Labour & Green Steel Deal highlight what State can do to seriously reduce emissions


Government announces massive emissions-cutting deal with NZ Steel, Contact Energy

The Government has announced New Zealand’s largest single emissions reduction project, with a deal that will subsidise a new “electric arc” furnace for NZ Steel’s Glenbrook plant.

The three-way deal, between the Government, NZ Steel and Contact Energy to provide flexible and cheaper off-peak power to the steel giant, has been hailed by all three parties.

The new furnace– to which taxpayers are contributing up to $140 million through the Government Investment in Decarbonising Industry fund (GIDI), will dwarf the other Government projects.

The total cost is expected to be $300 million.

This is an enormous disruption to emissions and highlights what can be achieved when the State works with Industry to specifically reduce the very emissions that we see causing the catastrophic climate change storms that are currently battering us.

The NZ Right have been quick to claim this is taxpayers money being spent to prop up a corporation but the money is from a specific fund, the Government Investment in Decarbonising Industry fund, that is a scheme set up specifically for this exact type of adaptation!

This is the State and Industry working together, this is what regulated capitalism is supposed to look like! Pretending this is corporate welfare or ‘socialism’ only underscores how stupid the person claiming this is.

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This is what we should be doing more of! The State stepping in to make big investments in decarbonising our economy.

While the Right complain, moan and drag their heels, the climate gets worse.

The only people screaming against this are climate deniers.


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  1. LOL. Shouldn’t you just force NZ Steel to de-carbonize? C’mon Bomber this was years in the making with NZ Steel’s parents extracting the maximum they could will threats of exit and shutting down. We shouldn’t be celebrating corporate blackmail masking as welfare.

    And yet again nobody want’s to address the elephant in the room – soooooo what is the end cost to joe-public in terms of electricity costs given there has been no corresponding increase in electricity generation and supply. So if electricity costs increase by 5-10% when this is operational who really suffers.

    Corporate NZ really does see this government coming…..

    • Firstly, if the partnership investment wasn’t done, NZ Steel would likely have shut up making steel in NZ (as large investment is needed in the next few years), and moved to import rolled steel from its parent Mill. Loss of many high paying, heavily unionised (and well paid) jobs in the Pukekohe region.

      Secondly, this deal locks in a strategic resource (steel production), relatively sheltered from external inputs. If a large scale war was to occur globally, NZ would have no access to steel without such a facility.

      Thirdly, as more renewables come online, the new asset will be able to scale up production to consume excess production, say during extended high wind times. It can also scale back use during high load scenarios.

      Fourthly, this will result in NZ using some of the lowest co2 per ton steel in the world.

      Finally, it looks like there isn’t a working group or investigation report due, so the odds of the project actually being delivered is high.

      • So if you had an asset worth hundreds of millions of dollars with a sustainable income would you just close it down? It was a game of chicken where the government blinked.

        As for your third argument – what new renewables? Are you telling me this is going to be powered up by windpower. Lol fucking lol. Is the whole Taranaki Basin going to filled by wind turbines?

        Lowest co2 per tonne of steele. Isn’t that the same argument that some on the right argue regarding west coast coal. So steel ok but coal not.

        I’ve got some magic beans to sell – Cuckhold BMW Jimmy brought the last ones – you keen on these?

    • So Frank does the primary sector see the National government “coming” or in fact any other business that has National removing regulations to subsidise their business? It might not be a direct cash investment but the NZ public ends up paying for letting businesses do what they want

      • Same principal applies Wheely to LabourLite. I fucking hate corporate welfare regardless who is steering it. It demonstrates just how weak our public sector and our politicians are regarding the word “no”.

        Trust me the losers in this will be the electricity end users who will have lots of bullshit price increases between now and when this is implemented.

        It amuses me how utter fucking tribal people are with corporate welfare. We penny pinch with building a new hospital in Dunedin yet throw over a hundred million at a billion + dollar business when overseas owners.

          • Oh it is. It’s giving a overseas-owned business with a market capitalisation of over 1 billion over a 100 million. That is the definition of corporate welfare.

