Emission deals to be discussed

By BRIAN FALLOW

A paper mill, a glass manufacturer and two gold miners have been given the green light to negotiate greenhouse agreements with the Crown.

Negotiated greenhouse agreements (NGAs) exempt a firm fully or partly from the carbon tax which the Government plans to introduce by 2008.

They are available only to firms whose competitiveness would be at risk if subject to the tax, and they require them to move to world's best practice, for comparable enterprises, in controlling emissions of the greenhouse gases blamed for global warming.

So far one such agreement has been concluded, with the New Zealand Refining Company last year. It was fast-tracked because the Marsden Pt oil refinery faced a major capital expenditure decision if it was to comply with Government requirements for cleaner fuels by 2006.

Prime Minister Helen Clark announced on Friday that the Government was ready to enter into negotiations with Norske Skog Tasman, which operates the Kawerau paper mill, ACI Glass Packaging and two gold mining companies, Newmont Waihi and GRD Macraes.

They represent the first batch from 12 applications for NGAs the Climate Change Office has received.

Spokesman Martin Harvey said that in deciding priorities the office looked at whether there was urgency in terms of decisions the firms had to make.

The office hopes to have the first agreements concluded in the first quarter next year, by which time it will already have begun negotiations with others in the queue. The aim is to have six agreements concluded by the middle of next year.

Norske Skog environmental manager Robert Donald said the company had a significant investment decision relating to the Kawerau mill coming up soon.

Electricity costs, which would increase with a tax on the carbon dioxide emissions associated with thermal power stations, represent about 30 per cent of the mill's expenses.

ACI Glass, which makes glass containers, illustrates that it is not only the competitiveness of export industries that is relevant; it has to compete with imports from countries with no Kyoto Protocol obligations.

In the case of the gold mines the emissions arise from energy expended in moving and processing large amounts of material for every ounce of gold produced.