New report highlights ERP implications for wider Bay of Plenty economy

The implications of the Government’s Emissions Reduction Plan (ERP) for the Bay of Plenty economy have been outlined in a new report commissioned by Bay of Connections.

The Government released Aotearoa New Zealand’s first ERP in May 2022, containing strategies, policies and actions for achieving the country’s first emissions budget for the period 2022-25, and setting a direction for emissions reductions in the second and third budget periods.

While the specific impacts on the region will be determined as ERP actions are developed, the report, prepared by Ecometric Consulting Limited, shows that the wider Bay of Plenty is well placed to enable industry decarbonisation, with businesses already progressing emissions-reducing initiatives.

Businesses will need to strike the right balance between maintaining their competitive edge in global and domestic markets and investing in plant and processes that deliver emissions reductions.

Change will be incentivised by the New Zealand Emissions Trading Scheme and emissions pricing.

The investment required to enact change will support the uptake of funding initiatives designed to help businesses, including the expansion and ongoing roll-out of the Government Investment in Decarbonising Industry (GIDI) fund.

The manufacturing, construction, transport, agriculture, and waste services sectors together contribute about 89 per cent of the CO2 emissions in the Bay of Plenty region, with agriculture responsible for 53 per cent of total regional emissions.

The Government is currently considering the He Waka Eke Noa partnership’s recommendations on an alternative to pricing agricultural emissions through the NZ ETS, the final decision – due in December 2022 – will have repercussions for the region.

Dependence on manufacturing varies across the region and manufacturing activities differ in emissions intensity. Geothermal resources used for industrial processes in Kawerau, Taupō and Rotorua help to keep manufacturing emissions relatively low.

The region’s transport sector is larger than the national average because of activities associated with the Port of Tauranga.

New Zealand is highly dependent on road transport to move freight – heavy vehicles, mostly large trucks, emit nearly 25 per cent of New Zealand’s transport emissions. The decarbonisation of freight and uptake of transport alternatives are critical to address this challenge and ensure economic growth doesn’t come at the cost of the region’s low carbon aspirations.

The region’s forests act as a valuable carbon sink and provide sustainable building materials and inputs into the emerging bioeconomy.

The Bay of Plenty has the opportunity to become a leader in low carbon construction, with in-region expertise, operations and resources to enable the utilisation of engineered timber.

Transforming New Zealand’s forestry sector to extract more value and provide wood-based biofuels has the potential to increase employment and result in a higher-skilled workforce.

Māori make up about 10 per cent of employment in the construction, manufacturing, agriculture, forestry and fishing sectors, and just over 5 per cent in transport and warehousing.

It’s important that upskilling opportunities in these sectors are inclusive, and that the transition to lower emissions alternatives does not negatively impact Māori businesses and employment.

Key to this is ensuring Māori aspirations are central to the development of regional workforce plans and that Māori businesses are connected to procurement opportunities, funding streams and initiatives to reduce emissions.

The wider Bay of Plenty has a favourable environment to enable a low carbon economy – renewable energy, research institutions, abundant workforce and a diversified economy – offering multiple touchpoints and opportunities for ‘green’ projects and initiatives.

Bay of Connections is working alongside stakeholders to help the region make a positive move into a net-zero carbon economy, one which creates jobs and higher standards of living for residents.

The Ecometrics report* can be found here.

*Emissions information provided in this report is based on the 2019 Emissions Inventory (Stats NZ 2022), and regional and district GDP and employment data are based on the 2019-20 year, provided by Infometrics. Significant impacts on the regional economy since those periods, such as COVID-19 or the Kawerau mill closure, are not reflected in this data.