Energy Minister Simeon Brown. Photo: RNZ / Angus Dreaver
A new draft framework to reduce net CO2 emissions from gas use and production is now open for consultation.
The Carbon Capture, Utilisation and Storage (CCUS) framework was estimated to reduce the country's net CO2 emissions by 4.65 megatonnes over the next two Emission Reduction Plan periods (2026-30 and 2031-35), Energy Minister Simeon Brown said.
CCUS is about capturing CO2 emissions from large sources, such as power generation or industrial facilities like natural gas production. The captured CO2 is then compressed and transported to be used elsewhere.
"Capturing CO2 emissions enables these critical industries to provide a least cost transition to a low emissions economy that strengthens our energy security and reduces net emissions and will align our policies with many other jurisdictions who recognise CCUS as part of their net zero framework," he said.
Brown said the new framework would attract investment in using captured CO2 emissions that would not otherwise benefit New Zealanders, to create valuable products and materials.
"It does this while emissions remain capped under the Emissions Trading Scheme (ETS).
"While capturing and utilising CO2 emissions, the framework we have released today will protect New Zealanders and our environment with a monitoring regime to ensure that carbon that is captured is effectively and safely stored."
Gas production levels in New Zealand are at a 40-year low following the previous government's decision to ban new offshore oil and gas exploration, said Brown
"Natural gas production is critical as we transition towards renewable energy.
"Our proposed CCUS framework, amongst other innovations, will enable an increasingly sustainable transition to a low emissions economy by allowing for carbon from natural gas to be captured."
The previous government had started work on a carbon removals strategy and was meant to begin consultation early this year.
New framework 'vital piece of the puzzle'
Energy Resources Aotearoa chief executive John Carnegie applauded the move, calling the CCUS a "vital piece of the puzzle to meet our net-zero emissions goals for the gas sector and other applications".
"By capturing emissions before they are released into the atmosphere, CCUS provides a critical tool for limiting CO2 emissions," he said.
Carnegie said it was "encouraging" to see the government taking steps to remove red tape and giving investors confidence to get projects underway.
CCUS projects capture emissions at source before being released into the atmosphere, he said.
He pointed to the United Nations Intergovernmental Panel on Climate Change which said that the use of CCUS is "unavoidable" if countries wanted to meet their net emission reduction targets.
"New Zealand has been lagging in developing the necessary regulatory framework and this consultation provides the first step in securing a more sustainable transition to a low-carbon economy."