‍Loan scheme for industries wanting to reduce reliance on natural gas

2 June 2026

A government-backed bank loan scheme for industrial users of natural gas to reduce consumption in favour of other energy, including electricity, LPG or renewable gas was announced last week.

The scheme is part of this year’s budget announcements. and is expected to underwrite up to $1.2 billion of bank loans to businesses to reduce their dependency on gas by 15 percent or more.

Finance minister Nicola Willis said that under the scheme, the government would guarantee 80 percent of each supported loan in return for banks passing on lower interest rates to borrowers.

“This will make loans more affordable for firms wishing to switch fuel sources,” she said.

The maximum value of a supported loan under the scheme will be $50m of new lending.

This year’s budget has allocated $48 million to cover potential losses from the scheme. 

GasNZ clarified the intended scheme with officials, who confirmed that the scheme was not limited to loans that would directly support electrification.

A business could receive a loan to switch from reticulated natural gas to LPG. 

Support for switching to biomethane or biogas would also clearly be within scope, GasNZ chief executive Jeffrey Clarke said.

As conceived, it would need to be the business receiving the loan that reduced its natural gas consumption by 15 percent or more in favour of biogas or biomethane. GasNZ will be engaging with MBIE to see if the scheme can also be extended to biomethane producers.

EECA will be receiving more funding to conduct more energy efficiency audits, to support business cases for these loans.

To be eligible for the scheme, a business must be a current user of reticulated New Zealand natural gas with annual gas consumption of at least 1000 GJ.

For comparison, an average household with gas for cooking and heating uses about 25 GJ a year, while New Zealand’s 14 largest gas users use more than 300,000 GJ each per year.