Ben Fahy learns how biodiesel is made and its role in a lower carbon future. 

In the boardroom at Te Kora Hou, Z’s biodiesel plant in south Auckland, the whiteboard is full of chemical equations, an almost-finished packet of chocolate chip biscuits sits on the table, and Glen Carpenter and Wayne Reid – men with good, solid industrial names; good, solid industrial demeanours; and good, solid industrial outfits – are the happiest they’ve been in a long time. 

After a detailed safety briefing, I put on my glasses and hi-viz and head out on a tour of the plant. Carpenter checks to see if his personal gas detector is working and Reid talks about how the fire systems are able to detect invisible flame (methanol, one of the ingredients used in the process, burns clear). 

“We’re in a state of chronic unease,” says Reid, which is a very good attitude to have when you’re surrounded by fuel. 

We scale the steps beside the huge tanks that hold the biodiesel and when we reach the top we gaze out over the industrial hub of Wiri. Hundreds of cars and trucks zip down the southern motorway, planes fly overhead, a Firth plant next door noisily makes concrete. You can almost, as David Lange might say, smell the carbon dioxide on the city’s breath, so it’s hard to stomach the fact that the plant isn’t currently producing anything. 

In May 2020, around five years after construction of the plant kicked off, it was forced to go into hibernation, with around 15 employees made redundant. Z had invested close to $40 million in the plant, from the design and construction to the tweaking required to make a high-quality product at scale. But tallow, an inedible byproduct of the meat industry that makes up 95% of the ingredient cost for its biodiesel, had pretty much doubled in price due to global demand from suppliers selling into subsidised biofuel markets, and the international diesel price had dropped significantly due to Covid-related lack of demand. 

“As long as it could break even, the business would go for it,” says Reid, the biodiesel operations manager. “But it just didn’t stack up. We were losing money by selling it.” 

A few weeks ago, however, there was a glimmer of hope. 

“I was up north fishing when Wayne called me and said the prime minister and a few others were coming for a visit to the plant. We didn’t know much about it,” says Carpenter, the biodiesel lead operator. 

During that visit, Ardern, transport minister Michael Wood and climate change minister James Shaw announced a range of measures aimed at reducing the carbon emissions of our transport fleet, from eventual electrification of the public transport network to tougher emissions standards for vehicle imports. They also agreed in principle to a mandate for a lower-emitting biofuel blend to be used across the transport sector. 

Not long after, the Climate Change Commission released its draft report and Transpower released its Electrification Roadmap, both of which emphasised the need for a reasonably acrimonious divorce from fossil fuels and a much better relationship with electrification and other fuel sources like hydrogen for heavy transport. 

It’s hard to imagine a company that makes most of its money from selling prehistoric trees and animals that explode in our engines being very excited about looming decarbonisation. In this particular divorce settlement, they’re likely to lose the kids, the house, the bach, and all the good silver. But Z chief executive Mike Bennetts has openly talked about how the company can play a role in speeding up that transition – and biodiesel is a solution that already exists.

Lighten the load

You can make biodiesel out of any sort of fat, says Reid. Whalers used blubber in their lamps. Some farmers mix up batches to use in their tractors or furnaces. And occasionally you see stories of people going around restaurants slurping up the oil to eventually use as fuel. For training purposes at Z, staff actually turn vegetable oil into biodiesel so they understand what the pair say is a relatively simple chemical process. 

Carpenter brings out three vials that show what it starts out as (much like lard) and what it ends up looking like (much like water). When it is added to a tank of standard diesel at a five percent blend rate, it has around four percent fewer greenhouse gas emissions than a tank of regular diesel. Running at its capacity of 20 million litres per year, the plant is able to provide biodiesel that is the equivalent of taking 17,000 diesel vehicles off the road. 

Reid says if we stop making diesel vehicles now, “we’ve still got 50 years of diesel vehicles around”. The Transpower report also mentioned boilers used for ‘process heat’, which can take even longer to replace than vehicles as they’re often a bigger investment. 

“We need different energy sources for different uses,” Reid says. “In ten years, I see lots of electric and hydrogen vehicles, and a biodiesel additive in every fuel to reduce the carbon footprint.”

Paying the price

The only place in the country you can currently fill up with any of the biodiesel Z produced before pausing production is the Highbrook truck stop in East Tāmaki (this is mixed with imported biodiesel from Australia to ensure supply). Just two big business customers – NZ Post and Dempsey Wood – are currently willing to pay for the more expensive Z Bio D option for its fleet. 

