Key Southland transport businesses and industries converting to hydrogen are likely to benefit from a new $32.5m government rebate, announced in the 2023 budget presented by Finance Minister Hon. Grant Robertson on Thursday (18 May).

The rebate, funded through the Climate Emergency Response Fund, is designed to help sectors where decarbonising is hard, diversify the economy of Just Transition regions, and to displace fossil fuels.

While there are two Just Transition regions, Taranaki and Southland, Energy and Resources Minister Hon. Dr Megan Woods said the initiative would start in Southland.

“This initiative will help make hydrogen a financially viable option."

“A green hydrogen rebate will support a small number of early adopters in hard-to-abate industries to reduce their emissions by 150,000 tonnes - equivalent to cancelling out the emissions of hundreds of trucks."

“This Government support will move Southland closer to a renewable energy industry which diversifies the economy, and increases the region’s resilience,” Woods said. 

Woods said the government had set aside a total of $100 million for the rebate, with $32.5 million being available in the first four years.

Southland Just Transition Enduring Oversight Group (EOG) co-chair Neil McAra. Photo: EOG

Southland Just Transition Enduring Oversight Group (EOG) co-chair Neil McAra said the announcement was a great start towards delivering on the region’s Just Transition’s goal of building Southland’s economic, social and environmental resilience. 

“We appreciate the support Government has given the Southland region and look forward to hearing more on the support for Southland Just Transition from the Minister of Energy and Resources Dr Megan Woods when the Minister visits Invercargill next week,” he said.

There are currently 22 hydrogen projects, research and agreements in Southland (as at Apr 2022), according to the Ministry of Business, Innovation and Employment.

Invercargill based HWR Group, one of New Zealand's largest privately-owned transport companies, have been working on a hydrogen fuel solution for the transport industry since 2022.

They are currently trialing a truck fitted with a conversion unit, which allows the vehicle to run on both hydrogen or diesel fuels.

The company is also well advanced with plans to install a electrolyser, a machine that produces hydrogen from water through a process called electrolysis, at it's Allied Petroleum fuel stop in Gore.

Meridian Energy, Japanese ammonia importer Mitsui and Australian resource firm Woodside Energy (WE) are currently working on a Southland-based green hydrogen and ammonia project.

Radio New Zealand reported (29th Nov 2023) WE chief executive Meg O'Neill as saying a large-scale export focused hydrogen and ammonia facility in Southland would accelerate the development of a domestic hydrogen economy and strengthen New Zealand's platform to contributing to decarbonising the transport and industrial sectors.