Implementation of bioenergy

in New Zealand – 2021 update

Country Reports
IEA Bioenergy: 10 2021

This report was prepared from the 2021 IEA World Energy Balances and Renewables Information,
combined with data and information provided by the IEA Bioenergy Executive Committee and Task
members1. Reference is also made to FAOstat as well as data from national statistics. All individual
country reports were reviewed by the national delegates to the IEA Bioenergy Executive Committee,
who have approved the content. General background on the approach and definitions can be found
in the central introductory report for all country reports.

Edited by: Luc Pelkmans, Technical Coordinator IEA Bioenergy

Contributions: Paul Bennett, Scion

HIGHLIGHTS
• Renewables make up 40% of total energy supply in New Zealand in 2019. The renewable energy
share in final energy consumption is 31%2, of which a quarter comes from biomass.

• Hydropower is dominant in electricity production, followed by geothermal power. The role of

biomass-based electricity is marginal. Most bioenergy is used for heating purposes, particularly
in industries.

• New Zealand has a high use of transport fuels per capita, which is still increasing. Particularly
diesel consumption is going up, while gasoline is rather stable. The share of biofuels is currently
at very low levels (0.1% of transport fuels) but is expected to increase in the coming years.
• New Zealand is a country with low population density and a relatively high forest area. The use
of biomass/bioenergy is modest in relation to its domestic potential. Substantial progress is still
possible to deploy bioenergy from solid biomass.
• Liquid biofuels and energy from MSW are underdeveloped at this stage and provide high
deployment opportunities.
• The Climate Change Response (Zero Carbon) Amendment Act 2019 provides a framework by
which New Zealand can develop and implement clear and stable climate change policies that 1)

1
While data for 2020 are starting to become available at national level, it was decided to consider trends up to
2019 for good comparability and benchmarking between the different IEA Bioenergy member countries. Care
should also be taken when using 2020 data for analysing trends as these data are distorted by the COVID19
Pandemic.

2
More than half of renewable energy supply is from geothermal energy. Mind that geothermal power implies
a large share of unused heat which is counted in total energy supply – the actual share of geothermal energy in
final energy consumption is around 6%.
 contribute to the global effort under the Paris Agreement to limit the global average
temperature increase to 1.5° Celsius above pre-industrial levels and, 2) allow New Zealand to
prepare for, and adapt to, the effects of climate change.

• In June 2021, The Climate Change Commission of New Zealand has issued its first advice to the
Government. This includes recommendations for the first three carbon budgets, which work out
to an average annual reduction, from a 2019 baseline, of 7% between 2022-2025, 20% between
2026-2030, and 35% between 2031-2035.

• During 2021, the Government has published three consultation documents on 1) Phasing out
fossil fuels in process heat, 2) Transport Emissions: Pathways to Net Zero by 2050, and 3)
Increasing the use of biofuels in transport: consultation paper on the Sustainable Biofuels
Mandate

COUNTRY PROFILE
Population and land use
New Zealand is a is an island country in the
southwestern Pacific Ocean. It has a total
land area of 263 thousand km² and a
population of 4.8 million people, which
represents a very low population density of
18 persons per km².

New Zealand's climate is predominantly

temperate maritime. 40% of the land area is
agricultural land, dominated by permanent
grasslands. 37% of the land area is forest
land (of which one third is protected).
Figure 1: Land use in New Zealand (2018 figures - Source: FAOstat)

Final energy consumption

Overall final energy consumption in New Zealand (also including non-energy use of oil, natural gas,
and coal in industry) equates 3.1 tonnes of oil equivalent (toe) per capita, which is somewhat above
the average of IEA Bioenergy member countries. Energy use in industry and transport tends to be
higher than in most other countries, while energy consumption in the residential sector and services
is lower.

2
Table 1: Distribution of the final consumption of energy carriers by sector in New Zealand (2019
figures - Source: IEA (2021) World Energy Balances and Renewables Information)

Final consumption energy Toe/capita % of total Median*

carriers (2019) (toe/capita)
Industry (energy use) 0.95 30% 0.67
Industry (non-energy use) 0.33 10% 0.21
Transport 1.13 36% 0.69
Residential 0.32 10% 0.57
Commercial & public services 0.26 8% 0.34
other 0.14 5%
Total 3.14 2.34
3
* Median of the 25 member countries of IEA Bioenergy

NATIONAL POLICY FRAMEWORK IN NEW ZEALAND

TARGETS AND STRATEGIES

The Climate Change Response (Zero Carbon) Amendment Act 2019 provides a framework by which
New Zealand can develop and implement clear and stable climate change policies that:

• contribute to the global effort under the Paris Agreement to limit the global average
temperature increase to 1.5° Celsius above pre-industrial levels
• allow New Zealand to prepare for, and adapt to, the effects of climate change.

