Coal supports NZ food production

Coal and gas in the form of heat are important in food growing and processing because coal in the South Island, and coal and natural gas in the North Island, are approximately one-third the price of electricity.

Other energy sources could narrow the price gap - e.g., LPG, light fuel oil, wood chips or pellets - however, that would depend on availability and scale.

Meat and fish –coal is used for the hot water or steam used in freezing works and processing factories;

Veges – coal is used as heat in the canning of vegetables such as peas, beans and carrots; and to warm hothouses for eggplants, capsicums and chillies;

Salads – hothouse lettuces, tomatoes and cucumbers are grown using coal as heat;

Dairy - milk, butter and cheese production uses coal as a source of process heat;

Beer –coal is a heat source for drying hops and for the brewing process.

Policy-makers will wish to think carefully about calls to ban all new coal mining in New Zealand, or for New Zealand to unilaterally increase the price of carbon without reference to global carbon prices.

The likely consequence of such decisions would be for New Zealand to import coal to avoid the adverse effects described, or if that course were not competitive or permitted, changes in regional economies in New Zealand would occur.

Technological improvements to achieve other cost-effective sources of energy are being worked on, and are always possible, however, will take time to deliver. A review of energy strategy for New Zealand, including energy research, will need to take that into account.