      • Yes agree but this is a political stunt by Labour/Greens an extremely expensive stunt at the expense of the taxpayer.What contribution will it make to emissions? Nothing.
        Homelessness and poverty play second fiddle to this political stunt.Shameful.

  2. It’s a Labour Government sponsored Ponzi Scheme!

    “Ok! I’ll give you $140m because you’ll go out of business if you have to pay for it yourself and then we’ll give an additional $30m if you do a good job! FFS!”
    Whatever has happened to Capitalism these days when you can decide to opt in or out as and when you decide?

    Or am I missing something? Maybe? Is it Crony Capitalism that’s in play here? Hmmm?

    • Corporate welfare which they could have walked away from last year but chose not to, thinking it would affect their chances in the election.

      Also they can ponce on about sorting climate change with electricity but it cannot replace existing methods no matter what we do. For green energy to work, low cost, large scale energy storage, sufficient to keep the lights on for several days at a minimum is essential.

      “The current cost of battery storage is about US$600,000 per MWh. For every MW of wind or solar power in California, $120 million would need to be spent on storage.

      Wind farms cost about $1.5 million per MW so the cost of battery storage would be an astronomical, 80 times greater than the cost of the wind farm!

      A major additional constraint would be that batteries are simply not available in the quantities needed. Not enough lithium and cobalt and other rare minerals are being mined at the moment. If prices get high enough supply will expand, but prices are already ridiculously, unfeasibly high”. (To say nothing of the carbon footprint resulting from mining)

      Pumped hydro storage like Onslow also is very expensive and at scale completely unfeasible because of the topography required and energy expended ratio.

      So it means running coal or gas fired plants as a backup. Except for gas to run under these circumstances, a particular type of gas station is required that can be turned off and on quickly but wouldnt you know it, this type produces double the emissions of an ordinary gas power station.

      Basically the whole green new deal is a bust and by going down these avenues NZ will be forced into nuclear power in order to achieve net zero. Despite the hoo haa about next gen reactors, the spent fuel is still a massive problem and as to safety, we are not called the Shakey Isles of Oceania for nothing.

      Is it too much to ask that we get a government who is capable of understanding a topic and planning accordingly?

      • Thirdly, as more renewables come online, the new asset will be able to scale up production to consume excess production…
        Steel mills, rather like large power plants, can’t just be tuned up and down. And your comment about more renewables coming online misses this point made here..
        So it means running coal or gas fired plants as a backup.

        Exactly. The unreliables don’t even replace this stuff – unless you want blackouts. That’s one of the reasons that power prices increase so much and relentlessly the more renewables are in the mix despite the wind and sun being free. They run parallel to the traditional system to cope with the demand. Take a look at this graph of Germany’s power in April, and the gaps between demand and wind. BTW, that’s part of an article where the New York Power folks have admitted that they have no Plan B as they shut down both nuclear and fossil while pushing wind – and shutting the Indian Point nuclear plant already increased their CO2 emissions from 77% to 89%.

        Oh yeah, to reach Net Zero 2030 they need to get wind/solar from 6% to 43% (gas) by then.

        Idiots. Given that where already at a huge renewable amount thanks to hydro and geo we’re in a better place. But 100% renewabklw will be a killer and I don’t think we want to be in South Africa’s position of exceeding their CO2 emission reduction targets only because their plant is breaking down.

      • Very good points Fantail. All spot-on apart from your view of nuclear safety. It is by far the safest form of power generation ever devised.
        The classic example is that more people have died falling off roofs installing solar panels than have died in nuclear accidents from the start of that technology.
        As for waste, it’s not an absolute thing. All the options produce waste, of differing types. The real problem is that the average punter is uneducated and thinks it’s witchcraft.

  3. Giving lot of money to one of the richest people on the planet who owns a billion dollar company? May, lucky we don’t have any need for that money here, but then we can’t expext rich peoples profti making businesses to carry the cost themselves. Tax the rich – middle class on the unrealized gains of their overinflated value on their properties. Now that is the way to go.