The changes do four key things:

• set a new domestic greenhouse gas emissions reduction target for New Zealand to:
o reduce net emissions of all greenhouse gases (except biogenic methane) to zero by 2050
o reduce emissions of biogenic methane to 24–47% below 2017 levels by 2050, including
to 10% below 2017 levels by 2030
• establish a system of emissions budgets to act as steppingstones towards the long-term target
• require the Government to develop and implement policies for climate change adaptation and
mitigation
• establish a new, independent Climate Change Commission to provide expert advice and
monitoring to help keep successive governments on track to meeting long-term goals

3
Comparative figures of the different IEA Bioenergy member countries are discussed in the central Countries’
Report.

3
Table 2: Renewable energy and climate targets in New Zealand.

Sector Share of renewables in gross GHG reduction target

final consumption per sector

Overall target Net Zero emissions of all greenhouse gases

(except biogenic methane) by 2050
Electricity Labour party targets:
90% renewable by 2025
100% renewable by 2030
Transport DRAFT4 - 3.5% CO2 reduction of emissions
from transport by biofuels in 2025

A description of renewable energy and climate policies and measures in New Zealand is available at
the IEA’s Policies and Measures Database:
https://www.iea.org/policies?qs=new%20ze&country=New%20Zealand

Specific policies related to renewable electricity, renewable heat and transport biofuels will be
highlighted in the chapters about the role of bioenergy in different sectors.

THE CONTRIBUTION OF BIOENERGY IN NATIONAL ENERGY SUPPLY

TOTAL ENERGY SUPPLY

The total energy supply (TES) of New Zealand in 2019 amounted to 856 petajoule (PJ) with fossil
fuels (oil, coal, gas) contributing around 60%. Oils products represent 33% (279 PJ), natural gas 20%
(168 PJ) and coal 7.3% (63 PJ).

Renewable energy sources have a share of 40% or 346 PJ. The contribution of bioenergy (50 PJ) is
much lower than hydropower (92 PJ) and particularly geothermal energy (196 PJ). Geothermal
energy contributes to 23% of total energy supply, however, geothermal power includes an important
share of unused waste heat which is counted in total energy supply; the contribution of geothermal
energy in New Zealand’s final energy consumption is limited to 6.3%.

4
Draft target in the consultation document Increasing the use of Biofuels: Sustainable Biofuels Mandate in
New Zealand. The reduction is against the emissions that would have occurred if all fuels sold were fossil fuels.

4
Figure 2: Total energy supply5 and the
contribution of different energy sources
in New Zealand, with distribution in
2019 (Source: IEA (2021) World Energy
Balances and Renewables Information)

Overall TES has increased from 730 PJ to 850 PJ from 2009 to 2014 and had more or less stabilized
since. There were some limited fluctuations in fossil fuels, but overall, they were rather stable in the
past decade with oil products around 270 PJ, natural gas around 170 PJ, and coal around 60 PJ.
There was a 6% increase in fossil fuels in 2019 which was largely because of a dry year and lower
hydro generation being taken up by fossil fuel use. There was an increase of the share of renewable
energy in total energy supply from 32% in 2007 to 40% in 2011 and this has more or less stabilized
since. Hydropower and bioenergy were quite stable in the past decades around 90 PJ and 50 PJ
respectively. There was an increase of geothermal energy supply between 2007 and 2014 from 90 to
200 PJ, which has stabilized since.

Figure 3 shows the evolution of the different types of bioenergy. As indicated, the overall share of
bioenergy was fairly stable around 50 PJ. Solid biomass represents almost 90% of bioenergy supply,
with some lower shares of biogas and charcoal (both around 3 PJ).

5
Total energy supply refers to the use of resources. In terms of the role in the energy system this distribution
overestimates the role of resources producing electricity with a high share of unused waste heat (like
geothermal electricity in New Zealand).

5
Figure 3: Development of total energy supply from bioenergy in New Zealand 2000 – 2019 (Source:
IEA (2021) World Energy Balances and Renewables Information)

Evolution of the bioenergy carriers:

• Solid biofuels are mostly used in wood processing industries at a level of 35 PJ per year. The use
of solid biofuels for residential applications is quite modest around 6 PJ. Some solid biomass (3-4
PJ) is also used for power production. Overall, these volumes are quite stable.
• Biogas saw an increase in the 2000s and has stabilized around 3 PJ in the past decade.
• Liquid biofuels are at very low levels at less than 0.5% of bioenergy.

