Resources Minister Shane Jones. Photo: RNZ / Samuel Rillstone
- Legal advice commissioned by the Green Party says the government's new gas plan breaches the Agreement on Climate Change, Trade and Sustainability (ACCTS).
- The deal with Costa Rica, Iceland and Switzerland focuses on trade in sustainable goods and services and was signed by the government last November.
- During last month's Budget, Resources Minister Shane Jones revealed a contingency fund of $200m had been set aside over four years for co-investment in new gasfields.
The coalition's $200 million dollar investment fund for local gas exploration is a "clear breach" of an international trade agreement, according to legal advice commissioned by the Green Party.
The Agreement on Climate Change, Trade and Sustainability (ACCTS) is a deal the government struck with Costa Rica, Iceland and Switzerland last year, prioritising trade in sustainable goods and services.
It has been described as a "ground-breaking" trade agreement that delivered commercial opportunities to New Zealand's economy, while addressing climate change and sustainability challenges.
The agreement was the first New Zealand had concluded with these countries outside of the World Trade Organisation
During last month's Budget, Resources Minister Shane Jones revealed a four year contingency fund to subsidise new fossil fuel fields.
"Natural gas will continue to be critical in delivering secure and affordable energy for New Zealanders for at least the next 20 years," Jones said.
"We are already feeling the pain of constrained supply."
Climate advocates were quick to denounce the plan.
In correspondence to the Greens last week, barrister Nura Taefi KC said the plan breached New Zealand's obligations to the deal that stipulates a ban on fossil fuel subsidies.
"It falls within the definition of a prohibited fossil fuel subsidy in article 4.3, because it involves a financial contribution by the government targeting the exploration, extraction, refining and/or processing of a fossil fuel, and will confer a benefit by way of a cost reduction for co-investors."
Last week Jones vowed to reboot the oil and gas industry during a fiery scrutiny hearing, in which he attacked the previous government for banning oil and gas exploration in 2018.
Greens' co-leader and climate change spokesperson Chlöe Swarbrick. Photo: RNZ / REECE BAKER
In a statement on Tuesday, Greens' co-leader and climate change spokesperson Chlöe Swarbrick said it was clear the government did not seek any advice or do any due diligence.
"It took just six months for this government to breach a trade agreement that they themselves signed up to.
"In November last year, Trade Minister Todd McClay sent out a PR celebrating signing the ACCTS. In May's budget lock-up, we spotted that their $200 million hand out to fossil fuel companies was probably in breach of that very agreement," she said.
"True to type, we weren't able to get straight answers out of the government."
The party called on the government to "recall" the investment plan.
"There's no grey area here. This is a blatant violation of our international commitments," Swarbrick said.
"If the government cared about energy security or regional resilience, they would be investing in distributed renewable energy.
"Instead, they've decided to throw gas on the climate crisis fire and spit in the face of our Trade and Climate Agreements while lining the pockets of fossil fuel executives."
McClay said New Zealand was fully compliant with the ACCTS agreement. He said the Budget 2025 measures were not "fossil fuel subsidies" under the definition in Article 4.3, and "do not breach our international commitments."
"ACCTS is a high-ambition agreement New Zealand proudly helped develop to promote trade in sustainable goods, services, and to eliminate inefficient fossil fuel subsidies.
"That work continues - but it must be based on fact, not political theatre."
Jones said the advice given to the Green Party was "scare-onomics".
"It's not based in any robust understanding of our international obligations and, sadly, it's designed to intimidate investors.
"That's what we need in New Zealand - investment."
Jones said advice was a "contestable area".
"I'm sure that their advice will be contested by others who believe that, without fossil fuels, the lights will go out. We are a party who sees an ongoing role for fossil fuels to maintain industry resilience and keep electricity flowing."
"The Green Party I accept want us to go back to horse and cart," Jones said.
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