Global Emissions Reduction Key for Emissions Trading Scheme

18 April 2008 – The draft Climate Change Bill currently before Parliament will result in more CO2 being generated globally from cement manufacture, cement manufacturer Holcim (New Zealand) Ltd told the Finance and Expenditure Select Committee earlier this month.

Holcim New Zealand was among a number of key South Island industry players presenting submissions on the Climate change (Emissions Trading and Renewable Preference) Bill in Christchurch on 7 April.

While the company has been unequivocal in its support for the concept of emissions trading, it does not support the design of the trading scheme as set out in the draft Bill.

Managing Director Jeremy Smith told the committee, “ An effective Emissions Trading Scheme needs to lead to reductions in global emissions, and should be encouraging us to invest in low emissions technology.

``Presently the Scheme as outlined in the Bill encourages us to keep our existing plant at Westport open and continue to supplement it with imports, rather than to replace it with a highly efficient modern plant which produces much less CO2 per tonne of cement. We will not recommend to our parent company to invest in a new plant in New Zealand with the Bill in its present form.’’

In its submission Holcim stressed that the Scheme needed to correctly recognise and properly address the very real disadvantages that would result for its cement and lime businesses compared to overseas competitors, making them uneconomic in the medium term.

``Ultimately it could result in New Zealand’s domestic cement manufacturing base relocating offshore, whilst at the same time increasing the output of CO2 globally. To be effective an emissions trading scheme needs to provide fairness and equity with overseas competitors.’’

Jeremy Smith emphasised the key role of concrete in the economy, pointing out that concrete is the second most used commodity by volume in the world after water, and has cement as its key constituent.

``Concrete will be increasingly required in an economy focussed on sustainability,’’ he said. ``Life cycle analysis highlights that in many cases the total embodied energy of structures built using concrete is lower than that of other products over the whole life of the structure. Concrete, and therefore cement is important for New Zealand, and the design of the Emissions Trading Scheme is crucial in retaining domestic production.’’

Holcim New Zealand has been very proactive in offering to share the company’s experience of the European Emissions Trading Scheme. ``We feel it has some valuable lessons for New Zealand. Interaction with the select committee has been very constructive, and we continue to have a positive engagement with the Government on this issue.’’

A copy of Holcim New Zealand’s submission is available at www.holcim.com/nz

ENDS

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