“I don’t think people are aware of it. It hasn’t been a thing. We haven’t rolled it out far enough for it to be well-known in New Zealand,” says Reid. “But the more it’s in the public eye and the more the prime minister and high-profile companies like Air New Zealand talk about it, the better.” 

Aviation is (or was, before the world stopped travelling due to Covid-19) responsible for around 2.5% of global carbon emissions, but that’s expected to grow by 2030. Transpower believes domestic flights could be electrified, but long-haul flights are a bigger challenge. Air New Zealand has a partnership with Z to explore options for a sustainable aviation fuel and CEO Greg Foran was also part of the prime minister’s visit to the plant.  

“We would need to build a new plant for that,” says Carpenter. But, as the government regularly points out, we can reduce our emissions and create economic growth: it’s estimated a sustainable aviation fuel facility would create 1800 permanent jobs and require 6000 staff to build it. 

Spinning wheels

A cross-government working group has been set up to engage with fuel suppliers and industry to shape up the details of a mandate, including when it would be realistic to implement biofuel blends.

“We want a timeframe,” says Reid. And when that date and number is set, then it’s a race to see who can find the sustainable supply that’s required. 

“Then it will be a level playing field and the rest of the industry would also need to invest,” says Carpenter.  

There’s a fine line in business between being too early and getting first-mover advantage and last year’s decision appeared to put Z in the former category, but Carpenter says they have built up their expertise and IP to deploy when the time is right, so if – or when – the mandate comes, he thinks the company will be well positioned as a market leader.

“It’s been a trying process. There’s been a lot of trial and error, but we’ve learned a lot in the past four or five years. Our knowledge has increased substantially and that knowledge is now here in the country.”  

Reid says if the mandate for biofuels comes and production needs to reach, for example, 450 million litres to fulfill it, there will need to be some major collaborations (and potentially a lot more imports). 

“But the potential for reduction in greenhouse gases is huge. There are lots of options,” says Reid. “But we will need to make as much of this fuel as we can. Then the challenge will be who can make it the cheapest.” 

The easiest way to do that is through economies of scale, or buying tallow in bulk. In some countries, they grow soybeans to turn into fuel, but Reid believes using a waste product (20 years ago, it was just buried) rather than a potential food source is a much more sustainable approach. But it could also start making biofuels from other ingredients. 

“Having a facility that could take multiple streams of ingredients would be the ideal process. Whatever is around you can blend it in,” says Reid. 

At this stage, New Zealand legislation allows a maximum blend of 7% biodiesel within its diesel specifications. Higher blends can be used, but need to be labelled biodiesel, and customers would need to have the necessary conversations with their vehicle manufacturers on the maximum amount of biodiesel that can safely be used. Many trucks and tractors can run on higher blends of 20% and Z successfully trialled a 20% mix in a ute from Wellington to Ruapehu. 

California and parts of Europe use very high blends of advanced biodiesel (also called renewable diesel). Renewable diesel is more difficult to make, and so more expensive than conventional biodiesel. They can afford to do this because of significant subsidies or other incentives. (They say New Zealand’s biggest supplier of tallow sends most of it to Singapore, with the end product then going to California and Europe; biodiesel that’s not up to vehicle standards can be used in furnaces). 

Step on the gas

There are no silver bullets in the climate change arsenal. Just a range of slightly better options that need a carrot and a range of worse options that need a stick. So how are their optimism levels now? 

“Before the announcement, I was a three out of ten,” says Reid. “Now I’m probably a seven.”

“There’s more positivity than there’s been for a long time and it’s reignited the energy in the whole company,” says Carpenter. “The people who have been invested in it for seven or eight years are very keen to make it succeed. They’re asking ‘when is it starting?’”

A number of countries have already embraced biofuels and clean car standards to try and meet their emissions obligations. And now it seems the New Zealand Government is on the brink of embracing them too.  

“Tell us to go and we’ll go,” says Reid. 

This content was created in paid partnership with Z Energy. Learn more about our partnerships here. 

Good morning and welcome to The Bulletin. In today’s edition: Decriminalisation emerges as potential new direction for cannabis law reform, pokie opponents aghast at Ōtorohanga plans, and National election review delivered.

After the failure of the legalisation referendum, we’re beginning to get a picture of what cannabis law reform could look like. The first story of note came from a Helen Clark Foundation survey, which Stuff reports shows that there is a combined majority for legalisation and decriminalisation. Crucially, 20% of those polled said they voted against legalisation, but would vote for decriminalisation. It’s not clear what proportion of respondents would go the other way (pro-legalisation/anti-decriminalisation wasn’t asked) but it’s fair to assume that would be a smaller cohort.

