Industrial energy and process heat

Industrial and commercial energy users play an important role in New Zealand's economy. Energy is used across many sectors, including manufacturing, food processing, timber processing, greenhouses, hospitals, schools and commercial buildings.

A large share of this energy is used for process heat. Process heat is thermal energy used for industrial and commercial activities such as drying, sterilising, cooking, washing, pasteurising, heating buildings or producing steam.

Businesses are facing a changing energy landscape as technology develops, electricity generation increases, and domestic natural gas supply becomes more constrained. Government agencies are working to support businesses to improve energy efficiency, consider alternative fuels where appropriate, and make informed investment decisions.

Supporting business energy investment

The Government is helping businesses invest in equipment and technologies that improve energy performance and reduce reliance on constrained fuel sources.

Gas Transition Loan Guarantee Scheme

The Gas Transition Loan Guarantee Scheme supports eligible businesses to invest in projects that reduce natural gas use. The scheme provides a government guarantee to participating banks, helping businesses access lending on more favourable terms. Participating banks include ANZ, ASB, BNZ, Kiwibank and Westpac.

The scheme is intended to support investments such as energy efficiency improvements, fuel-switching projects and other technologies that reduce natural gas consumption while supporting business productivity and resilience.

If your business is interested in accessing a scheme-supported loan, your first step is to express interest with one of the banks listed above, and they will work with you to determine eligibility.

The Energy Efficiency and Conservation Authority (EECA) is providing direct support for commercial and industrial businesses interested in making the switch. Visit the EECA website to access advisory support, ranging from practical tools and guidance to assistance developing a credible investment or business case:

Support for gas using businesses — Energy Efficiency and Conservation Authority(external link)

More information on the scheme is available on the Treasury’s website:

Gas Transition Loan Guarantee Scheme — The Treasury New Zealand(external link)

See also news and press releases:

Loans to help businesses transition away from gas — Beehive.govt.nz(external link)

Businesses can now apply to transition from gas — Beehive.govt.nz(external link)

Gas transition loan guarantee scheme launches today

Investment Boost

Businesses investing in new productive assets may be able to benefit from Investment Boost. This measure allows eligible businesses to immediately deduct 20% of the cost of new assets for tax purposes, in addition to normal depreciation rules.

For some businesses, this may support investment in equipment that improves energy performance or enables fuel switching.

New assets - Investment Boost — Inland Revenue(external link)

Business support and advice

The Energy Efficiency and Conservation Authority (EECA) provides programmes, tools and expert support to help businesses understand their energy use and identify opportunities to improve efficiency and resilience.

Support is available for businesses exploring energy efficiency improvements, electrification opportunities, and alternatives to natural gas where these are practical and cost-effective.

Find out more:

Energy saving information for New Zealand businesses — Energy Efficiency and Conservation Authority(external link)

Alternative energy options

New Zealand's energy system is changing as new renewable electricity generation comes online, new fuel options emerge, and domestic gas supply becomes more constrained. The Government's energy work programme is focused on supporting reliable and affordable energy, improving information for energy users, and helping businesses make informed investment decisions.

Wood Energy Strategy and Wood Energy Action Plan

For some businesses, alternative fuels may provide practical options alongside electricity. The Government's Wood Energy Strategy and Wood Energy Action Plan support the growth of the wood energy sector and improve access to wood fuel for suitable process heat and heating applications.

Wood Energy Strategy

Government Statement on Biogas

The Government has also published a Government Statement on Biogas, which sets out actions to support the development of a biogas market in New Zealand.

Government Statement on Biogas

Other initiatives and resources

Government Investment in Decarbonising Industry (GIDI) Fund (2020 to 2023)

The GIDI Fund was established to accelerate the decarbonisation of industrial process heat and to contribute to the COVID-19 recovery by stimulating the domestic economy and supporting employment.

Government Investment in Decarbonising Industry Fund — Energy Efficiency and Conservation Authority(external link)

Process Heat in New Zealand: Opportunities and barriers to lower emissions

In early 2019, MBIE and EECA published a technical paper, Process Heat in New Zealand: Opportunities and barriers to lowering emissions. Feedback on that paper has informed the development of the government’s plan to ensure we have the regulatory and policy settings we need to accelerate energy efficiency and the uptake of renewable fuels in industry.

Read the technical paper and submissions:

Process Heat in New Zealand: Opportunities and barriers to lowering emissions

Process heat fact sheets

The factsheets were prepared in 2018 to provide information on process heat use across sectors.

Contact us

Any queries about process heat in New Zealand can be emailed to Energy use.