‘Open for Business’: NZ Courts Investors With Pragmatic Energy Transition Strategy

SINGAPORE, June 12, 2025 — New Zealand’s Resources and Associate Energy Minister, Shane Jones, has reaffirmed his government’s pragmatic and unapologetically pro-growth approach to energy transition, emphasising the critical role of gas as a firming fuel while pursuing renewable expansion. He outlined a multi-faceted strategy aimed at balancing climate ambition with economic realism.

In an exclusive interview with CarbonWire on the sidelines of the recently concluded APAC Energy Capital Assembly in Singapore, Shane Jones outlined the government’s recalibrated energy strategy. While expanding renewables remains a priority, Jones emphasised the ongoing importance of natural gas as a firming fuel to ensure energy security. Key policies include a NZ$200 million government fund to de-risk private investment in gas, the reversal of the 2018 offshore exploration ban, and proposals for special economic zones inspired by Singapore. Jones framed his approach as balancing climate commitments with economic resilience, cautioning against letting climate ideology undermine national solvency.

Jones also addressed the global attention drawn by New Zealand’s recent Budget announcement, particularly the NZ$200 million government fund dedicated to reviving gas production. The fund, he explained, serves as a co-investment instrument designed to reduce perceived investment risks and attract private capital back into New Zealand’s energy sector.

Balancing Renewables with Energy Security

Jones acknowledged New Zealand’s strong renewable credentials — with approximately 85% of its electricity currently generated from renewable sources, primarily hydro and geothermal. However, he was forthright about the challenges of intermittency: “When the wind doesn’t blow and the sun doesn’t shine, consumers still want the lights on.”

The $200 million fund, he said, is intended to reinvigorate gas production, not as a competitor to renewables but as a necessary complement that provides energy security and resilience. “We’re pursuing more geothermal, solar and wind. But without firming power — which in our case is gas — we cannot ensure reliable supply during adverse conditions,” he stated.

Reversing the Offshore Oil and Gas Ban

Central to the government’s energy policy reset is the decision to overturn the 2018 ban on new offshore oil and gas exploration, a move that Jones described as both pragmatic and necessary. The earlier ban, imposed by former Prime Minister Jacinda Ardern, had created widespread uncertainty among energy investors, many of whom felt betrayed and threatened never to return. Jones acknowledged that mistake, calling his current policy shift “a form of atonement.”

The new policy framework will allow for offshore acreage to be opened up either through government-defined block offers or private sector proposals directly submitted to the government. Additional legislative adjustments are underway, including fast-tracking multi-consent applications and refining foreign direct investment regulations to make the investment climate more attractive.

Drawing Inspiration from Southeast Asia

During his visit, Jones pointed to Southeast Asia’s pragmatic approach to energy security, notably referencing Singapore’s economic model as a useful blueprint for New Zealand. He highlighted plans to develop special economic zones, particularly around Marsden Point — a former oil refinery site — to attract clustered investments in bioenergy, aviation fuels, and battery storage.

“Singapore, with virtually no natural resources, has mined the most important capital of all — human capital,” Jones said, noting that dedicated zones could incentivise innovation and investment in New Zealand’s evolving energy landscape.

Climate Commitments and Economic Reality

While reaffirming New Zealand’s commitment to its Paris Accord obligations, Jones was clear about the need for balance: “No country can afford a carbon transition unless it’s consistently generating an economic surplus.” He noted that while New Zealand’s agricultural sector remains outside the country’s Emissions Trading Scheme (ETS), it remains a critical pillar of its export economy and global food supply.

Jones also acknowledged that forthcoming elections in 2026 would likely reignite domestic debates over the pace and affordability of decarbonisation measures. “We must ensure that the transition is affordable and that we can sell it to the public — and that the public believes the costs are worth the effort.”

Exploring Emerging Technologies

Beyond gas, Jones signalled cautious optimism on emerging low-emissions technologies. The government has committed NZ$60 million to explore supercritical geothermal energy, drilling 5-6 kilometres beneath the earth’s crust — a frontier no nation has yet mastered. Discussions are also ongoing to establish statutory frameworks for hydrogen development, particularly around naturally occurring “orange hydrogen”, while carbon capture and storage remain under exploration, with economic viability still uncertain.

“Small open economies like New Zealand must be willing to explore all options,” he said. “Every decision must be judged on affordability, security and sustainability.”

Clear Message to Global Investors

When asked about New Zealand’s message to the regional and global investment community, Jones was forthright: “New Zealand is open for business.” However, he also drew a sharp distinction, cautioning that while his government respects investors’ ESG priorities, “we are not interested in large organisations visiting their environmental bottom lines on New Zealand in ways that compromise our economic solvency.”

Framing himself as a “plain speaking, earthy politician”, Jones defended his pro-growth stance as essential to ensuring future generations inherit an economy as robust as the one that sustained his own. “Climate is not the only environmental challenge New Zealand faces — we also deal with pollution, oceanic challenges and more. The climate debate must not paralyse us physically or hobble us mentally.”