NZ Government Gives Golden Bay Cement $60m Grant to Offset ETS Carbon Costs on Domestic Cement Production

The New Zealand government has awarded Golden Bay Cement a $60 million grant to keep the Portland cement plant near Whangarei operating until at least 2040. The plant supplies nearly 60% of domestic cement and faced closure due to rising carbon costs under the Emissions Trading Scheme (ETS), which put local producers at a disadvantage compared to imports that do not pay the same carbon price. The grant also requires a $150 million investment in operations and decarbonisation through 2040. This situation highlights a key tension in carbon policy: the ETS was designed to penalise emissions but has swung from over-compensating industry with free credits to under-compensating it, forcing taxpayer-funded bailouts. Meanwhile, the government faces a separate $5 billion bill to buy offshore carbon credits to meet its 2030 Paris target. For the construction sector, the deal secures supply and price stability, but raises questions about whether such subsidies will become a recurring fix for strategic industries hit by carbon costs.