Marsden Point tanks ready for arrival of diesel

The arrival of diesel reserves to Northland's Marsden Point marks a milestone in the government's fuel crisis response - but questions remain about how it will be used.

Prime Minister Christopher Luxon, Finance Minister Nicola Willis and Resources Minister Shane Jones on Tuesday fronted media at the Northland fuel import terminal, where two refurbished tanks had been cleaned out in anticipation of the backup diesel's arrival.

The government in early April signed off on $21.6 million from the Regional Infrastructure Fund for the refurbishment of the tanks that had remained unused since the terminal - New Zealand's largest - closed its refinery in 2022.

A brand new jet fuel tank for Z Energy was installed at the same time.

All three politicians were taken to the top of one of the new tanks, big enough to fit the entire Beehive inside, according to engineers.

Luxon said Channel Infrastructure, Z Energy and other partners' efforts to get the tanks prepared within the two-month timeframe was a "tremendous achievement".

"Hearing about how much water blasting and cleaning was needed inside these tanks, the 775 meters of piping that was needed... and the way that it was done, was just incredible," Luxon said.

The first shipment of the total 93 million litres was already being stored in the tanks, with the second set to arrive before August.

Luxon also thanked Willis and Jones for "early starts and those endless meetings" and building a "great relationship and rapport with our importers".

Willis said the diesel reserve would only be available to the government until December, and decisions had not yet been made about what would happen to it after that.

"We would have the option at that point of potentially extending that deal if we thought it was necessary. We could also look at some other options in terms of what our expectations are of fuel companies and the storage they have into the future," she said.

"I think the Cabinet is pretty like-minded that as we look ahead, New Zealand needs more resilient storage. We've learned that during the recent crisis, and so that's what we want to build towards."

She said it meant finding the balance between what was best for New Zealanders as petrol users versus what was best for them as taxpayers.

"We'll look for the arrangement that strikes the best balance, but ultimately we want New Zealand to have more security that comes from more diesel storage."

Regardless of what would happen to the fuel, the storage tanks would remain available.

Willis said the government would consider bringing the increase to fuel companies' minimum stockholding requirements - currently set for 2028 - forward.

A fuel security study for the Ministry of Business, Innovation and Employment (MBIE) last year also found that alongside expanding diesel capacity, accelerating the uptake of zero-emissions vehicles and increasing trucking capacity would be the most cost effective ways of improving fuel resilience.

Willis said electrification of the fleet would help, and "it's happening".

"During the fuel crisis, we saw the registration of electric vehicles triple - or I think even quadruple, one month - as New Zealanders made their own choice to purchase an electric vehicle so that they could escape those higher prices."

She pointed to $50m set aside for government offering interest-free loans for companies looking to build fast-charging stations, with the aim of adding an extra 10,000 by 2030.

Luxon also pointed to fast-track legislation supporting the construction of more renewable energy projects.

"Our goal is not emissions and 100 percent renewables for the sake of being 100 percent renewable, that is a co-benefit or a byproduct of us actually pursuing more energy independence and more energy security," he said.

With New Zealand First campaigning on an exit from the government's emissions obligations under the Paris Agreement, however, he equivocated.

"We're all here in our government capacity today, not our party capacities," Luxon said.

"As a cabinet, we made a decision, actually - you know, there are four countries that are outside of Paris Agreement at the moment ... we think coming out and withdrawing would be, at this, you know, would be, frankly send a message to our competitor countries and also large multinationals that they would actually punish our farmers and we'd actually all be poorer as a result of that.

"Having said that, what we sure as hell ain't going to do is send billions of dollars offshore. We're going to keep the money in New Zealand. We are on track to delivering net-zero 2050. We may even get there a few years early."

While a net-zero 2050 target is set down in law, the 2025 report from the Climate Change Commission shows risk of missing the 2050 climate target is "significant" - and while the country has made progress on reducing emissions, the Commission says government policy has made things worse.

The government's plan for meeting its target also relies heavily on buying offshore credits, and although the government is rejecting that as an option it has not explained how it would make up the shortfall.