New Zealand is at “significant risk” of missing its 2030 and 2035 domestic emissions reduction targets, said the Climate Commission, as the country attempts to scrap its environmental policies and instead prioritise heavily emitting sectors to boost its economy.  

Last week (30 July), New Zealand’s He Pou a Rangi Climate Change Commission published its first emissions reduction monitoring report in which it said that while the country is on track to meet its first 2022–25 emissions budget, there are "significant risks" to meeting future emissions budgets and reduction targets. 

New Zealand has taken a U-turn on its green policies in the past year. 

After being elected in 2023, Prime Minister Christopher Luxon announced that his government would reverse the country’s ban on oil and gas exploration and promote more mining operations.  

The government’s move away from environmental priorities is to increase its exports and support its flailing economy, which Resources Minster Shane Jones deemed “the worst set of circumstances that I can remember in my adult life”.  

In March, New Zealand’s economy registered year-on-year growth of just 0.3%. Exports are a significant part of New Zealand’s economy, contributing to a quarter of its total revenue.

A new set of energy priorities 

The Luxon government proposed in June the Crown Minerals Act Amendment Bill that will reverse the country’s 2018 ban on offshore oil and gas exploration. The bill, set to be in place in the second half of 2024, aims to decrease coal imports, increase fuel exports and keep energy prices low for the public and small businesses.  

The legislation is set to expand the country’s oil and gas industry amid global efforts to regulate the sector to aid the energy transition.  

The government also plans to expand its mining industry, setting a new target to double the country’s mineral exports by 2045 with an investment of NZ$2bn ($1.18bn) to open ten new mining facilities.  

The new mining policy will make it easier to undertake small-scale gold mining activities, fast track consenting processes for new mining operations and promote the prosperity, exploration and mining of raw materials in New Zealand. For Jones, this policy will counter the country’s previous “excessive levels of environmental protection”. 

Jones highlighted that the policy was “long overdue”, adding that “the re-emergence of the mineral sector” was “driven by quite a brutal understanding of what our economic situation is”. 

Cautious reception

The government has emphasised the necessity of oil and gas, at least in the near term, due to the intermittent nature of renewables. Indeed, 80% of the electricity supply in New Zealand is powered by renewable energy, predominantly hydro and geothermal power, but only 30% of the country’s total energy consumption comes from renewables. 

Environmental groups are concerned that if New Zealand becomes reliant on oil and gas exploration to keep its economy and energy security afloat, the country will be disincentivised to continue increasing its renewable energy output. 

The Green Party opposed the government’s ruling, stating that the country could have a more sustainable and efficient economy if it prioritised clean energy.   

"The Government is tipping oil and gas onto the climate crisis fire, lining the pockets of fossil fuel companies, while everyone else will pick up the bill,” said Green Party co-leader Chlöe Swarbrick in a statement. 

The party also expressed concern that other countries will follow suite. 

Sara Walton, the University of Otago’s Climate Change Research Network co-director, told Reuters: "It is more important than ever for companies to be reducing their emissions in order to remain competitive internationally in terms of supply chains.”  

Critics are also wary of the new bill’s expansion of mining operations increasing the likelihood of approvals for seabed and other deep-sea mining practises, which are highly contested due to the potential damage caused to wildlife.  

The government said it is working on a climate plan that will include the planting of more trees, increasing renewable energy supply and more investment in clean technologies.  

However, critics are yet to be convinced as the government's U-turn on green policies has seemingly already signalled a transition against the country’s green initiatives, with Air New Zealand dropping its 2030 emission targets last week (30 July) after delaying the launch of its new cleaner aircraft citing higher prices of green fuel, becoming the first major carrier to drop its climate goals.