NZ government introduces legislation to ban power plants that burn fossil fuel

New Zealand introduced legislation Tuesday to ban new power plants that burn fossil fuels for a decade, winning plaudits from environmental activists.

The bill introduced to Parliament also proposes an emissions trading scheme for reducing greenhouse gases.

New thermal electricity generation above 10 megawatts whose fuel source is more than 20 percent oil, coal or gas, would be banned under the 10-year plan, Climate Change Minister David Parker said.

Already 65 percent of the nation's electricity is generated from renewable resources, mainly hydroelectric plants. Wind, geothermal power and other renewable fuel sources will be key for future electricity generation, Parker said in a statement.

Greenpeace immediately congratulated New Zealand for "leading the way on renewable electricity."

"This is unprecedented internationally," said Greenpeace climate campaigner Susannah Bailey. "The ban sends a clear message to power generators that fossil fuels have no part to play in New Zealand's future."

Parker, who is also energy minister, said some exemptions would apply: The fuel source can contain more than 20 percent fossil fuels if the remainder is made up of waste, when the needs of isolated communities are "most logically" met by thermal generation, or in time of emergency. He did not define emergency.

The emissions trading part of the legislation would establish New Zealand emission units, linked to Kyoto emission units for transfer to offshore buyers.

The scheme would apply to the forestry sector from January 2008, transport fuels from 2009, industry from 2010 and the agriculture and waste sectors from 2013.

In early October, Prime Minister Helen Clark unveiled an ambitious plan to halve transport greenhouse gas emissions by 2040 and generate 90 percent of New Zealand's electricity supply from non-carbon renewable resources by 2025.

The Climate Change (Emissions Trading and Renewable Preference) Bill must pass through four debating stages in Parliament, plus a study by a Select Committee, before it can become law.