Fossil fuel subsidy call sparks debate

The Government has taken to the world stage to call for a global phaseout of fossil fuel subsidies – but independent research claims such subsidies are rising in New Zealand.

Researcher Terrence Loomis, of the Fossil Fuels Aotearoa Research Network (FFARN), claims the value of taxpayer-funded subsidies to the oil and gas industry between 2009 and 2016 more than doubled from $41 million to $88m.

The figures seem at odds with Trade Minister David Parker’s decision to co-host an event at a World Trade Organisation meeting in Buenos Aires, at which he called for a global phase-out of subsidies.

Whether or not the Government offers subsidies is a grey area, with a Ministry of Business, Innovation and Employment spokesman saying the Government’s position was that it did not subsidise fossil fuels, while Parker said subsidies were offered for pre-exploration activities and through fuel discounts for farmers.

According to Loomis, subsidies ranged from tax exemptions for drilling rigs and seismic ships, tax deductions for petroleum mining costs, and reduced petrol prices for sectors such as agriculture, forestry and fishing.

Also contributing to his total were the costs of geotechnical research provided to the petroleum industry for free, and sponsorship and attendance at conferences.

A Ministry of Foreign Affairs and Trade spokesman said the primary focus of the new WTO proposal was to reform inefficient fossil fuel subsidies, such as making petrol artificially cheap at the pump.

‘‘In 2015, New Zealand underwent a voluntary APEC peer review to get an objective assessment of our record in this area. The independent report concluded that New Zealand does not have any subsidies that lead to wasteful consumption.’’

Only 11 of the 164 countries in the WTO joined New Zealand’s call for an end to fossil fuel subsidies, which the WTO estimated at US$425 billion internationally in 2015.