New Zealand's oil and gas industry is a significant part of the country's economy, but it will stop all new offshore exploration to address climate change.
"There will be no further offshore exploration permits for oil and gas," Prime Minister Jacinda Ardern said in a Thursday announcement.
The decision applies only to new permits that are put out to tender each year, without prejudice to existing authorizations. Some of these permits have more than a decade to wait.
The country has 31 permits for exploration of oil and gas, 22 of which are offshore. According to PEPANZ, an organization representing the country's oil industry, the New Zealand oil and gas industry contributes NZ $ 2.5 billion (US $ 1
For environmental groups, the move is a big step towards tackling climate change. Russell Norman, Executive Vice President of Greenpeace New Zealand, said the decision was a "big win" for the climate.
"New Zealand has prevailed against one of the most powerful industries in the world."
"The End of New Oil And gas exploration in our waters, the world's fourth largest Exclusive Economic Zone, is inaccessible to new exploitation of fossil fuels, and New Zealand has risen against one of the most powerful industries in the world," said Norman.
WWF New Zealand CEO Livia Esterhazy hopes the announcement will spur investment in renewables from the oil and gas industry. "This is the way of the future," she said.
PEPANZ argued that the ban would "do nothing" to reduce greenhouse gas emissions and that renewables could not yet meet the country's energy needs.
"We urge the government to talk to the industry urgently, and in the meantime we will carefully consider the implications of this decision and our options," said CEO Cameron Madgwick of PEPANZ.
New Zealand is not the only country that would stop oil and gas in this way, banning all oil and gas production within the country and its overseas territories by 2040.