Lignite to diesel plant could cost taxpayers billions PCE
Post on: 2011-08-25 By: admin
Solid Energy's plan to turn lignite - low quality coal - into
diesel fuel could costs taxpayers billions and harm New
Zealand's clean and green image, the Parliamentary
Commissioner for the Environment (PCE) warns.
"Whatever you do with lignite - whether you burn it directly
or turn it into something else - you end up with lots of
unwanted carbon dioxide - greenhouse gas," PCE Dr Jan Wright
told members of Parliament today.
Although state-owned Solid Energy had stated that it would
take "full responsibility" for emissions, she said, she was
puzzled as to what this would actually mean.
"Under the current rules in the Emissions Trading Scheme, the
taxpayer could end up subsiding a lignite-to-diesel plant to
the tune of a quarter of a billion dollars per year," Dr
Taking full responsibility could also mean that the company
would be refusing to accept any subsidy in the form of free
carbon credits or it could be storing all the carbon dioxide
emissions associated with these projects - below the ground
The two latter options Dr Wright thought were rather
unlikely, as they would make the company less competitive.
"While we can do the calculations for the processes that
produce the carbon dioxide, we have no information in any
detail how they would deal with that," she said.
"Assuming that they would spend that money, that their
competitors will not, the one way is to compress the liquid
carbon dioxide and store it underground, the other way is to
There were only five plants in the world using the
compression process which was still in the experimental stage
and if the company planted trees the country could end up
New Zealand was already trailing behind commitments it made
in Copenhagen, to reduce emissions by up to 20 percent below
At the moment government projections were 30 percent above.
The lignite-to-diesel plant planned by Solid Engery would
increase the size of the gap by 20 percent.
A second lignite-to-diesel plant another company, LM
Mining, is signalling to built would add another 20 percent.
"That's a 50 percent increase in the gap from two
lignite-to-diesel plants," Dr Wright said.
New Zealand could buy carbon-credits offshore to make the
difference, but being so dependent on carbon reductions in
other countries was a poor look for a country that branded
itself internationally as clean and green.
"An alternative is to buy and import oil as we do now, we may
have some of our own and there are some options for bio
The biggest gains though would be made in efficiency of use.
"I think what will happen as the price of oil goes up, we'll
see a genuine response from people, they will buy smaller
cars and I think we haven't begun to see that yet," she said.
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Article original from: http://www.odt.co.nz/news/national/174093/lignite-diesel-plant-could-cost-taxpayers-billions-pce
