The Coal Action Network is appalled that a brand new dairy factory near Gore will be powered by coal burners, despite the region developing cleaner options.
The $240 million Mataura Valley Milk plant is a joint venture between a Chinese group and farmers, and aims to produce 30,000 tonnes of infant formula a year.
The company declined an interview but said in a statement that after careful consideration they decided to use coal as the plant's energy source. It said the type of coal has not been confirmed.
However, Jenny Campbell from the Coal Action Network said that was not good enough.
"We think it's ludicrous when there is wood energy available across Southland to fire the boilers that they're putting in.
"The ground has shifted since 2007 [when Mataura Valley Milk got consent] with people's attitude to burning coal. At this stage they are still building the factory so it's definitely possible to change the boilers ... I understand it is possible to modify them to use wood energy."
The government needed to take a harder line with coal burning in this country, Ms Campbell said.
"If the government put a proper price on coal then there wouldn't be this need for people to use a cheaper fuel source, particularly if they're burning lignite - the dirtiest form of coal."
Ms Campbell said she could not understand why people were trading on New Zealand's clean green image but were polluting the air at the same time - which their consumers did not know about.
'No reason not to grant consent'
In 2007 Mataura Valley Milk publicly notified its intention to burn coal, and after eight submissions were made, the company's application was taken to a hearing panel.
Environment Southland's director of policy planning and regulation, Vincent Smith, said the company was then given the green light and granted a consent to burn coal to run the milk processing plant.
Mr Smith said while coal was being phased out of many countries, it is still widely used.
"With modern technology today coal can actually be burnt by industrial processors both efficiently and effectively.
"As the location of the site is outside of a clean air zone there was no reason not to grant consent."
The Energy Efficiency and Conservation Authority and Venture Southland are in the third and final year of a project called 'Wood Energy South' which will produce 200,000 tonnes of wood waste a year for industrial businesses. The project plans to expand output to reach 600,000 tonnes in the next 30 years.
Mataura Valley Milk said it assessed the viability of using biomass instead of coal, but concluded that at this stage it was not viable as there was no commercially viable biomass industry in the South Island capable of supplying the plant's energy needs.
When asked how the council weighs up the economic value versus the environmental impacts of consenting to burning coal, Mr Smith said these issues are dealt with in the planned development process.
"However, where there are potentially significant effects alternatives do need to be considered ... as I understand it the effects from this application weren't considered to be significant."
Mataura Valley Milk said its modern boiler system could be adapted to use alternative energy sources and it would periodically look at alternatives as it developed.
Mr Smith said councils around the country were discussing where industrial plants should be located in regards to energy sources.
"Gore District Council are looking at undertaking such a process moving forward and that will allow them to determine, over time, where activities should occur... that's a very positive move."
However, he said it would be case of encouraging companies to alter plans, rather than telling them.
"At the end of the day under the Resource Management Act people can undertake activities and manage the effects.
"It's very much in the hands of the applicants and from there it's around how easy or how difficult the process is for them to achieve what they want to achieve."