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Analysis of last year's census figures showed Otago had the third-highest use of coal for domestic heating (14%), behind Southland (36%) and the West Coast (56%), council air quality scientist Deborah Mills said.
Other regions reported household use of coal less than 4%.
Even though the region's use of coal was way above average, it had halved from 32% in 2001 to 14% last year. When a multifuel burner was removed from a house and replaced with a heat pump or gas, about 300g of PM10 (small particulates) a day was removed from the atmosphere. When it was replaced with a compliant wood burner, about 120g to 200g was removed.
In Otago, Clutha district had the highest use of coal (40%) and Queenstown Lakes district the lowest (7%). In Dunedin, 14% of homes used coal.
While coal use was well below the Otago average in Wanaka and Arrowtown, the towns had higher than the national (37%) and Otago (54%) use of wood for heating, at 67% and 59% respectively.
Overall, use of wood in Otago had dropped slightly in the same period, from 62% to 56%.
While the percentage of households using wood for heating was slowly decreasing, the numbers of households using wood was increasing due to rises in population and housing in the Queenstown Lakes district, she said.
''With the introduction of strict emission limits on new wood burners in 2005, even though the total amount of emissions is increasing with housing growth, the rate of increase has slowed.''
Council engineering, hazards, and science director Gavin Palmer said social issues influenced people's choice of fuel: ''It's logical when coupled with climate why people heat this way.''
Coal use dominated communities where a source of coal was nearby and where people connected to the mine got free coal.
Milton had the highest coal use in the region at 28%, down from 56% in 2001.
''Having a free source is the driver of greater use. It is something that does not occur in other parts of New Zealand.''
Coal was not as clean burning as other forms of heating and produced a greater amount of particulate material producing air pollution, he said.
Otago air plan rules which came into effect last year effectively banned the use of coal for home heating and older burners, including open fires in the worst air polluting towns of Arrowtown, Alexandra and Cromwell. As a result, coal use in Alexandra had dropped from 25% in 2001 to 2% last year.
People often had access to free sources of wood which drove its use, but the issue was the dryness of the wood, he said.