Pragmatic deal replaces coal burning at Nelson Hospital
Nelson Hospital will receive more gas from York Valley Landfill under a new three-year agreement between Nelson City Council and Health New Zealand, a ‘pragmatic’ solution that will remove 40,000 tonnes of greenhouse gas emissions a year.
The York Valley Landfill is the main solid waste site for refuse from both Nelson City and Tasman District and is managed as a joint venture between the two councils. It produces about 6 million m3 of landfill gas per year with an energy potential of about 125,000 GJ per year. The landfill is fortuitously located only 2.5 km from Nelson Hospital.
Landfill gas has been sent to the hospital for around 20 years with the hospital supplementing this gas supply with a coal-fired boiler that dates back to the 1960s.
In June 2025, the removal of the chimney tower for the coal boiler signaled the end of coal burning at Nelson Hospital, a practice that had been in place since the late 1800s.
On 27 August 2025, both parties renewed the contract to continue to supply gas for the next three years, with an increase in the volume of gas provided. Health NZ will also buy the landfill gas boiler and ancillary facilities at the hospital from the Nelson and Tasman councils’ landfill business unit.
“Nelson Hospital is pleased to continue using landfill gas as a sustainable energy source for Nelson Hospital under a three-year agreement,” says Rob Ojala, Regional Head of Infrastructure, South Island, Health New Zealand.
“With the recent removal of our coal burner, we’ve now eliminated coal use on site. Working closely with Nelson City and Tasman District councils and utilising their landfill gas not only reduces greenhouse gas (GHG) emissions and helps manage costs but also provides a reliable energy supply for the hospital. It’s a great example of how local partnerships can deliver practical solutions that benefit both the environment and the community.”
This contract is part of a project to reuse landfill gas, significantly reducing methane gas emissions and Emissions Trading Scheme (ETS) costs, while providing a reliable source of energy for the hospital.
“This is a win-win situation for everyone,” says Chair of the Nelson Tasman Regional Landfill Business Unit, Tasman Deputy Mayor Stuart Bryant.
“Cutting GHG emissions, saving money by reducing our ETS costs and supplying a large local energy user with waste-derived fuel that will now stop burning coal. This has been a huge contract to work through and my thanks go to the landfill business unit and council officers from both councils who have worked hard on this result.”
Nelson Mayor Nick Smith says the solution is a pragmatic one.
“This has been talked about for years, but it has been a complex project to deliver. The councils had to buy out the previous gas contractor, install new wells and collection pipes and then conclude this contract with Health NZ.
“It is a good deal for ratepayers in that the methane emissions from the landfill were costing more than $2 million per year in ETS costs but, with now collecting the gas and selling it to the hospital, we will be earning over $600,000 a year.
“Another benefit is 40,000 fewer tonnes of greenhouse gas emissions from the landfill and a reduction in PM10 (particulate matter with a diameter of 10 micrometres or less) pollution from the hospital no longer burning coal.
“This is one of the most positive projects of this term of Council in that we are both saving money and improving the environment.”
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