Budget 2023 – no frills, bread-and-butter, Energy budget

Budget 2023 continues the Government's ongoing efforts to foster a resilient, low-emissions economy. Some of the key energy-related initiatives announced in Budget 2023 include:

• Accessibility to climate-friendly transport options being expanded, with continued half-price fares on public transport for Community Services Card holders, and now permanent half-price fares for under 25 year-olds and free fares for children under 13.

• Investment into electric vehicle charging stations will expand the nationwide charging network, including in rural communities.

• A grant scheme funded through the Climate Emergency Response Fund (CERF) to encourage uptake of low-emissions heavy vehicles.

• The early adoption of hydrogen will be rewarded by subsidising businesses in hard-to-abate industries through a green hydrogen rebate. Starting with Southland, the $100 million that has been set aside for the rebate will help to make hydrogen a financially viable option.

• Funding will be made available to install a renewable energy system at the Chatham Islands (and potentially Stewart Island).

• Private investment into low-emissions activities through New Zealand Green Investment Finance Limited will further incentivise climate innovation.

• Expansion of the Warmer Kiwi Homes programmes, to:

  • Deliver 26,500 insultation and heating retrofits per year for the next four years.

  • Add energy efficient hot water heaters and LED lights to the programme.

  • The scheme's expansion will be funded with $402.6 million over four years.

This opens some concrete opportunities for industry to participate in the continued transition to a low-emissions economy. However, like the rest of Budget 2023, the initiatives are mostly focussed on energy transition at the household level, rather than providing for step-change at a systems level.
 
Other than the investment in hydrogen, the absence of significant Government incentive for industry to transition to a low-emissions economy will mean that New Zealand's transition will need to continue to be driven and funded by private investment.
 

This article is intended only to provide a summary of the subject covered. It does not purport to be comprehensive or to provide legal advice. No person should act in reliance on any statement contained in this publication without first obtaining specific professional advice. If you require any advice or further information on the subject matter of this newsletter, please contact the partner/solicitor in the firm who normally advises you, or alternatively contact one of the partners listed below.