The Government's gas transition plan will have a wider effect on the hospitality industry, and has been welcomed by industry leaders.
BusinessNZ has welcomed the Government’s announced loan scheme to help commercial and industrial gas users transition, in the face of significant gas price increases and rapidly declining domestic production.
Director of Advocacy Catherine Beard said until now, successive governments have pursued a net-zero goal without a workable transition plan that keeps businesses and jobs intact.
"Whereas GIDI changed the economics of a project at a business-by-business level through government grants, this loan scheme should be more accessible to all businesses that fit the criteria," said Beard.
"As outlined in our latest BusinessNZ Energy Council report, ' The need for Government Assistance in the Gas Transition', we have advocated for a sharp, policy-driven transition in a way that protects jobs, production, and New Zealand’s economic base. This announcement of a conditional loan scheme, ensuring targeted investment, should help businesses to do just that."
Beard said the de-industrialisation of critical sectors has already begun, with the high cost of gas adding to the struggle to remain competitive and profitable.
"Aiding the transition to alternate fuels is a sensible step and ensures New Zealand’s intensive energy users will be around to make use of the surplus we are working so hard to secure. This announcement should prevent avoidable closures, retain capability, and reduce long-term costs to the economy."
The gas transition plan will impact restaurant and cafe operators through soaring operational costs, unreliable supply, and forced equipment conversions. Declining domestic gas production has caused significant energy price hikes. Many foodservice operators and suppliers have been caught in an energy trap, facing erratic supply and surging bills before viable, cost-effective alternatives are in place.
While domestic reserves continue to dwindle, the cost of commercial gas is rapidly escalating.
Although some operators have already switched to efficient electric alternatives, the gas transition would otherwise be prohibitively expensive without targeted subsidies.
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