So will something like this be taken through parliament? It’s not yet clear if any parties or MPs are willing to put up a member’s bill on the issue, and it has not been given any priority by the Labour government. That’s relevant, because new research has suggested PM Ardern’s neutrality on the issue may have lost it for the yes campaign, reports Newshub. It’s a bit of a counterfactual to imagine what an earlier endorsement may have achieved, though the PM came out afterwards saying she had voted yes. Either way, that would probably leave it up to the luck of the member’s bill ballot, if an MP were to put such a law forward.

A question on the subject was asked in the house yesterday, with Chlöe Swarbrick asking health minister Andrew Little about whether the current Misuse of Drugs Act supports government policy on drug harm reduction – he said it did. Follow ups saw Little noting reforms made in 2019 around police discretion. He also declined to rule out further liberalisation of drug laws after a question from National’s Dr Nick Smith, but said the government would respect the result of the referendum. Dr Shane Reti, by contrast for National, told Waatea News earlier in the day that he’d like to see decriminalisation discussed.

The referendum campaign itself continues to be litigated as well, in a way that will be interesting to anyone who follows the movements and tactics of issue-based politics. Legalisation advocate Russell Brown has written a lengthy piece on Public Address, pointing out some flaws in the research mentioned above. He also had a bit of a crack at the No campaign, suggesting that various groups were set up in coordination with each other in order to get around spending rules . “It seems that the cleaving of Family First’s efforts in two was a successful effort to spend beyond the expenses cap for a single group – nearly half a million dollars versus the cap of $380,000.”

In response to this, Family First’s Bob McCoskrie said that his group, and the fellow travellers in Smart Approaches to Marijuana NZ (SAM-NZ) were distinct organisations running distinct campaigns. “I can confirm that at all times, both campaigns acted under the legal advice of the Electoral Commission throughout the whole process. In fact, they probably got sick of us asking questions. We were absolutely committed to acting within the law,” said McCoskrie, who added concerns of his own about the cumulative spending of the yes campaign. He also noted that SAM-NZ disbanded immediately after the election, and that Family First’s campaign was about calling for a no vote on both referendums.

So if decriminalisation was on the table, would the no campaign fire up again for another go? McCoskrie said that would depend on what exact proposal was put forward, and while Family First supported removal of heavy criminal sanctions on low-level users, it believed drug law should primarily discourage drug use, and criminal sanctions are part of that. He also said Family First agrees with the current police approach, describing it as ‘decriminalisation-lite’. It is possible a workable consensus on such a bitterly contested reform might finally be forming – whether many people see it as the best policy approach in and of itself is another matter altogether.

The Problem Gambling Foundation is aghast at plans to change the pokies policy in Ōtorohanga, which would allow more machines to be put in. Local Democracy Reporter Andy Campbell has covered the policy change, which reverses a sinking lid in favour of approvals being possible on a case by case basis – in the process the number of pokies in the community could increase. Currently about $2000 a day goes into pokies in Ōtorohanga, money that can add up quickly in a small and not particularly wealthy town.

We don’t know the full contents of the report, but National’s election review has found “disunity, leaks, and poor behaviour” were a major factor in the party’s poor result. The NZ Herald’s (paywalled) Claire Trevett has reported that on the basis of an email sent out to party members, ahead of the report being discussed by the caucus of MPs. Party members will be invited to a series of meetings to discuss the review in more depth, but at this stage it still seems unlikely that the full report will be released in any sort of wide way. Just putting it out there – I for one would love to read it, and you’ve got my email address if you come across a copy.

Meanwhile, the future of the National party’s strategic direction is currently up in the air. Some figures in the party have been suggesting a pivot towards culture war type positions – many of them imported straight from US politics and the online sphere. Ben Thomas has put together an excellent argument about why that would be a bad idea, and why (my paraphrase here) it’s important to have the main opposition party be grounded in reality.

We’ve been doing our utmost to bring you all the coverage you need of the Covid-19 outbreaks and lockdowns. And we can’t do it without the generous support of our members. If you want to help out our news team with this and other big stories, please sign up here.

A large lag effect is being seen in the number of companies being liquidated over unpaid tax debt, reports Tamsyn Parker for the (paywalled) NZ Herald. That process slowed down significantly last year, with the taxmen being lenient due to the conditions of the pandemic. But they’re now spiking back up slightly higher than normal levels. An IRD spokesperson said the organisation is encouraging struggling businesses to take advantage of government support, and tax expert Terry Baucher said such companies should be proactive about setting up instalment arrangements.

