In 2019 coal contributed about 6% of New Zealand‘s primary energy supply, mainly for steel making, food processing and a decreasing amount of electricity generation. It seems likely these proportions will increase. At times of low hydro and wind generation, non-renewable sources are used to help meet the gap between supply and demand. Both coal and gas have been used in recent years, but reduced gas supply has seen increasing use of coal-fired generation, mainly from imported coal.
The steel mill at Glenbrook uses about 800,000 tonnes of coal each year to smelt ironsand. The dairy industry uses a similar amount, almost entirely in the South Island, where there is no gas supply for process heat. The same applies to other South Island industries, including food processing. These uses of coal can be expected to continue for some time.
Coal from some West Coast mines, mainly Stockton, is exported via the port of Lyttelton. Mining coal for export is dependent on good prices for coking coal and access to the remaining sources of suitable coal.
The South Island lignite resource has the potential to be used as a petrochemical feedstock if necessary.
Coal is widely perceived to be a polluting fuel, but in developed economies this perception is largely a hangover from the belching smokestacks of the industrial revolution. Pollution from smoke and soot was largely under control by the end of the 1970s, and by the 2000s environmentally acceptable levels of sulphur dioxide and nitrogen oxide emissions were readily achievable at ever-reducing costs.
The main concern surrounding the use of coal is its contribution to atmospheric concentrations of carbon dioxide – a cause of potentially adverse climate change.
Coal cannot be burnt without producing carbon dioxide. Because coal is such an important energy source worldwide, massive efforts are being made by many countries to find ways to reduce or eliminate emissions. These focus on replacing coal with gas or, increasingly, with renewable sources of energy.