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Market News

 July 11, 2007
New Zealand: Environmental Sector

 New Zealand is facing a number of problems as the country attempts to reduce the use of water and wastewater. These problems include an increasing water consumption, inefficient water use, excessive water extraction, and uncontrolled or poorly managed storm water drainage and wastewater disposal. Monitoring and managing water is primarily the responsibility of the regional councils. Opportunities exist for innovative scaleable solutions that can be implemented on a regional level.

In a January 2006 study conducted by researchers at Yale and Columbia, New Zealand ranked first in the world in meeting 16 key environmental goals such as providing clean water, air quality, biodiversity and sustainable energy. New Zealand's low population (4.1 million) and limited industrial base (310,000 places of business) means that New Zealand's environmental issues are generally less severe than those in many other industrialized countries.

Most water and wastewater services are currently owned and managed by local or regional councils. Water quality and supply are currently issues in the media and a concern of the general public. New Zealand's government is environmentally focused and environmental legislation plays an increasing role in the planning of projects of all sizes Under New Zealand's "Environment 2010 Strategy," the Ministry of Environment has the lead role in establishing a vision for the nation's water management. Six water management priorities have been set: Water Allocation, Lowland Stream Quality, Groundwater Quality and Quantity, Estuaries and Harbors, Microbiological Contamination, and Lakes. Opportunity relating to this initiative will likely be in the form of joint venture partnerships or consulting/advisory services.

New Zealand's Resource Management Act serves as the country's primary resource management legislation. Implemented in 1991, the Act adopts an environmentally supportive ecosystems approach to issues such as water management and waste disposal. A number of issues - especially decentralized implementation and enforcement and explicit recognition of Maori values with respect to water - have complicated water management issues in New Zealand.

Waste disposal / recycling and landfills are commercially operated, disposing of 3.4 million tons annually, 1.5 million tons in the Auckland area alone which is the largest population center (1.2 million people). New Zealand also has a good recycling programs and collects 500,000 tons annually. One of the areas of concern are the increase of used Japanese cars imported into New Zealand. Due to the elimination of tariffs in the 1990's for vehicles more people are trading in their cars for the second hand imports.

New Zealand ratified the Framework Convention on Climate Change and its Kyoto Protocol on December 12, 2002, making commitments to constrain its greenhouse gas emissions. New Zealand also regularly reports its current emissions and future estimates. In New Zealand, methane will make the most significant contribution to New Zealand's greenhouse gas emissions reduction. This is due primarily to New Zealand's extensive pastoral agriculture activities, since methane is produced when cows and sheep digest grass. As of 2004, New Zealand has 39.2 million sheep, 6.1 million dairy cows and 4 million beef cattle. For most other countries the dominant anthropogenic greenhouse gas emission is carbon dioxide from industry.

New Zealand through various institutions and organizations is working to promote its abundance of carbon credits. These credits are primarily from forests planted after 1990. The Kyoto Protocol enforcement is scheduled for the 2008-20012 timeframe.

The Hazardous Substances and New Organisms Act of 1996 (HSNO Act) came into effect for hazardous substances in July 2001. The Act and its regulations control the import, manufacture or use (including disposal) of manufactured chemicals that are hazardous substances or have hazardous properties. The Act has not been working as well as it should and there are proposed changes such as the definition of "substance" to include manufactured articles that have hazardous properties. The effect of this will be to bring all hazardous wastes within the ambit of HSNO as some wastes with hazardous properties are currently not controlled.

Best Prospects

The New Zealand government's priority environmental areas that offer opportunity to exporters are:

Managing Pests, Weeds and Diseases: The prevention and control of pests, weeds and diseases costs the New Zealand government billions of dollars each year. Possum control in particular is a large issue as they eat an estimated 21,000 tons of vegetation each day. New Zealand also suffers from weeds that threaten native flora.. Aquatic weeds are especially troublesome as they cause increased sedimentation buildup, eventually drying up rivers, streams and other bodies of water. Hydroelectric generation in the South Island is adversely affected by Didymoshenia geminata. Elimination of these problems is not financially or realistically feasible but effective control is needed.

Managing Pollution, Waste and Hazardous Substances: New Zealand is amongst the top producers of waste per person of any developed country in the world. Industry contributes another 300,000 tons of waste per year. The federal government is looking into introducing a waste levy to curb disposal. Landfills utilize technology, such as landfill gas to energy to reduce the methane discharge. Efficiencies in this area would be beneficial as electricity generation is more prevalent on the south island and majority of the population is on the North Island, hence more landfills.

Electricity prices are steadily increasing making employing landfill gas technology more feasible in the urban areas. One company, Waste Management, in 2004 generated sufficient energy from landfill methane (a potent greenhouse gas) for 6,200 homes in the area surrounding their Redvale (Auckland) landfill. New Zealand's electricity costs are rising significantly and the infrastructure is in need of a major upgrade, hence new technologies in this area could be profitable. Many US technologies such as evaporators are already in use in several landfills.

Recycling is also being undertaken throughout New Zealand. In the Auckland area in 2005, 350,000 tons of material was removed from commercial and residential streams for beneficial reuse. Efficiencies in this area through new technology could be an opportunity. Processes should be scalable as NZ operates on a regional level with a smaller population base.

Managing New Zealand's Water Resources: New Zealand's large dairy and agriculture industries has led to livestock generating faecal waste equivalent to 150 million people. This waste needs to be managed in sanitary manners in order to maintain the quality of the water. The seafood industry is very important in New Zealand with fishing accounting for over US$1.2 billion in exports a year, combined with the growing aquatic plant and animal farms dependent on sustainable clean waters. It is clear that clean water management tools are needed. Lastly, a significant portion of New Zealand's power comes from hydroelectricity. The preservation of strong bodies of water is key to the nation's economic health.

Managing Trade Waste Discharges: Waste is managed on a local level. And local authorities are expected to put in place a new Trade Waste Bylaw by 2008 or update their existing Bylaw to reflect legislative changes. Many of New Zealand's wastewater treatment plants are being upgraded improving the grease traps, on-line monitoring and biosolid reduction/disposal.

Foreign firms have the capability to capitalize on New Zealand's strong environmental concerns, including issues related to water resources. Auckland has traditionally suffered from wastewater and storm water drainage problems. Drainage infrastructure will be an ongoing concern as the city's population increases. In 2000, Auckland allocated an estimated NZ$63 million over five years for upgrades to the region's water quality.

Excerpts from "New Zealand: Environmental Sector Overview", U.S. Commercial Service, August 2006 and July 2007.