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NZ Biofuel Producers Disappointed Imports Set To Rule

Fuseworks Media
Fuseworks Media

23 June 2008 - Sugar cane farmers in Brazil may celebrate the latest proposals to introduce biofuel to New Zealand's fuel stream, but manufacturers wanting to set up a domestic industry are disappointed.

Dickon Posnett, spokesman for the New Zealand Biofuel Manufacturers Association, says the report from the Local Government and Environment Select Committee released today strongly supports imported ethanol. While the NZBMA supports both ethanol and biodiesel, the report suggests local manufacturers will get frozen out.

"The committee has done some good work on ensuring any biofuel introduced to New Zealand would be sustainable and reduce greenhouse gas emissions," Mr Posnett says. "But the committee's report does nothing to promote the use of the country's own natural resources, or reduce reliance on imported fuels. The report says the oil companies are focused on imported ethanol."

He says the committee acknowledges ethanol is to be "subsidised" by being exempt from excise tax whereas biodiesel is not. Mr Posnett says that makes it difficult for local producers who might use animal fat, used cooking oil or rape seed to compete on price.

"The committee has recommended the 'subsidy' be reviewed and ethanol be brought into line with all other biofuel in 2010, but what it means right now is that the oil companies will look to meet their obligations to introduce biofuel blends through importing ethanol, most likely from Brazil."

The economic and environmental benefits to New Zealand from making biodiesel and ethanol domestically should not be underestimated Mr Posnett says. Using its own natural resources could provide the country with an economic boost as well as helping it to meet its commitment to reduce greenhouse gas (GHG) emissions.

"The agriculture sector, for one, has the opportunity to benefit in several ways - from selling farmed goods and from reducing the cost of fuel for and cutting GHG emissions from farming machinery," Mr Posnett says. "International brands, like Case IH, are releasing machines now capable of running on biodiesel blends far in excess of the five percent, or B5, blend proposed in the Biofuel Bill. The same applies for major truck brands, many of which form a large part of New Zealand's road transport fleet.

"New Zealand is a long way behind many parts of the world in the development of a local biofuel industry that will help protect it from fossil fuel price shocks and reliance on imported fuels. But it can learn from mistakes made in some countries and New Zealand has the good fortune to have natural resources to make biofuel that is truly sustainable and reduces greenhouse gas emissions."

NZBMA members are companies that are, or intend to be, local manufacturers of biofuel. Some are concentrating on biodiesel and some on ethanol.

Raw materials being used to make biodiesel commercially include tallow (waste animal fat), used cooking oil and rape seed. There is sufficient raw material in NZ to replace 5% of NZ's present transport sector consumption of fossil-based diesel.

Whey (byproduct of milk) is already being used to commercially produce ethanol, while research is being done on the use of woody biomass to produce ethanol.

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