KiwiRail needs to electrify all of the North Island's main trunk line and expand into the South Island as well if the country is serious about reducing its carbon footprint, an energy professor says.
The government has announced it plans to spend $35 million over the next four years refurbishing 15 electric trains, extending their life by 10 years.
KiwiRail freight trains use diesel locomotives in Wellington, switch to electric units in Palmerston North, then back to diesel in Hamilton.
The company had planned to scrap the electric trains by April next year, replacing them with Chinese-made diesel locomotives.
Massey University professor of sustainable energy Ralph Sims worked on the last Intergovernmental Panel on Climate Change, which looked specifically at transport.
He said many people argued putting electric rail back into diesel was a backward step and the government's investment was wise.
Renewable electricity runs throughout the stretch of rail between Palmerston North and Hamilton.
"What we need to do of course is to extend it and go the whole length of the North Island and then we'll be saving even more greenhouse gases," he said.
Prof Sims said there had been a significant move away from the previous government's roads of national significance, but this government needed to go further, electrifying the main trunk line and the network in the South Island eventually.
"The more efficient we can make our rail system then we can attract more freight onto it and that takes the freight off the road, so electrification is a key part of that total equation."
Rail and Maritime Union general secretary Wayne Butson said the investment from the government would be a boon for some regions, such as Taumarunui, Taihape and Ōhakune.
He said those regions had rail workers on good terms and conditions, putting money into the local economy.
KiwiRail expects the refurbishment of the electric locomotives can create between four and eight extra jobs.
Mr Butson said this could mean the Hillside workshop in Dunedin, which was shut down five years ago by KiwiRail but has since been doing private work, could pick up again.
"There is probably going to have to be some reallocation of Hutt workshops' current workload, which is immense, and actually I do envisage that some work will trickle down into Hillside and actually grow the workforce down there," he said.
Transport Minister Phil Twyford said the electrification of the main trunk line had to be on the government's horizon.
"It may be that we skip electrification and move straight to hydrogen fuel trains, but that's work that's yet to be done, but we certainly want to get the bulk of KiwiRail's operations off diesel and onto renewable sources."
He said the government was reviewing the role of rail in the country, including how it is funded and hoped to make an announcement in the next few months.