Hon Dr Nick Smith MP
National Party Climate Change Spokesman
13 June 2008
Govt company's ‘carbon neutral’ claim greenwash
Meridian Energy should stop claiming its electricity is carbon neutral when it has to buy a third of its power from
thermal generators, says National’s Climate Change spokesman, Nick Smith.
Meridian is the Government’s largest State Owned Enterprise and is New Zealand’s largest power company. Its billboards
and public advertisements claim its electricity is carbon neutral.
“The fine print on Meridian’s website says it has to purchase power off the grid from thermal generators to supply its
customers during dry years, but claims these are offset by the purchase of carbon credits. These notionally avoided incremental emission units are being purchased from projects like Trust Power’s Tararua wind farm.
“The idea that Meridian can magically convert thermal electricity into ‘certified carbon-neutral electricity’ by buying
these sorts of carbon units is modern day hocus-pocus. It has as much credibility as the old church practice of penance
where money could buy forgiveness for sins.
“My worry with this sort of false advertising is that it creates the impression we don’t need thermal electricity in New
Zealand. The reality is that there are times of drought, and when wind does not blow, when thermal power is the only way
we can keep the lights on.
“This is another example of Labour spinning out of control over climate change. Helen Clark has been pushing the carbon
neutrality slogan despite her Government’s record of massive emissions growth and the worst ever deforestation. Meridian
selling thermal electricity as though it is carbon neutral is part of this misinformation agenda.”
Dr Smith has asked the Commerce Commission to investigate the carbon neutral claims by Meridian and to provide clear
guidance on the use of such environmental product claims.
“It’s good that consumers are becoming more environmentally conscious, but to make real progress on climate change we
need to ensure that phrases like carbon neutral have integrity.”
ENDS
Attached: Letter to Paula Rebstock, Commerce Commission
Paula Rebstock
Chair of Commerce Commission
PO Box 2351
Wellington 6140
13 June 2008
Dear Ms Rebstock,
I seek an inquiry by the Commerce Commission into the use of the phrase “carbon neutrality” in this instance in respect
of Meridian Energy, but also because the issues around the carbon footprint of goods and services and related carbon
credits is going to become more important as New Zealand attempts to deal with the issue of climate change.
My specific complaint is in respect of Meridian Energy, whose Wellington airport billboard (and many other
advertisements) claims Meridian sells certified carbon neutral electricity. You will be well aware of the current issues
around electricity supply and low lakes levels, in which I noted on National Radio last week Meridian acknowledged that
it was having to purchase one third of its electricity off the grid from thermal generators to supply its customers.
This is further acknowledged on their website where it says that in dry years it may need to purchase such power off the
grid. The website says it will offset these emissions from the purchase of carbon credits, and states it has been
certified as carbon neutral until 30 June 2008.
It is a misrepresentation for Meridian to sell thermally generated power as carbon neutral and it makes a mockery of the
term. It is also unfair that Meridian has been taking customers off other power companies on the basis of its carbon
neutral claim, only to now have to buy power off those same companies to keep the lights on. At the core of this issue
is the debate over the carbon credits Meridian says it is using to maintain its carbon neutral status. These units can
be generated from activities that either remove or prevent emissions to the atmosphere. Meridian notes that it has
purchased carbon units from Trust Power, from its Tararua Wind Farm. The theory is that by building the Tararua Wind
Farm it has reduced the need for thermal power, thus creating units, and that these units can then be sold to Meridian
and that by purchasing these and thermal power, Meridian magically is able to sell carbon neutral electricity. This is
not credible. It creates the ridiculous scenario where the power from the Tararua Wind Farm can twice be claimed as
carbon neutral, once when sold to customers and a second time when selling the carbon units to another power company.
This issue is going to get more difficult as New Zealand proceeds with an emissions trading scheme over the next few
years. It will require all fuel companies to buy carbon units to offset emissions from the liquid fuels they sell. If
Meridian’s approach is left to stand, companies like BP, Shell, Caltex or Mobil could all quite legitimately sell their
petrol and diesel as carbon neutral on the basis that they have had to buy carbon units under the emissions trading
scheme. These carbon units may come about because of Russian hot air, from the initial units allocated to New Zealand
under the Kyoto Protocol, or units given for projects such as wind farms. But none of them fairly equate to saying that
the fuels are carbon neutral.
You will have noted the food miles debate in the UK and the potential for it to do New Zealand great harm as a
consequence of misrepresentation. This just reinforces how important it is at home that advertising around this
important issue of climate change is accurate.
I wish to make plain that I have no difficulty with electricity being generated by Meridian’s hydro and wind farms being
marketed as carbon neutral. Nor would I have difficultly with Meridian making plain that in dry years it had to buy
thermal electricity to maintain security of supply and that it was also purchasing carbon units to offset this. But it
is not okay to describe this power as carbon neutral. I would be happy to provide any further information you might
require to initiate an inquiry.
Yours sincerely,
Nick Smith
National Party Spokesperson for Climate Change