Table 3 displays the 2019 total bioenergy supply values on a per capita basis. Compared to the other
24 member countries of IEA Bioenergy (expressed per capita), New Zealand ranks at the higher end
for solid biofuels, in the middle for biogas and very low for liquid biofuels and renewable MSW.
Table 3: Total energy supply per capita in 2019 for different bioenergy carriers

Supply per capita Median IEA

Bioenergy members

Bioenergy 10.4 GJ/cap 10.6

Solid biofuels 9.1 GJ/cap 7.0

Renewable MSW 0.0 GJ/cap 0.8

Biogas 0.7 GJ/cap 0.7

Liquid biofuels 0.0 GJ/cap 1.5

Source: IEA (2021) World Energy Balances and Renewables Information

Table 4 indicates the amounts of the different bioenergy carriers compared to some relevant
reference points, namely the amount of forest in the country (for solid biomass), the amount of
generated MSW (for renewable MSW used for energy), the amount of natural gas consumed in the
country (for biogas) and the amount of fossil oil products consumed (for liquid biofuels).

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Table 4: Comparison of the supply of different bioenergy carriers in 2019 to specific reference
points

Compared to reference points Median*

Bioenergy 5.8 % of total energy supply 7.2 %

Solid biofuels 6.9 GJ/ha_forest compared to the domestic hectares 21.3 GJ/ha_forest
of forest land (excl. protected)

Renewable MSW 0.00 GJ/ton_MSW compared to the total generated 1.4 GJ/ton_MSW
MSW in the country

Biogas 0.020 GJ/GJ_NG compared to natural gas supply 0.023 GJ/GJ_NG

Liquid biofuels 0.001 GJ/GJ_oil compared to oil products supply 0.028 GJ/GJ_oil

Source: energy data from IEA (2021) World Energy Balances and Renewables Information; forest
figures from FAOStat; waste figures from World Bank
* Median of the 25 member countries of IEA Bioenergy6

Specific comments in relation to the reference points:

• While the use of solid biomass for energy per capita is higher than most other IEA Bioenergy
member countries, its use is quite low compared to the amount of forest land in New Zealand
(less than 0.4 ton dry mass of wood per hectare7). Given the low current use, there might be
considerable technical potential available.
• Liquid biofuels and energy production from (the renewable share of) MSW are very low,
however further policy clarity on the long-term use on MSW is required.

6
Comparative figures of the different IEA Bioenergy member countries are discussed in the central Countries’
Report.
7
Counted with a typical calorific value of wood (dry mass) of 19 GJ/ton _dry mass

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ROLE OF BIOENERGY IN DIFFERENT SECTORS

OVERVIEW
The overall 2019 share of renewables in final energy consumption among electricity, transportation
and heat sectors is 31%, with bioenergy making up 8% of the energy share (Table 5). Note that these
figures are lower than the shares in total energy supply (where unused waste heat, e.g., in fossil
power or geothermal power production, is also included).

Table 5: Role of bioenergy and renewable energy in electricity, transport energy and fuel/heat
consumption in 2019

Sector Share of bioenergy Share of Overall consumption

renewable
energy

Electricity8 1.4% 81.8% 45 TWh (161 PJ)

(57.1% hydro)

Transport energy (final 0.1% 0.3% 226 PJ

consumption)

Overall fuel and heat 21.8% 26.0% 198 PJ

consumption9

TOTAL FINAL ENERGY 7.8% 31.4% 3402 PJ

CONSUMPTION

Source: IEA (2021) World Energy Balances and Renewables Information

The following paragraphs will consider the evolutions in the different sectors.

ELECTRICITY
The power production in New Zealand is already largely renewable, with a dominating role of
hydropower at a level of around 60% (26 TWh) and geothermal power at 18% (8 TWh) in 2019. The
share of fossil fuels is around 18%, mostly natural gas (6 TWh) and some coal power (2 TWh). Wind
produces 5% of power and biomass 1.5%.

8
Renewable electricity production compared to final consumption. Potential renewable shares of imported
electricity are not included.
9
This includes final consumption of fuels and heat in industry, the residential sector, commercial and public services and
agriculture/forestry. Transport fuels are excluded. Energy used for transformation and for own use of energy producing
industries is also excluded.
Electric heating (direct or through heat pumps) is not included in these figures as this is not separately reported.