    “The money will go to NZ Steel, based in Glenbrook just outside Auckland and owned by multinational company Bluescope, which alone makes up about 2 per cent of the country’s entire greenhouse gas emissions.”

    “New Zealand Steel is part of the BlueScope Group, a strong and successful global company employing over 16,000 people within more than 100 facilities in 17 countries.”


    But i guess the profits of Bluestone were down by 1%, so of course all the governments of the world need to pay them to reduce the emissions that this company creates by doing business.

    NZ Steel is not even a NZ company anymore, wholesale owned by Shareholders………whoop whoop, what could have NZ done with these millions? Build a few houses, stock a few foodbanks, pay a few dentists visits, hire a bunch of nurses, doctors? But extra money to shareholders…..hold my bag!
    But nah, lets rejoice that we are paying 40 million to a big international on the sharemarket listed company to ‘reduce’ their emissions, something that Government could have legislated to be done on the companies own dime.

    I am sure that this bold and authentic move from the Labour and Green party will make anyone in this country who does not have a house, food, electricity that they can afford, good schools, good public transport, good access to medical care feel all better about their hardships, cause its the best the state could do.

  4. We should have got a peice of the company for building them a whole new facility.

    Factories for Australian companies, meanwhile no houses for NZ citizens. It’s not a good look.

    And also while we reduce the nations carbon emissions, will this actually effect the planet? We’re moving from making new steel to recycling old steel – it stands to reason someone on the planet will take that same old source of iron sands we’re no longer buying and turn them into new steel, it’s not like we shut down a mine, or eliminated the uses for steel.

  5. Last month the same company announced a change in their Victorian (Australia ) plant to electric power . It would be interesting to know if they were subsidised over there . It is a good move but why do we need to help a company that made 2 billion dollars profit last year with a capital expense.

  6. Will this regulated capitalism, result in cheaper power or cheaper something for some taxpayers some time some where !

    I hope so or else it is just corporate welfare, with some minor savings on the climate front.

    Next they need to do the supermarket s and car industry.

  7. Labour being played by Australians again (think Kiwi Rail and Toll)

    Bluescope bough the Pacific Steel scrap operation (from Fletchers in 2017) based in Otahuhu and is relocating that to Glenbrook. Now they get $140M in subsidy to load the cost of the relocation onto the tax payer.

    Locals get a massive increase in road traffic with scrap trucks carving up the road even more. A road that regularly sees 40,000 ton (800 truckloads) shipments of Ironsand from Glenbrook to the Port of Auckland.

    That recycled steel is only good for reinforcing bars and fencing wire . It wont diminish the carbon footprint of the steel mill one iota. Steel used in the rolling mills, pipe mill and casting bays will still be made from Ironsand. The existing operation already generates it’s own electricity.

    This is another smoke and mirror Labour deceit project.

    • Ridiculous.
      The only way to debate the woke is ridicule.

      At least now we can budget for a railway track upgrade and the business case may well stack up.

      • “The only way to debate the woke is ridicule”
        Absolutely, as it is other muppets including the failing cult of the neo-liberal. Unfortunately we’ve even lost the capacity to do that.

        Fear not tho’. We continue to be a suphusticated nayshun that punches above its weight with a political and managerial class we probably deserve.

        • And we keep voting for them. Even withholding your vote counts.

          Not taking your place on a podium when you feel cheated sends a very strong message. I can recall the first time I saw the black fist on the podium. Tommy Smith! 1968 Olympics.

          “End racism in sport.” Others read something else into his action.

      • The subsidy is necessary to ensure NZ Steel can still sell steel at a competitive price. This technology, especially the capital, is more expensive than staying with existing coal fired technology.
        Sure, you could legislatively force them to do it, but they would probably close the plant and make the steel elsewhere, where they not face such a requirement.
        In my view a smart decision by government. Keeps steel production in NZ. Reduces CO2 emissions, not just locally but internationally, since there is no incentive to substitute cheaper production elsewhere.
        National and Act need to get smarter on their climate change policies. Saying “no” all the time to all mitigation measures is not a winning policy.

        • And wealthy people will just roll over and pay wealth taxes to impunity.

