The big coal-burning Glenbrook mill has applied to keep operating until 2056, while Government delays enacting resource management changes
Auckland Council has no legal ability to consider the climate-changing effects of a steel mill burning nearly a million tonnes of coal when deciding if it can operate for the next 35 years.
The law forbids councils from weighing up the effects of greenhouse gas emissions when deciding on consent applications. The government did overturn this in 2020 – but held back enacting the relevant section for two-and-a-half years to allow it time to develop direction for councils.
In the interim, New Zealand Steel has applied to continue its operations at south Auckland’s Glenbrook Steel Mill for 35 years. An Auckland Council planner has compiled a report ahead of the hearing, which recommends to the decision-making commissioners that the consent is granted, with conditions, for a shorter period of 20 years.
That would mean the mill could operate in full until 2041, or 2056 if commissioners grant the full timeframe sought by NZ Steel.
Auckland Council confirmed if the consent is granted, it would have no legal ability to revoke or limit the consent at a later date on account of any climate change-related concerns.
Greenpeace, which took extensive legal action over this part of the law 15 years ago, said pushing the law back for two-and-a-half years was “frankly ludicrous”.
If the consent was approved, spokesperson Adam Currie said, it could consign the country to decades of heavy emissions. “This would be completely unacceptable and in direct contradiction with the government's climate aspirations."
NZ Steel: continued operations are 'critical'
NZS would not comment on the application until after the consent hearing, to be held on Wednesday and Thursday this week.
However it has previously made clear to the government it plays a “critical” role in producing materials for the housing, construction, infrastructure and farming sectors, as well as providing significant employment.
“NZ Steel contributes $600 million per annum to the New Zealand economy… [and] more than 1,400 people [are] employed directly in high-skilled, well-paid jobs,” the company said in a 2019 submission on the Zero Carbon Act.
"There is no conceivable future in which the world does not continue to need steel. In fact, demand is forecast to increase 55 per cent between now and 2050,” the company told Stuff in 2019.
Steel is also a crucial material in building clean electricity generation, such as solar infrastructure, wind turbines, geothermal plants and transmission infrastructure.
For these reasons steel is considered a ‘hard-to-abate’ sector in climate change policy – highly beneficial with no viable alternatives.
Figures from the Environmental Protection Authority indicate NZ Steel emitted around 1.55 million tonnes of carbon dioxide-equivalent emissions in 2020/21. This is a shade under two percent of the country’s 2020 gross emissions (78.8 Mt CO2-e).
What the law says
For many years local councils have been explicitly forbidden from considering the effects of greenhouse gas emissions on climate change when deciding on discharge-to-air resource consent applications, according to section 104E of the Resource Management Act 1991.
In 2020 the Government repealed s104E, with s35 of the Resource Management Amendment Act. This was passed in June 2020, the same year the government declared a climate emergency. (Auckland Council declared one in 2019.)
However, despite being passed, Cabinet agreed to delay in the enactment of the climate change amendments from December 2021 to 30 November 2022.
Two-and-a-half years for direction to be written
The environment minister, David Parker, said the delay in enacting s35 of the Resource Management Amendment Act 2020 was to “allow time for national direction on industrial greenhouse gas emissions to be developed, which will support regional council decision making on discharge-to-air resource consents”.
“Taking this time to develop robust national direction will ensure that there are consistent rules in place to reduce greenhouse gas emissions from industrial activities, in support of our climate goals,” a spokesperson from Minister Parker’s office said.
His office did not respond to further questions about whether that national direction has been developed yet, or if it will be by November 30 this year, when the law comes into force.
The statement also said the Resource Management Act was not the main way to reduce emissions in New Zealand, which was more the function of the Emissions Trading Scheme.
However, NZ Steel receives 90 percent of its carbon emissions (NZ Units) under the scheme, for free from the Government, so it is largely unaffected by the price of carbon. In 2020, the most recent year published, NZ Steel received 2.03 million NZ Units from the government’s allocation – two million tonnes of CO2-e emissions.
The intent of the free carbon allocation is so emissions-intensive manufacturing is not lost to companies operating offshore with more relaxed environmental laws and/or no price on emissions. This production shift could result in more carbon emissions globally (carbon leakage) as well as the loss of economic benefit to New Zealand.
A call to revisit the consent
Green Party co-leader James Shaw expressed the urgency of passing the new law.
“We must protect the climate with a speed and scale equal to the crisis itself," he said.
"It is very unfortunate that there have been delays to the enactment of climate change amendments to the Resource Management Act. I opposed those delays as Minister and the Green Party opposed the delay during consultation.”
At the time the law passed, Shaw called the old arrangement a “loophole” and said the Green Party was “thrilled” at it was being overturned.
Dr Grant Hewison, an environmental lawyer and chair of Lawyers for Climate Action New Zealand Local Government Sub-Committee, said the timing of this – in the grey area between the law passing and it being enacted – was “very disappointing”.
“I believe it is necessary for the Council to take account of emissions as is the intent of the Resource Management Amendment Act and New Zealand’s international obligations. Not doing so would be acting against this intent,’ Hewison said in his submission to council.
He also asked, if granted, a condition be included in the consent to allow Auckland Council to later revisit the decision to decide if it complies with government climate change policies.
Adam Currie of Greenpeace said the time spent developing the guidelines was too long.
“The delay to making these critical amendments is both unnecessary and contrary to the urgency the the climate crisis requires," he said. “If the application is granted the government should provide a later recourse so the council can revoke their consent."
This week’s hearing
The hearing report, written by Auckland Council senior planner Jonathon Clarke, recommended approving the consent for 20 years instead of the 35 sought by the company.
The 20 year period was justified by Clarke as long enough to provide certainty of investment for NZS, but was a “precautionary approach” in the event that our understanding of the human impacts of specific air pollutants evolved in that timeframe, or new control technologies became available that made the current mitigation conditions shy of best practice.
A panel of four commissioners will hear the application on October 26 and 27 at the Waiuku War Memorial Hall in Auckland. The hearing is open to the public to attend. Decisions are usually made within 15 working days. The hearing documents, including the report by Auckland Council, are available here.