8
Figure 4: Evolution of the electricity mix in New Zealand 2000 – 2019 (Source: IEA (2021) World
Energy Balances and Renewables Information)

The level of hydropower has been quite stable in the past decades, while geothermal power
increased from 3 PJ in the early 2000s up to 8 TWh recently, with the main growth between 2007
and 2015. Wind has increased up to 2 TWh in the 2000s but has stabilized since 2011. Bioenergy has
been very stable around 0.5 TWh in the past decades. There is a small fraction of solar power
representing 0.3% of power production.

Policy framework
There has been no specific legislation to accelerate bioenergy for power production. The New
Zealand Battery Project has been set up to address the lack of dry year storage in the electricity
system, and it is considering the challenges of moving to an increasingly renewable electricity
system, while maintaining affordability and security of supply. The Battery Project will consider a
range of possible solutions, including bioenergy.

9
HEAT/FUEL
Figure 5 shows the role of different fuels/energy carriers for providing heat in different sectors
(industry, residential sector, commercial and public services and other). Fuel use by energy
producing industries for transformation and for own use is excluded. Mind that electric heating
(direct or through heat pumps) is not included in these figures as this is not separately reported in
the IEA database.

Figure 5: Evolution of fuel and heat consumption in New Zealand 2000 – 2019 (Source: IEA (2021)
World Energy Balances and Renewables Information)

The overall consumption of fuel/heat fluctuated between 170 and 200 PJ in the past decades. The
provision of heat is still dominated by fossil fuels (73%) in 2019, with natural gas being the main
energy source (37%), followed by oil products (23%) and coal power (14%). Bioenergy represents 22%
of heat production, which is mostly in industries. 4% of heat is provided by geothermal energy.

There is no reporting of heat sales in New Zealand.

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Policy framework
The main relevant policy instruments behind the evolutions of renewable heat are:

• April 2021 Consultation Document – Phasing out fossil fuels in process heat. The intent is:
o No new coal-fired boilers for low and medium temperature heat
o Phasing out coal in existing sites by 2037 for low and medium temperature heat process
heat requirements
o Require all other sites to have a emissions reductions plan for uptake of best practices
and transition from fossil fuels

In addition to the price signal set by the NZ ETS, there is work already underway to reduce industrial
emissions from low to medium temperature process heat, including:

• a range of Energy Efficiency and Conservation Authority (EECA) programmes for businesses,
which received increased funding in Budget 2021
• implementing the Government Investment in Decarbonising Industry (GIDI) fund
• developing National Direction on Industrial Greenhouse Gas Emissions under the RMA

The Government is developing an Industry Transformation Plan for the Forestry and Wood
Processing sector. Key objectives of the plan are to increase value-add wood processing and support
the production of low emissions wood products and bioenergy. The plan will make
recommendations on ways to improve certainty of supply of wood biomass, the role of government
in managing and accelerating the development of the bioenergy market in New Zealand and attract
investment in primary processing and the production of biofuels.

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TRANSPORT
Figure 6 shows an overview of the energy used in transport in New Zealand, split up by different
fuels/energy carriers.

Figure 6: Evolution of transport fuels in New Zealand 2000 – 2019 (Source: IEA (2021) World Energy
Balances and Renewables Information)

After a stabilisation between 2004 and 2014, overall transport energy use has been steadily
increasing in the past 5 years. Gasoline was the dominant fuel, but the consumption of diesel fuel is
increasing and has now reached similar levels as gasoline, both at 46% of transport fuel
consumption. Mind also the share of ‘other oil-based fuels’ at 7% of transport energy which
represents aviation fuel for domestic flights.

There has been a very limited uptake of biofuels, with levels around 0.1% of transport fuel
consumption.

Electricity in transport is at very low level (0.2% of total transport energy). The use of electricity in
road vehicles is still marginal in 2019 (0.06% of total transport energy use) but this level may
increase in the coming years.

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Policy framework
The main relevant policy instruments behind the evolutions in biofuels are:

