New Zealand to guarantee gas transition loans
Sydney (25 May)
The New Zealand Government has agreed to help businesses reduce their use of natural gas through 80% guarantees on loans, in a bid to preserve the country’s declining reserves, it said today.
The Government’s Gas Transition Loan (GTL) scheme will de-risk new bank loans – valued at up to NZ$50 million – for projects that cut businesses’ gas consumption by at least 15%, without curbing production, Energy Minister Simeon Brown said on 25 May.
Businesses seeking GTL support must use at least 1,000 GJ of natural gas annually, the Government said today. Thousands of businesses meet the scheme’s gas use criteria, Brown said.
“The [Government] will guarantee 80 per cent of each supported loan in return for banks passing on lower interest rates to borrowers,” Finance Minister Nicola Willis said. It expects to support up to NZ$1.2 billion of lending through the scheme, Willis added.
But the Government has not finalised the GTL, according to Willis. It is working with commercial banks on the scheme’s final design.
“[The New Zealand Banking Association (NZBA)] and major banks have each been involved in discussions with Treasury and look forward to further engagement … as the scheme is progressed and implemented,” NZBA Chief Executive Roger Beaumont told Lithos.
New Zealand’s gas transition support scheme follows years of gas-driven industrial challenges.
Methanol producer Methanex paused production at its Motunui plant, in Taranaki, at the start of May to support gas-fired power generation, Methanex New Zealand Managing Director Stuart McCall said on 1 May. The company will restart its plant in July, McCall added.
Methanex previously idled its Taranaki plants from August to October 2024 and May to July 2025 to reduce industrial gas consumption.
New Zealand produced 22 PJ of gas in January-March 2026, down from 26 PJ and 32 PJ over the same periods in 2025 and 2024, respectively, data from the Ministry of Business, Innovation, and Employment (MBIE) show.
The country’s non-electricity-related gas consumption hit 55 PJ in 2025, down from 58PJ a year earlier, MBIE data show. The GTL could cut gas annual consumption by up to 10 PJ per year, modelling from the Energy Efficiency and Conservation Authority show.
By Avinash Govind