Biofuel Act

The Biofuel Act was passed by parliament last week, despite heavy criticism by Dr Jan Wright, the Parliamentary Commissioner for the Environment. This Act sets mandatory levels of biofuel in petrol and diesel, and was passed despite governments overseas halting plans to pass similar legislation because of environmental concerns. The two main problems with the legislation are:

  • Biofuels may not actually reduce greenhouse gas emissions
  • There are environmental and social issues around the production of biofuels, where crops may take land away from food crops or from rainforest.

Both of these issues are addressed in the Act (Section 34GA) in an amendment the Greens have made a big deal about, but they are not addressed directly. Rather, the “Minister must recommend Order in Council … providing qualifying biofuels must be sustainable biofuels”. This basically means that the Act does not define how biofuels will be determined to be sustainable, leaving this up to the Minister to sort out at a later date – despite this being the primary objection to the policy.

To guide the Minister in this, some Principles are outlined. Principle 3 (biodiversity and land with high conservation value) is reasonably logical. Principle 1 states:

Principle 1: Less greenhouse gas

Sustainable biofuels emit significantly less greenhouse gas over their life cycle than obligation engine fuel. In relation to this principle, the Order in Council must— …
(b) specify minimum levels of no less than 35% greenhouse gas emission reductions for qualifying biofuels in comparison to obligation engine fuel.

Just to show what environmental effect we can expect from this, if you replaced all fuel in NZ with a 2.5% biofuel blend, the biofuel having 35% less GHG emissions to standard fuel, then you would reduce NZ transport emissions by 0.875%. A completely insignificant amount.

Principle 2 states:

Principle 2: Food production

Sustainable biofuels do not compete with food production and are not grown on land of high value for food production. Without limitation, the following biofuels do not contravene this principle:
(a) byproducts of food production described in the Order in Council:
(b) ethanol from sugarcane grown in circumstances and in areas described in the Order in Council:
(c) rotational oilseed crops grown not more than 12 months in any 24-month period on the same land or as otherwise specified in the Order in Council.

In other words, in order to be sustainable a biofuel must not compete with food production. But ethanol from sugarcane and rotational oilseed crops, both of which in many cases will directly compete with food production, are specifically allowed.

So what “unsustainable biofuels” are ruled out? Pretty well nothing. We have no idea. The Minister can declare anything to be sustainable, if they can declare rotational oilseed doesn’t compete with food production they can claim anything.

Worse, this legislation has actually reduced the amount of sustainable biofuel we can expect to use. Argent Energy has halted plans to spend over $100 million on a biodiesel plant that would have produced biodiesel from tallow and waste cooking oil – about the most sustainable biofuel that you can get, as this is recycling of waste products.

Dickon Posnett, managing director of Argent Energy’s NZ subsidiary, says New Zealand’s proposed legislation in the Biofuels Bill makes the playing field too uneven.

“Ethanol gets a government-backed subsidy, through relief from excise duty, that amounts to 42c a litre,” he says. “Oil companies are being incentivised to import ethanol. That makes it utterly uneconomic to invest in the domestic biodiesel plant we were proposing to build.

“New Zealand needs to stop talking about its need to add value to its resources and actually do it. Much of its tallow resource is likely to go offshore and be converted to biodiesel which will get sold back here at a much higher price. It is tantamount to selling frozen lamb or beef carcasses and letting the importers overseas make the real margins by selling the juicy cuts.”

“Biodiesel production technology using tallow is proven now and the cost of making it in New Zealand would be more than competitive – if we had a level playing field,” he says.

So efficient, sustainable, locally produced biofuel (that would probably have been produced with no biofuel legislation) is halted and inefficiently produced, unsustainable, foreign biofuel is promoted instead. In this case the environment would have been far better off in a free market with no controls on fuel composition, which shows how pointless this Act is.

This is a classic example of ridiculous legislation that does not conform to the basic principles of The Family Party environmental policy: “Environmental policy needs to be factually sound, practical, affordable, measurable and actually help our environment”. It makes no practical sense, and would have little if any environmental benefit.

If elected we will be opposing such policy.

One Response to “Biofuel Act”

  1. Josh Maxwell Says:

    Do you do blogroll exchanging? If you want to exchange links let me know.

    Email me back if you’re interested.


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