Funding to reduce climate emissions from commercial buildings in NZ

Funding to reduce climate emissions from commercial buildings in NZ

New Zealand Government funding will allow commercial building tenants and owners to improve the climate and energy efficiency of their buildings, Minister of Energy and Resources Megan Woods has announced.

The targeted programme will help commercial building owners or tenants to install and upgrade to cleaner, smarter, energy-efficient and low emissions heating.

“We want to partner with businesses to ensure commercial office buildings are largely powered by renewable energy and the programme is a critical part to achieving this,” Megan Woods said.

“The ‘GIDI: Commercial Buildings’ funding helps businesses overcome a capital hurdle that can prevent investment in clean equipment with the highest efficiency rather than continuing to rely on less efficient alternatives.

“The commercial building sector produces around 2 MtCO2 annually, [1] or 6.4% of our energy-related emissions, and this programme will help speed up the replacement of fossil fuel boilers that are not yet at the end of their life and would otherwise remain in service for years.

“We know there’s a growing list of businesses that are keen to get going and decarbonise their operations and this fund is designed to support that transition.

“Many of our commercial buildings heat their spaces and water with coal, diesel and gas when we have the tech, like electric hot water heat pumps, that would significantly reduce these emissions.”

“New Zealand’s commercial buildings use 21% of the country’s electricity annually – which costs businesses approximately $800 million every year, so more energy efficiency will save businesses money in the long term, and support a more renewable and resilient grid,” Megan Woods said.

“The benefits of the GIDI fund are already being realised across New Zealand. So far, we have co-funded 67 major industrial decarbonisation projects, including a major partnership with NZ Steel. 22 of these are already complete or being commissioned right now with all set for completion by December 2027,” Megan Woods said.

Notes for editors:

  • GIDI: Commercial Buildings has been allocated $40M from the $650M Government Investment in Decarbonising Industry (GIDI) Fund, administered by EECA (Energy Efficiency and Conservation Authority).
  • GIDI: Commercial Buildings, and Industrial are open now. Find out more on EECA’s website.
  • GIDI: Commercial Buildings co-funding will be allocated on a first-in-first-served basis and will initially be open until 30 June 2024, if not fully allocated prior.
  • GIDI: Commercial Buildings co-funding focuses on the replacement of fossil fuel boilers with hot water heat pumps. This technology is a highly efficient, proven, solution for decarbonisation and can lower running costs – even when compared to natural gas.
  • The high efficiency of heat pump technology powered by New Zealand’s mostly renewable electricity generation enables a low-carbon way of generating heat and hot water for commercial buildings.
  • The programme may also support projects to replace fossil fuel boilers with biomass boilers where there are proven barriers to electrification.
  • Funding is for the replacement of fossil fuel boilers in existing buildings and excludes new buildings.
  • Total project costs must be at least $300,000 and co-funding will be limited to a maximum of 50% of eligible project costs.
  • Co-funding is only for capitalised project costs, not operating costs and projects must be fully commissioned and operational within two years of application approval.
  • GIDI: Commercial Buildings follows the launch of the five-step Commercial Buildings Sector Decarbonisation Pathway, which provides New Zealand commercial building owners and facilities managers with free access to tools and resources, designed for the sector by industry experts.

About the GIDI Fund

  • The GIDI Fund supports energy efficiency, and the switch from fossil fuels to cleaner renewable energy sources across the industrial and commercial sectors.
  • GIDI is part of the government’s Climate Emergency Response Fund (CERF) and is funded via proceeds from the Emissions Trading Scheme. A total of $650m ($1b over 7 years) was allocated as part of Budget 2022.

[1] Calculated from EECA’s EEUD  and using the 2020 emission factor for the consumption of purchased electricity published by the Ministry for the Environment

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