Accelerating our transition to a low-emissions and climate-resilient economy
Budget 2023 helps to accelerate our transition to a low-emissions and climate-resilient economy, by expanding our low-emissions infrastructure and improving our energy security.
Since its establishment in 2019, New Zealand Green Investment Finance Limited (NZGIF) has been an important player in the work to finance and incentivise climate innovation and emissions reductions. Budget 2023 provides $300 million to recapitalise NZGIF and ensure it can fund a pipeline of low-emissions projects into the future.
New Zealand Green Investment Finance Limited
In the first Emissions Reduction Plan, the Government committed to building on the success of NZGIF. Recapitalising NZGIF in Budget 2023 will allow it to continue to accelerate investment into our low carbon future. Recent examples of this investment are included below.
Partnership with Kinetic: In March 2023, NZGIF signed a $50 million financing deal with Kinetic, Australasia’s largest bus transport operator, to help decarbonise public transport in New Zealand with electric buses and associated infrastructure. This agreement is expected to deliver more than 150 zero-emissions buses to New Zealand, which could lead to an abatement of more than 100 kilotonnes (Kt) CO2e.
Investing in renewable energy on-farm: In December 2022, NZGIF invested $10 million in Solagri Energy to support the roll out of solar energy to farms throughout New Zealand. The agreement is expected to finance around 120 solar arrays over three years, with an expected emissions impact of 36.1Kt CO2e over the life of the arrays.
Providing support for solar: In early 2022, NZGIF issued a $10 million Letter of Credit to solarZero to support the continued purchase of batteries and other solar hardware from Panasonic New Zealand. The Letter of Credit supports solarZero’s deployment of solar installations and the growth of its distributed storage network.
Decarbonising private transportation helps to reduce both our domestic emissions and our reliance on global fossil fuel markets. However, households looking to switch to EVs want to be certain they will have access to charging facilities when they need them. Budget 2023 helps to provide greater certainty to New Zealanders adopting EVs by investing $120 million to expand EV charging infrastructure. This will expand the growing national network of EV charging hubs across New Zealand, by adding 25 hubs each containing up to 20 chargers. We kicked off with two pilot charging hubs at high-traffic, high-visibility locations on key travel routes in the North and South Island, and we will begin rolling out the additional hubs in areas like Kaikōura, Tūrangi, and Tīrau.
As New Zealand transitions to a low-emissions and climate-resilient economy, some regions and sectors will be more impacted than others. For example, areas with economies that are highly reliant on high-emissions industry will face technological and cost barriers to decarbonising. Budget 2023 provides $32.5 million to accelerate the adoption of green hydrogen as a means to decarbonise energy in hard-to-abate sectors.
Emissions pricing is widely regarded as one of the most efficient mechanisms through which to incentivise the adoption of lower-emission behaviours and processes. The Government is committed to working with the agriculture sector to measure, manage, and reduce agricultural emissions and adapt to climate change. Budget 2023 also invests to set-up and operate an agricultural emissions pricing scheme.
Budget 2023 will also invest $38 million to design and implement a new regulatory regime for the NZ ETS and a centralised exchange for New Zealand Unit trading to improve the integrity, efficiency and trust in the NZ ETS as the system matures.