• In 2008, the Government introduced a biofuels sales obligation, which would require suppliers of
petrol or diesel in New Zealand to also supply a minimum proportion of biofuels. The biofuel
proportion was initially 0.5 percent of a liable supplier's petrol and diesel sales, rising to 2.5
percent over four years. However, it was repealed shortly after the General Election in 2008.
Between 2009 and 2012, the Government implemented a biodiesel grants scheme.
• Since then, the main policy incentives for biofuels remaining in New Zealand are the New
Zealand Emissions Trading Scheme (ETS), the excise tax exemption for bioethanol and some R&D
support to research institutions, such as Scion. The ETS zero-rates the biofuel component of
transport fuels, but the current carbon price translates to only around 9 cents per litre for diesel,
and 7.8 cents for petrol. The petrol excise duty is 70.024 cents per litre, which translates to a tax
advantage of 7 cents per litre for 10% bioethanol blend (E10) over petrol.
• National Land Transport Fund also provides an incentive of NZ$0.69/litre incentive for the
bioethanol fraction of gasoline/ethanol blends.
• To help New Zealand move towards net zero emissions by 2050, the New Zealand Government is
now proposing to implement a sustainable biofuels mandate, which would require liable fuel
suppliers to reduce the emissions of the liquid fossil fuels they supply in New Zealand by a set
percentage each year.
• The Government is also investigating the potential for the production in New Zealand of
Biocrude, Advanced Liquid Biofuels and Solid Biofuels made from woody biomass as part of the
Forestry and Wood Processing Transformation Plan.

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RESEARCH FOCUS RELATED TO BIOENERGY
The New Zealand Government provides substantial funding through various funds, including:
Catalyst, Endeavour, Envirolink, The Partnership Scheme, Innovative Partnerships, National Science
Challenge, PreSeed Accelerator Fund, Commercialisation Partner Network, Strategic Science
Investment Fund, RSI: Talent and Science Promotion, Advanced Energy technology Platform,
Callaghan Innovation's R&D grants and Sustainable Food and Fibre Futures.

Scion, a New Zealand Crown Research Institute, has a bioenergy research programme funded by the
NZ Strategic Science Investment Fund, contestable and commercial funding, Sustainable bioenergy
and biofuels produced from forestry, other biomass and industrial side streams will increase New
Zealand’s energy security, reduce greenhouse gas emissions and advance the development of
biorefining and industrial symbiosis.

Scion's bioenergy research programme focusses on:

• Wood-based (lignocellulosic) replacements for transport biofuels and industrial energy, both of
which currently use large amounts of non-renewable resources.
• Identifying, adopting, and adapting the best international technologies, ensuring they are cost-
effective, risk is managed, a good "fit" to New Zealand, and building the capability for large scale
uptake and deployment.

Biofuel research at University of Canterbury includes:

• Characterising liquid biofuel feedstock resources including woody biomass; biomass from
agriculture sector; biosolid wastes; algae; purpose grown crops
• Development of biomass conversion technologies and feasibility studies; biomass gasification
and liquid biofuel synthesis (Fischer-Tropsch); biomass pyrolysis/liquefaction and biooil
upgrading; fermentation of cellulose for bioethanol; biorefinery; catalysis technologies for
biofuel synthesis and purification
• Biofuel analysis
• Sustainability analysis of the biofuel processing chain
• Strategic analysis of complex energy and environmental systems

RECENT MAJOR BIOENERGY DEVELOPMENTS

There are no confirmed new investments in biofuels production in NZ yet, even though the
announcements of the biofuels mandate proposal and the potential closure of NZ’s only oil refinery
have generated some interest. The upfront capital cost of building a biorefinery remains a major
barrier. Some bioenergy projects funded by the GIDI Fund can be found here: Summaries of
approved projects for Government Investment in Decarbonising Industry (GIDI) Fund | Gen Less

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 LINKS TO SOURCES OF INFORMATION
Climate Change Response (Zero Carbon) Amendment Act 2019: https://environment.govt.nz/acts-
and-regulations/acts/climate-change-response-amendment-act-2019/

Sustainable Biofuels Mandate consultation: https://www.mbie.govt.nz/have-your-say/increasing-

the-use-of-sustainable-biofuels-in-aotearoa-new-zealand

Industry Transformation Plan for the Forestry and Wood Processing sector:
https://www.beehive.govt.nz/sites/default/files/2021-04/Future%20of%20Forestry%20Booklet.pdf

Phasing out fossil fuels in process heat: national direction on industrial greenhouse gas emissions
consultation document - https://environment.govt.nz/publications/phasing-out-fossil-fuels-process-
heat-consultation-document/

Summaries of approved projects for Government Investment in Decarbonising Industry (GIDI) Fund |
Gen Less: https://genless.govt.nz/running-a-business/co-funding-and-support/business-co-funding-
and-support-programmes/government-investment-in-decarbonising-industry-gidi-fund/summaries-
of-approved-projects/

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The IEA Bioenergy Technology Collaboration Programme (TCP) is organised under the auspices of the International Energy Agency (IEA) but is functionally
and legally autonomous. Views, findings and publications of the IEA Bioenergy TCP do not necessarily represent the views or policies of the IEA Secretariat
or its individual member countries.