METHANEXIT: SHOULD NZ BE SUBSIDISING ITS LARGEST GAS USER?

A dry winter in 2025 or beyond could enable NZ's largest gas user – Canadian company Methanex – to push up gas and electricity prices, according to a new report titled “Methanexit: should NZ be subsidising our largest gas user?”

The report – released by 350 Aotearoa, Common Grace Aotearoa and the Centre for International Corporate Tax Accountability and Research (CICTAR) – argues that tightening gas supplies and declining production margins are increasingly shifting Methanex’s business model from methanol production to on-selling gas, at a significant mark-up.

It also notes that $301 million in free emissions units have helped sustain the company in this position. Meanwhile Methanex appears to have used related party debt transactions to reduce its taxable earnings by $257.4 million, which could have reduced income tax expense by $46.3 million.