          Steel outsmarted a government desperate to make gains on Net Zero. Thankfully we will now all be safe from flooding caused by climate change. Yeah, right.

        • Amazing. For those Green/Labour voters, observe that this comment comes from a former National Party Cabinet Minister.

          Meantime, from an actual economist, the sort who would have not only supported Thatcher but truly understood what her philosophy was about, rather than some National Party pretension:
          “‘The project is forecast to have an abatement cost of $16.20 per tonne.’:

          “Well that’s it then. Everyone should stop investing in abatement projects that are massively cost effective. Instead, beg government for a subsidy to do it. Government Investment in Decarbonising Industry Fund [GIDI] will pay for it.”

  8. So a steel mill, which was entirely built with taxpayer money, and based upon government research (at the D.S.I.R.), was then looted by a huge multinational company (Broken Hill Proprietary) — and now the government is giving corporate welfare to its spun-off transnational subsidiary (BlueScope)?

    Did every taxpayer receive cheques in the mail when the enormous assets they owned were flogged off?

    Where are all the additional power stations to supply this mass electrification of the entire economy?

    Is the Government planning on handing out cash to foreign automakers, to make up for the fact that their backward economy cannot even afford to import enough electric automobiles, let alone manufacture them?

    How are all the mine workers doing, now that the Government wants to crush the mining industry by banning most exploration? (Even though electrification will inevitably REQUIRE new mining, somewhere in the world.)

    The country has become a laughing stock.

  9. Are you 100% sure this is going to make any difference?

    Or is this the national equivalence to virtual signalling? For what?

    • Let’s see.
      Subtract 1% of NZ emissions from the Indian and Chinese emissions…..
      …. …….. …… …..
      We will be safe from sea level rise caused by anthropogenic climate change. Done and dusted.
      Let’s do this.

      In conclusion: “Anyone saying anything different is a climate denier.”

  10. Labour’s Corporate Welfare Wellbeing Subsidy Budget is proof that Labour is addicted to Corporate Welfare.
    $140m plus an additional $30m if they build it properly, to an Australian-owned Steel company in Waiuku.

    There is a common theme here.

    A lot of these businesses use to be owned by the NZ Government right up to the time they sold them! Because they were said to be unprofitable! Go Figure!!

    It’s also proof that Climate Change is just a good old Ponzi scheme. Green Washn capitalism you dummies!

    • Denier. Your opinion does not count.
      Your argument will confuse the converted.
      Off with your head.

    • Credit where it’s due, this government could have consulted and not built two and a half cycle bridges for the same money.
      Or for eight times the outlay they could provide a single extra mental health bed.
      Sure taxpayers subsidise a private business they used to own and everyone’s electricity will get dearer, sure the ETS means emissions don’t drop the carbon price does and someone also just gets to emit more.
      But think of the optics!
      Three more years!

    • “It’s also proof that Climate Change is just a good old Ponzi scheme. Green Washn capitalism you dummies!”

      Not quite, climate change is real (but is multifactor and should be considered under the larger umbrella of habitat destruction), the solutions proposed to combat it are a good old Ponzi scheme and green washing.

    • “It’s also proof that Climate Change is just a good old Ponzi scheme. Green Washn capitalism you dummies!”

      Green washin, created by the same billionaire class that gave us Neoliberalism at that, but unlike the latter, Green washin has become a religion among the Left. Yet another brilliant elitist class strategy goes to plan….

    • It’s not just Labour, I do remember Nationals golden boy John Key doing a deal for a convention center for Sky City. The tax payers pay for a convention center and the casino pockets all the profits, no risk to the shareholders.

      That been said, this is corporate welfare. And only shows that successive governments, of all stripes are absolutely addicted to the crumbs thrown to them by our corporate overlords.

  11. Got it, we give them money to carry on polluting, make huge profits, take money out of New Zealand, and then sell steel back to us? What next, giving Australian banks a few hundred million to wokenise? Are these companies like the local standover men who will burn down your business if you don’t pay the extortion? If we have the money to splash around for new furnaces, why don’t we start our own furnace plant?

