export reliant economy,” Straterra CEO Chris Baker said today.

“We note that the government has committed to phasing coal out of electricity generation by 2030, as have the electricity generators themselves. However, there is much more to coal in New Zealand than the role it plays in generating electricity in the Huntly power station.

“New Zealand exports coking coal from the West Coast. This business provides jobs, much needed export revenue and does not contribute to New Zealand’s carbon emissions account.

“Coking coal is an essential input in the manufacture of steel. While an increasing amount of steel is being recycled, there is currently no technology to make steel, at scale, without using coal. New Zealand coking coal has certain special qualities and is in high demand internationally. If we don’t supply our coking coal, customers will purchase elsewhere, often from producers with lower environmental standards. That means the steel will still be manufactured, there would be no net gain for the global environment but West Coast jobs would be lost. No winners there!

“The same basic argument applies to the Government’s recent decision to ban offshore oil and gas exploration.

“Coal also plays an important role in producing heat for industrial processes. Much of New Zealand’s export economy (including agriculture and steel) has grown on the back of New Zealand’s comparative advantage in energy. Without cost effective energy, production costs for many of our exports would be higher and New Zealand less competitive in the international markets in which we compete.

“In terms of electricity production, coal and gas continue to play an important role as a back up to intermittent renewable sources.

“Ironically, coal could become a more important option as future gas supplies are impacted by the ban on offshore oil and gas exploration,” Mr Baker concluded.

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