New Zealand has set ambitious targets for reducing greenhouse gas emissions, including achieving net zero emissions by 2050. The country enjoys many natural advantages for its energy transition, including an enviable renewable resource base.

New Zealand already has a low‑emissions electricity system, with significant production from both hydropower and geothermal, and therefore has an attractive opportunity to leverage this clean electricity to decarbonise end-user sectors. This will require not only sizeable technological investments to efficiently electrify transport and industry, but will also necessitate a sizeable buildout of additional renewables generation capacity, along with supplemental grid and storage investments. Notably, the transport sector accounts for the highest share of emissions and is almost entirely dependent on oil. Industry is also a major contributor to New Zealand’s emissions and is heavily reliant on fossil fuels.

In this report, the IEA provides energy policy recommendations to help New Zealand effectively manage the transformation of its energy sector in line with its climate targets.