The power of biomass – unlocking low-carbon heat in New Zealand

How should boards respond when energy costs spike, gas supply tightens and emissions targets loom? Biomass may be the answer for organisations requiring industrial heating solutions.

Steve Koekemoer

For Nature's Flame executive chairman Steve Koekemoer MInstD, the challenge facing many boards is awareness. "People around the world have been using biomass for decades. It's well proven. Yet in New Zealand there's still a belief that switching from gas to biomass is daunting or expensive," he says.

Nature’s Flame is New Zealand’s largest wood-pellet manufacturer, producing about 180,000 tonnes a year from its purpose-built Taupō site. That equates to about 3 million GJ of energy – roughly the annual electricity use of 84,000 New Zealand homes. Around a third of that production is exported to Japan where biomass is already a standard energy source. “That’s the irony,” Koekemoer says. “We export significant volumes overseas, yet we have businesses here struggling with energy uncertainty.” 

Reducing emissions at the source

While Nature’s Flame plays a growing role in helping other organisations decarbonise, it has also spent years reducing the footprint of its own operations. The company is unusual in that it uses only genuine residues from nearby sawmills – sawdust and shavings that were once treated as waste – rather than purpose-cut material. Proximity to Taupō’s forestry sector means a consistent supply chain that avoids long-haul transport emissions. 

Just as importantly, Nature’s Flame relies on geothermal steam for drying its pellets. Few pellet producers globally use geothermal heat in this way. It eliminates the need for fossil-fuel combustion in a process that is traditionally energy intensive.

“From an environmental aspect it’s extremely good,” Koekemoer says. “If we can use less energy and lower our freight costs, it’s better for emissions and it makes us more efficient. Those things go hand-in-hand.” 

The company is also expanding its renewable-energy portfolio. A solar farm has recently come online and planning is under way for a second. It is exploring additional geothermal opportunities and evaluating new technologies to continue reducing operational emissions. Biomass may be the largest part of today’s business, but Nature’s Flame is deliberately widening its green-energy mix. 

Breaking down misconceptions for boards

A central theme in Koekemoer’s governance message is boards must actively interrogate their energy assumptions. Many organisations remain unaware biomass is now a lower-cost option than natural gas – a shift that has occurred only recently after years where gas was cheaper. 

“Some customers would love to go green, but they’ve struggled to pass higher costs on. Now biomass is cost effective and better for the environment. Yet the commercial view is still the first hurdle,” he says. 

He notes boards often focus on immediate operational risks – rising gas prices, contract renewals, ageing boilers – without stepping back to consider long-term resilience. Gas price shocks have been significant. Consenting for boiler conversions can take up to two years. Electrification of heavy process heat remains expensive and technically challenging in many sectors.

“If you’re not aware of the solutions out there, it becomes a challenge at board level. You can look at all the risks and think you have no options,” Koekemoer says. “But from our perspective biomass is often the only viable choice available and cost effective today.” 

Supply is not the issue

One of Koekemoer’s strongest messages is New Zealand does not have a biomass supply shortage. If anything, supply is abundant and scalable.

“There’s a massive global market. Millions of tonnes are traded every year. So supply is not the issue,” he says. Nature’s Flame could redirect its exports to the domestic market and double production if domestic demand existed. 

The real constraint is demand. Many companies delay decisions because they believe supply is fragile or biomass is a niche product. Internationally, the opposite is true. Europe, the US and North Asia use pellets extensively for industrial heat.

This gap in understanding has driven Nature’s Flame to widen its role beyond manufacturing into education, transition support and awareness-raising.

Another issue boards must weigh is the time it takes to convert. Even once a company decides to move away from natural gas, the path is rarely immediate. Koekemoer notes boiler conversions can require up to two years when consenting, engineering design and installation are factored in. Many firms underestimate these timelines and then scramble when gas contracts expire or prices spike. 

“Everyone waits until their contract is three months away and then tries to negotiate. Suddenly it jumps from $10 to $30 overnight,” he says. 

Helping businesses convert 

In the past few years the company has increasingly acted as a partner to organisations wanting to shift away from fossil fuels. This includes technical assistance, long-term fuel planning and, in some cases, innovative financing.

“If the barrier is capital, we can look at providing the boiler ourselves for the right customer,” Koekemoer says. “We can offer different options to remove those barriers.” 

For some sectors, such as schools, community facilities and swimming pools, biomass has already become standard. Larger energy users, including food and manufacturing businesses, are now investigating the transition more seriously as gas volatility bites.

Koekemoer sees a growing governance responsibility. “If your gas contract comes up in six months and you decide you want biomass, you still have an 18-month lead time. Boards need to think strategically, not reactively.” 

Through his wider governance roles at Hall’s Group and Open Country Dairy, Koekemoer has seen how energy risk can escalate when boards lack visibility of credible alternatives. Nature’s Flame is part of the Talley’s Group, and while it operates independently, that connection gives him a broad view of energy use across multiple sectors – from food production to supply chain logistics. That experience reinforces his concern that too many businesses could be caught out by rising gas prices or delays in transition planning. 

“What concerns me is the number of companies that could be caught out too late,” he says. “A bit of awareness at board level could prevent jobs being lost or plants shutting down. Boards need to think strategically, not reactively – the conversations need to start now.”