  12. The positives:
    >NZ gets to make more steel products, which will reduce the need to import them.
    > NZ Steel makes more revenue, employs more people and so pays more tax.
    > We’re no longer burning bunker oil on ships transporting scrap steel back to China.
    > It’s a great project for some of my engineering consultant mates and boosts the local technical capabilities.

    The negative:
    > It’s not really reducing carbon emissions significantly because the power for the furnace has to come from somewhere and the only real option is Huntly, burning Indonesian coal strip mined out of a rain forest. Before you say that Contact doesn’t own Huntly, all the power generators have back-end contracts to supply each other should demand exceed their capacity. This highlights the failure of the government to provide significant new generating capacity in order to pave the way for large-scale electrification. (Hint: Nuclear is the only viable option)

  13. What all of you ‘what’s the point types’ never take into account is the expectation of offshore buyers and their sourcing commitments. I look forward to the day someone like Nestle says do something about your emissions or we will buy milk powder elsewhere. This will happen and I hope the like of groinswell choke on it.

  14. I am counting the days to 14 Oct, when all this non-sense WILL stop… but nothing will be able to undo the damage already done to the country and its people.

  15. I have never been a climate change denier but I am deeply opposed to this hand out when we can’t feed or house the poor and dispossessed. It is a disgrace, corporate welfare.


  16. At least money better spent on that than susidising EV virue signallers.
    Also another proof how blackmailing works.
    BTW “Green steel” it will be not. Less black, yes.

  17. Hey Hey, and where is the electricity coming from to fire this new arc furnace?
    From Huntley just dow the road of course!!
    Fired by Indonesian coal
    What a joke!!
    Burn more coal at Huntley to use less coal at Glenbrook
    Is that what Greens call that carbon neutral?

  18. VERY interesting reading here, document from 2017 issued by NZ Steel warning that carbon costs will shut down the plant…

    and what do we see now? When the carbon costs hit the industry (less than 5 years after this document was released to the officials), public money is used to make this private investment “competitive”. This is nothing else than subsidy, disguised under a different name.

    In the document it clearly states that NZ Steel voluntary shut down one of the electric furnaces few years back. On page 4/26 it states in bold letters that “There is currently no technology anywhere in the world that allows for steel to be made from raw materials without coal”. Maybe someone should find a way to get this into the politicians’ heads so they do not waste the taxes on chasing these wind mills?

    to whoever will say this is not tax money but it is from a special fund – I say that government does not have any money, nor it make any (unless printing them) – so anything they spend is ultimately tax money.

  19. Is this still the NZ First provincial growth fund money ! Because we are broke and can’t afford to give millions in donations to a Aussie billionaire.

    • They need money.
      The people lending us this shit has lots, have some.
      Just do not let us find out that you are using our handout to make yourself and others wealthy.

  20. This will be the second arc furnace to be built by the taxpayer at Glenbrook.
    In the ’80s a massive arc furnace was built for the Glenbrook Steel mill at tax payers expense. After privatisation the arc furnace was gutted and all the heavy duty high voltage cabling was sold for the price of the copper. It had been determined by the private owners that it was cheaper (and safer)* to make steel from the raw materials than it was to recycle scrap steel. I worked on building the arc furnace and also worked on it when it was operating. It was a highly labour intensive process. Wagon loads of scrap steel were delivered to Glenbrook by train and unloaded by a giant gantry crane that spanned an area of two football fields. The mountain of scrap steel piled up under the gantry crane to feed into the arc furnace was enormous. Any copper wiring in the old washing machines or car bodies that winds up in the finished product contaminates and weakens the steel. This contamination can be fixed with expensive chemical additives, but better if the copper is removed before it enters the furnace. A large labour force of mostly PI workers were employed to sort the scrap steel and remove all the copper wiring contaminating the scrap. The labourers were allowed to keep all the copper they retrieved for themselves to on-sell to scrap metal dealers as a bonus and incentive. The other purpose of this workforce was sort the scrap for enclosed metal containers especially any containing water. If any scrap water containers went into the arc furnace the water instantly turned into super heated steam resulting in huge explosions. Once a super heated steam explosion was so powerful that as well as blowing out all the lights lifted the overhead gantry crane that carries the ladles of molten steel off its rails. Luckily the crane never fell, but the crane driver and a trainee who was with him had to feel their the way down to the ground level in pitch darkness. More commonly these steam explosions saw the pigeons that nested on the overhead beams being stunned and falling the ground.
    Another reason the arc furnace was scrapped is that with the burning of coal to smelt the iron sand large amounts of waste heat were created, this heat could be tapped to generate electricity, through a process called Co-generation. After the arc furnace was scrapped the owners had a their own power station built on site using the waste heat from combustion of the coal used to smelt the iron sand in the kilns.
    My question: What happens to the Co-gen power station if Glenbrook stop burning coal to smelt iron sand?
    Will Glenbrook keep burning coal just to keep generating their own electricity?

