ETS - Can Tiawi Point Survive?

The implementation of the Emissions Trading Scheme (ETS) may will impact deeply on heavy industry in New Zealand. Rio Tinto, the owner of Tiwai Point aluminium smelter, said on Tuesday that hundreds of jobs could be lost if ETS requirements mean that Tiwai is longer the most cost competitive location.

It is a difficult situation and Rio Tinto's moves could even be considered as holding the government to ransom as they suggest a double standard by seeking to be excluded from the scheme. The government has proposed a concession of tax credits to the same value of carbon but this will be phased out by 2030. Rio Tinto say that this is not enough and that they need the tax credits until other countries face the same carbon treatment. So are we about to see another large manufacturer shift offshore, just as Fisher & Paykel announced in April?

We all know that we need to reduce pollution and our emmissions and a recent study said that 71 percent of businesses believed that large polluters should pay. This is a very reasonable view as heavy industry are likely to produce higher proportional pollution, which means that if they reduced then the reduction on national emissions would be far greater.

Given this announcement I wonder what effect the ETS implmentation will have on Holcim's proposed concrete plant near Oamaru. They do have some information on climate change here that is probably propaganda but interesting none the less.

New Zealand, an early adopter of an ETS system, needs to weigh up what it can do to protect industry but also the environment. No easy challenge. The survival of Tiawi seems to be in the hands of the government.