The Greens are seeing the bright side in the closure of New Zealand's biggest energy user.

Rio Tinto will wind up operations at its Tiwai Point aluminium smelter in August next year - blaming high power costs and poor outlooks for the industry.

Green co-leader James Shaw says that losing the plant is a huge blow for Southland.

However, he told the Country the smelter has a very high carbon footprint.

"The country's overall total emissions will go down, and what that means is there will be less demand for carbon credits. Some farmers were a bit concerned about productive farmland being turned into carbon forests."

He says that people's power bills will likely also go down. 

Asked what will happen with those carbon farms in 80 years time, Shaw says that they will likely become permanent forests. 

"Once indigenous forestry comes up under the canopy, they'll start taking out trees for logs and using that for construction and whatever else."