Claims a fertiliser works being considered for Southland would receive up to $1 billion in emission subsidies and accentuate pollution problems have been described as premature.
Sustainability Council executive director Simon Terry said legislative changes to the emissions trading scheme introduced by the Government meant new carbon-emitting plants, such as a urea fertiliser factory under consideration near Gore, would receive subsidies of between $500 million and $1 billion over the next 20 years.
Mr Terry also said the increased availability of urea fertiliser would accentuate nitrate run-off.
But Solid Energy's new energy manager Brett Gamble said such speculation was premature as the plant viability study would include aspects such as carbon dioxide management, mitigation and offset opportunities.
It would be five years at least before it became operational, if at all, and Mr Gamble said it was difficult to speculate what international controls would be on carbon, how the emissions trading scheme operated and what industry assistance there would be.
Mr Gamble said the environmental concerns were a red herring.
"Urea is already in widespread use and we're not talking about using more urea, rather substituting imports for a locally made product and creating a new export industry."
Mr Terry said New Zealand was going down the wrong path constructing a urea plant, given the environmental cost of nitrogen-rich fertiliser, but if the full emissions and environmental costs were charged to the manufacturers and users, it would dampen demand.
The production of urea fertiliser emitted nitrous oxide which impacted on the ozone layer, and nitrate run-off in to water when the fertiliser was applied to land.
If the full cost of "the environmental damage" were to be met by those who made the fertiliser, less of it would be applied and what was needed could come from the Ballance Agri-nutrients-owned plant in Taranaki.
The proposed Southland plant would be built by competing fertiliser company Ravensdown in conjunction with Solid Energy.
