At a time when the country is using the most energy for heating, increasing carbon charges are putting people that rely on coal out of pocket.
Vegetable growers and schools are among those struggling to transition to lower-emissions energy sources, especially in the South Island.
Most of the customers that purchase coal from Heaphy Mining near Westport are food producers, schools, hospitals and aged care facilities.
Mine manager Neal Clementson says he hasn’t put his coal prices up since 2014, but has had to pass on the costs of rising emissions.
Karamea Tomatoes uses coal to heat its glasshouses throughout the year.
Director Geoff Volckman told 1 NEWS the viability of his business is at risk “if we just keep going up and up with carbon credits”. He says its “the difference between making a profit and not making a profit and if you don't make a profit, well there's no use in carrying on”.
Coal prices shot to a record $30 per tonne following recent changes to the Emissions Trading Scheme.
Climate Change Minister James Shaw says the most significant of reforms was putting in place “a total cap on our emissions”.
“So we've had a cap and trade scheme without a cap and that has meant that emissions have been able to grow over the last 20 years when in fact they should have declined,” he explained.
It's part of the Government's plan to be carbon neutral by 2050. Mr Shaw says he’s not surprised to hear coal users are feeling the pinch.
“The whole point is to send a price signal to start investing in alternatives. So for example, last year the Provincial Growth Fund loaned $7 million to an eco gas plant which takes food waste and turns it into energy… so they’re actually using renewable gas from food waste in the same way that some others are using coal so there is certainly alternatives available.”
But TomatoesNZ doesn’t share that confidence, saying proven, cost-effective alternatives aren’t available yet.
A report by the New Zealand Institute of Economic Research found a carbon price of $50 a tonne would see most South Island covered crop growers go out of business and more products have to be imported.
TomatoesNZ says there are around 290 greenhouses growing vegetables in New Zealand, 52 of those are in the South Island, where there is no natural gas supply.
General manager Helen Barnes says they would like to see government “partnering with the covered crop industry to investigate options on a regional basis”.
For example, support for geothermal or biomass ‘hubs’ as well as looking at electricity regulations “to encourage local generation schemes”.
Westport South School also wants to be cleaner and greener. Board chair Stephen Dovey says they’re making changes like double glazing, insulation and replacing old lights with LEDs.
But they still rely on the school’s coal boiler to heat classrooms.
“We've looked into changing to a wood pellet boiler and that just didn't seem economical after we looked into the details of transporting the wood chips from Nelson to Westport,” he said.
Local electricity is also “extremely high”.
“We would have to take funds away from curriculum budget in order to be sustainable.”
Mr Clementson believes there has to be “a bit of give and take”.
“We've got to take care of the environment, but not at the absolute expense of New Zealanders.”
Funding is available to help make changes, but coal users say it's not enough to bridge the gap between them and New Zealand's climate goals.