Media Release

Solid Energy confirms progressive withdrawal from home heating market

20 September 2004

Solid Energy Chief Executive Officer, Dr Don Elder, tonight confirmed to Southland residents that the company was planning to progressively withdraw from supplying the coal home heating market for the sole reason that burning coal on open fires and enclosed household burners is a major contributor to air pollution and, as a result, the early deaths and bad health of many New Zealanders.

At a public meeting in Invercargill Dr Elder acknowledged that there had been a number of concerns raised by Southland residents. The company wants to discuss these further with local councils and other stakeholder groups, including Environment Southland and Ministry for the Environment, and can be flexible in the timescale that we envisaged, of up to five years, for withdrawing the supply of coal to the household market in Southland and Otago.

Dr Elder said: "We believe that we have made the right decision to withdraw our coal from the home heating market, but we are listening to the reaction that there has been in Southland. Our decision is supported by extensive studies over many years both in New Zealand and internationally, that solid fuel - coal and wood - burnt on open fires and enclosed household burners contributes to air pollution and significant health problems. This is the one, and the only, reason that we have decided to withdraw from supplying the home heating market. Every other reason that I have heard or seen reported in the media is untrue."

A number of New Zealand towns and cities have air quality problems, which have been identified both locally and nationally. These cities include Queenstown, Dunedin, Nelson, and Invercargill as well as some North Island cities. The main issue for winter air quality is particulates - very fine particles referred to as PM10s - which are emitted up the chimney when solid fuels are burnt on open fires and enclosed household burners. Long-term exposure to air pollution is increasingly being linked to serious health problems including heart disease, respiratory disease, cancer and under development of lungs in children and young adults.1.

The Ministry for the Environment estimates that over 600 New Zealanders die prematurely every year due to the effects of particulates. That figure includes around 48 early deaths in Dunedin and five in Alexander. From 1 September 2005 local government will be responsible for implementing and enforcing national air quality standards, which will introduce minimum standards for PM10s (50 mg/m3) and other emissions across New Zealand. Councils must comply with the national standards by 2013.

In air monitoring carried out at Miller Street, Invercargill by Environment Southland, the national guideline maximum of 50 mg/m3 has been exceeded nine times over the last two winters (2003 and to date in 2004) with a highest recorded level of 90 mg/m3 - almost twice the national guideline level. However the actual figures are likely to be higher as the levels are only measured every second day. Compared to other New Zealand towns and cities Invercargill is at the higher end of the spectrum. This is likely to be causing significant short-term respiratory illness as well as serious long-term diseases in Invercargill residents.

Solid Energy estimates2. that coal burnt in open fires or enclosed household burners causes up to 70% of particulate emissions from home heating in Invercargill. In Christchurch where there have been extensive studies over many years, home heating is the most significant source of particulates in the city. It is likely that particulate emissions from home heating will be a similar contributor to total particulate levels in Invercargill.

Dr Elder said that Solid Energy wants to be part of the solution in cleaning up New Zealand's air, not part of the problem. Although rural areas of Southland may not have significant air quality issues, it is not possible for the company to be selective in supplying coal and as a result we made the decision to withdraw from the household market completely. Other coal suppliers may step into the gap in the market with lesser quality products, which in the short term may result in poorer air quality, but Solid Energy is encouraging Environment Southland and other regional councils to take the lead in banning the use of all coal and wood on open fires and in older enclosed burners. For example, open fires will be banned in Christchurch from the beginning of 2006 and in Nelson from July 2008.

However people do need affordable home heating. This is why Solid Energy has invested in the wood pellet business and is discounting the purchase and installation of a basic wood pellet fireplace to $2,500 in places with serious air quality problems. But Dr Elder stressed that this is not a move to boost the wood pellet business - pellet fires are simply one clean and affordable option - others include heat pumps and night stores.

We know Southlanders have invested in multi-burners, coal ranges and other solid fuel appliances for home heating. We want to signal to people that eventually Solid Energy coal will not be an option for home heating and that from now on anyone thinking of replacing a home heating appliance should consider a clean option.

New Zealanders need clean, affordable home heating and we are committed to working with the Government, regional councils and others to ensure that people have these choices when replacing open fires and solid fuel household burners. The future for coal in New Zealand lies in its ability to help meet New Zealand's energy needs through high efficiency, low emissions industrial burning and electricity generation, not in home heating.

Coal burnt in compliant industrial burners by New Zealand industry and for electricity generation at Huntly has very low pollutant emissions. Technologies to deal with emissions of particulates, SO2 and NOx are widely used and available and cleaner technologies are under development internationally which will significantly reduce further the environmental impacts of industrial coal use." ENDS

For further information: Vicki Blyth, Communications Director, Solid Energy Tel: 03 345 6078/ Mobile: 021 670 250

Notes: 1. Study published in New England Journal of Medicine, 9 September 2004, Vol. 351 No.11 2. Kingett Mitchell Ltd study for Solid Energy New Zealand Ltd, September 2004.