The Broadcasting Standards Authority has put out a new ruling on the use of te reo Māori on air. As Leonie Hayden reports for The Spinoff, the ruling is basically that the use of te reo does not in and of itself constitute a breach, after a flurry of complaints in that area. The increase in complaints in some ways indicates that broadcasters are increasingly comfortable and capable of speaking te reo on air, which is pretty cool and natural given it is an official language of the country.

A quick shout out to an organisation that does excellent work in the community: This week is the awareness week for Citizen’s Advice Bureau, the network of offices that let people know what their rights and entitlements are. This is much more important than it might sound – having support systems in place is one thing, but actually helping people access them is something else entirely, and that’s something government departments aren’t always good at. The CAB put out a press release highlighting a few of their volunteers, and on reaching 50 years of operation.

Tell your friends, we’ve got a good job going. The Spinoff is seeking a new social media manager, to manage platforms for both us and Daylight Creative, our newly established content studio, which is itself a spinoff of The Spinoff. Applications close this week, so get in quick.

Got some feedback about The Bulletin, or anything in the news? Drop us a line at thebulletin@thespinoff.co.nz

Right now on The Spinoff: Mark Hanna writes about police dogs, and how their cuddly publicity hides their significant danger to the public. Ollie Neas reports on peace group complaints that Rocket Lab’s recent launches put New Zealand’s nuclear free status at risk. Stewart Sowman-Lund reports on a survey that shows one in five New Zealanders are unlikely to get the Covid vaccine. If you’ve heard anything at all about a controversy around Dr Seuss books recently, primary teacher Louise Drummond has a very clear explanation for you. Simon Day writes about people making human connections at the dog park. Sam Brooks considers the curious obsession local radio host Kate Hawkesby has with erstwhile royal Meghan Markle.

And one of the most interesting episodes of Scratched to date has just launched – that’s saying a lot too. The episode focuses on Jane Tehira, New Zealand’s first triple-international women’s sporting representative. What’s really good about it is that it captures the cultural history of the 1950s, why sport was so important for Māori people moving from the country to the cities, and how that culture was passed down through whakapapa. The other thing that jumps out – it’s really rare to see the stories of older people get told in such a thoughtful and sensitive way.

For a feature today, an excellent piece about how entrenched cultural assumptions will cut against necessary policy interventions, from one of the sharpest minds in New Zealand’s political economy. Writing in his newsletter The Kākā, Bernard Hickey demolishes the myth that our climate emissions and housing problems can be beaten without some sacrifices in the way we live being made. Many people love their big suburban backyards and driving their utes, but they’re incompatible with better policy. Here’s an excerpt:

This skirmish illustrates just how hard it will be to change fundamental things in our culture. Cars aren’t just machines. Suburban homes aren’t just collections of wood, brick and tiles on dirt. They represent our identities, our aspirations and are woven into the fabric of who we are as New Zealanders. People spend all their adult lives striving for a house with a backyard for the kids, a ‘flash’ ‘car’ that can pull a boat to the beach and room enough for a BBQ with your friends and family on a sunny, summer’s evening.

To halve carbon emissions from cars and utes requires massive changes in the way we live our lives, run our society and power our economy. Firstly, it would require a lot of trips in cities of less than 10kms that are currently done in cars, SUVs and utes to happen on buses and trains, or through walking and cycling. That means a lot more people living in denser housing close to city centres, and bus and train networks with taxpayer and ratepayer subsidies closer to $50b than $5b. That means a lot more apartment and townhouse living, and a lot more people choosing not to have their own cars. Given our current population growth rate of around 1.5% per year, it would also require a lot more vehicles to be smaller, lighter and electric powered.

NZ Cricket lobbied Dr Ashley Bloomfield for players to get early access to the Covid vaccine, while he was a guest at a game, reports Liu Chen for Radio NZ. A bunch of them are heading offshore for the IPL soon, ahead of the Test Championship mid-year. It seems unlikely at this stage that the lobbying efforts have come to much. We’re yet to see the exact breakdown of vaccine prioritisation, but I’d be pretty surprised if sportspeople ended up bumped up the list. In terms of other major events, reports emerged this morning the Tokyo Olympics would be going ahead without spectators.

That’s it for The Bulletin. If you want to support the work we do at The Spinoff, please check out our membership programme