Apr 11 2020

April 2020 update

Proposed coal boiler ban and rising ETS costs will have significant effect

To inform our submission on the Ministry for Business Innovation and Employment (MBIE) 'Accelerating renewable energy and energy efficiency' consultation (as reported in my column last month) and ongoing Emissions Trading Scheme (ETS) reforms, we commissioned the New Zealand Institute of Economic Research (NZIER) to do an independent report on the potential impact of the ETS on covered crops.

This research was prepared by Principal Economist Chris Nixon and outlines the effect ETS is having on the covered crops industry.  It built on data collected in 2018 with new interviews specifically about the impact of changes to the ETS.

The report’s main findings are:

  • The industry is struggling to deal with increased fuel and labour costs as a direct result of current policy settings (and prior to MfE 2019 consultation document suggestions).
  • Using a blunt instrument such as an increasing carbon price with little time to react is likely to dramatically downsize the industry shedding jobs and reducing employment opportunities in the regions and South Auckland. Local production will be replaced with imports.
  • New potential industries such as cannabis are likely to be difficult to move out of the black economy because of ETS charges.
  • To maintain a viable covered crops industry a transition strategy with government and industry working together is required to:
  1. develop a detailed understanding of how the industry can move away from fossil fuels;
  2. examine how biomass production can assist the industry at the regional level;
  3. assist businesses with grants to move from coal/gas boilers to biomass boilers. 
  • Industry participants have been caught in a cost squeeze between government regulation (ETS charges and increases in the minimum wage) and declining real covered crop prices. The hardest hit are small producers in the South Island because of their limited access to alternative forms of fuel.

The report can be downloaded from https://www.tomatoesnz.co.nz/hot-topics/ets/ or by contacting us.

 

How to sell your ETS units

Many growers of tomatoes, capsicum and cucumbers have been applying annually for free Emissions Trading Scheme (ETS units) under the Industrial Allocations scheme in your Emissions Trading Register accounts.  The application deadline is 30 April each year. But once you have the units, how do you realise their value?

There are a couple of options for small growers to sell their units. Two options are selling them to an energy provider (yours, or another), or sell them via a market trader.

Tailored Energy Solutions, based in Rolleston are a solid fuel energy company that will purchase carbon units at the market rates. The purchased carbon units are traded back to the supplier coal mines to meet their ETS obligations on coal sold.  They are a Carbon Trader and make the process as simple as possible via a Buyer Created invoice.

Contact Glenys Perkins or Jacqui Grafton at Tailored Energy Solutions Ltd: accounts@tesl.co.nz

There are other traders or trading platforms that specialise in buying and selling New Zealand Units, including

•OM Financial Limited; www.omf.co.nz

•Carbon Market Solutions; www.carbonmarketsolutions.com

•Carbon Match www.carbonmatch.co.nz, which is an online platform for trading units.

Units are currently trading for around $25.

 

Hazera seeds

Hazera seeds provided support for Helen’s recent attendance at the Global Tomato Congress. Hazera is bringing its new varieties to NZ.

Hazera already has a long history in tomato breeding.  In 2011 Hazera decided to invest in high tech breeding, especially for tomatoes grown in glasshouses. Tomatoes ‘Amastera’ and ‘Rotera’ are now tested globally in the main high tech markets.  

Big cluster

Was first tested in the Netherlands on a small scale in 2019, providing the first data. The Big Cluster (27468) on the vine with an average fruit looked very promising with a weight of 165 grams exceeding the actual standards.  Higher yield potential per metre square, an excellent summer quality and very early as well was noted. The cluster presentation is authentic and very attractive.

Specialty

In the coming year Hazera will start testing a mini plum 48240 (10-12 grams) with an excellent taste and level of production compared to the standard varieties of this type.

Hazera Seeds

Hazera is a global leader in the seed industry. Hazera brings expertise, commitment and support, combining decades of experience with state-of-the-art technology.  Hazera breeds, develops, produces and markets varieties and seeds in a wide range of vegetable crops around the world.

Hazera’s headquarters are situated in Israel and the Netherlands. For more information contact  Steve McArthur steve@vigour.com 021677889