    • Best comment on this thread by far. Thank you.

      My understanding is that coal is still needed to smelt the iron sand for new steel and there is significant R&D going on overseas to see whether methane can be used to replace the carbon monoxide component from coal. Still more than a few years away though.

  21. What will save a lot of our transmissions? Railway! What does kiwirail need to make this country a functioning passenger and freight train friendly island or two? New tracks. How to we make new tracks? From steel! So Martyn you are correct, trains are the only serious salvation for a population that doesn’t like to sit still, so as much as this government is failing on what Labour might have originally represented, and should still represent, at least they are lining up a few geese to ensure that our train does not get taken off track by some silly blind minion sheep lemming seventh day adventurer neo liberal capitalisers sitting in (don’t ACT) and naZional parties. This is a good positive story to mix in with the endless doom and gloom that reality intimates!

    • ” What does kiwirail need to make this country a functioning passenger and freight train friendly island or two”
      – A different CEO for a start.
      – Distancing from various lobbyists and ticket clippers, and those with various grand plans they’ve been pushing now for a decade or more and pushing it like pushing shit uphill
      – New rolling stock instead of refurbished cast offs from overseas, and sending our castoff to places where it’d be needed
      – recognising that many local contractors engaged in railway work are pulling the big rip
      – Imagination and looking at alternatives (such as tram trains/ train trams) as a short medium term solution, and things like combined freight/passenger trains
      – and (unfortunately) now importing expertise (because we’ve lost most of it; because our experts have fucked off overseas to greener pastures.
      – probably a resurrected Ministry of Works
      – taking back all and every mothballed and closed railway route since post WWII
      – etc.

  22. Who negotiates this stuff. They need $300 million. Sure but not as an ethereal carbon reduction target. Nothing less than $300 million of shares at decent discount to the market price. What they might exit the country? And let us nationalise the steel mill at a fire sale price.

    Should have let it go the way of AirNZ and then govt pick it up for a song.

    • They dont have casting lines for RSJ or I Beams. Nor do they have the rolling mills to make rails for light or heavy railways. One thing to make steel, another to make product lines that cover a gamete of end needs.

      They can do galvanised sheet to make framing for housing. Make forestry redundant!

  23. Amazing. For those Green/Labour voters, observe that this comment comes from a former National Party Cabinet Minister.

    Meantime, from an actual economist, the sort who would have not only supported Thatcher but truly understood what her philosophy was about, rather than some National Party pretension:
    “‘The project is forecast to have an abatement cost of $16.20 per tonne.’:

    “Well that’s it then. Everyone should stop investing in abatement projects that are massively cost effective. Instead, beg government for a subsidy to do it. Government Investment in Decarbonising Industry Fund [GIDI] will pay for it.”

  24. Economist Eric Cramptom:
    Do not bother investing in low-carbon tech if you are a large emitter. Even if it makes massive financial sense because of ETS prices. Just wait. Then tell GIDI that you have reasons you can’t do it yet and need their subsidies.
    Govt will oblige.
    So dumb. Terrible incentives.

    Heh. But it works. There’s even a former National Party Cabinet Minister on board with this, so all you Lefties should feel confident in this decision.


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