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Green light for ethanol-blended petrol

MEDIA RELEASE FROM THE ENERGY EFFICIENCY AND CONSERVATION AUTHORITY

TUESDAY 26 AUGUST 2003

Green light for ethanol-blended petrol

New Zealand has entered an exciting new era in renewable energy and transport fuels with the granting of approval to blend petrol with ethanol. This is an important step towards reducing net carbon dioxide emissions from the use of transport fuels, Energy Efficiency and Conservation Authority (EECA) Chief Executive Heather Staley said today.

"I am delighted to be able to report today that the Environmental Risk Management Authority (ERMA) has approved our application for the manufacture, release, handling and use of petrol-ethanol blends not exceeding 10% ethanol by volume. This means that ethanol can be blended with petrol, up to a maximum of 10 percent, and sold in New Zealand service stations. The 10 percent ethanol limit is the same as in the United States and is now the maximum in Australia.

"Because the ethanol that will be blended with petrol for New Zealand will be derived from renewable sources, it enables us to take an important step towards reducing overall carbon dioxide (CO2) emissions.

"When and where ethanol-blended petrol is sold is up to individual oil companies but we hope that ethanol will go on sale at some New Zealand service stations later this year.

"Where the ethanol comes from is again up to individual oil companies. The great thing about ethanol is that it doesn't need to come from fossil fuels and can be sourced from farming activities. In New Zealand ethanol is a by-product of the dairy industry, in Australia, Brazil and the United States crops are grown specifically for the production of ethanol.

"The use of ethanol-blended petrol is not new to New Zealand - there were trials in the 1980s when many countries were looking at ethanol to reduce their dependence on fossil fuels. There has also been extensive use of petrol-ethanol blends in Australia although the response there has been mixed due to a lack of regulation, resulting in the use of up to 40 percent ethanol in petrol, and a lack of labelling at pumps in some areas. However no problems were reported by motorists during a trial in Brisbane in which there was an ethanol limit of 10 percent, signage on pumps and consumer information available. A 10 percent limit is now the maximum for ethanol-blended petrol across Australia.

"In New Zealand we want to make sure the ethanol-blended petrol is suitable for use in our vehicles and consumers have all of the information they need. At a maximum ethanol content of 10 percent, most drivers would not be able to notice any difference between the use of ethanol-blended petrol and ordinary petrol. The fuel will also meet all the other quality-related specifications of the Petroleum Products Specifications Regulations 2002," Ms Staley said.

These regulations also require pumps to be clearly labelled and consumer information to be provided at the point of sale. EECA is working with oil companies to develop a standard label for pumps which will state 'contains up to 10 percent ethanol' and with the motor vehicle industry, oil companies and consumer groups to prepare detailed information for both consumers and motor trade. The trade information will be sent to the motor trade prior to the fuel going on sale and the consumer information will be available wherever the fuel is sold. Both documents will be available at www.energywise.org.nz in the 'on the road' section.

The National Energy Efficiency and Conservation Strategy covers all types of energy, including transport fuels. Transport is the single biggest energy consumer in New Zealand - and it's the fastest growing. The National Strategy also includes a target of a 23 percent increase in energy from renewable sources by 2012. The introduction of ethanol-blended petrol is an important step towards meeting the 7 percent of the renewable energy target expected to come from transport fuels.

The application to ERMA was submitted by EECA with the support of all oil companies and Fonterra, New Zealand's major ethanol producer.

Ms Staley says EECA is improving energy choices. For more information visit www.energywise.org.nz

ENDS

For a copy of the ERMA decision visit

http://www.ermanz.govt.nz/search/substance1.cfm

and search the register by inserting the application code HSR02058 or use the substance trade name ethanol

ETHANOL FACT SHEET

Ethanol - the product

Ethanol is an alcohol made from sugar or starches and products containing sugars or starches, through a process of fermentation and distilling.

In New Zealand, ethanol is a by-product of the dairy industry - it is a by-product of milk processing that is produced by fermenting lactose with a special yeast that converts this sugar into alcohol. The ethanol is then distilled off and further processed to remove water.

The ethanol currently produced at Fonterra's Anchor plants is used for industrial purposes and in beverages. Approximately half of the ethanol produced by Fonterra is used in New Zealand and the balance is exported, mainly to Australia and Asia with some to the Middle East.

Ethanol can also come from overseas agricultural sources where it is produced from crops including grain (Australia) and sugarcane (Australia and Brazil), beet (Europe) and corn (United States).

Synthetic ethanol can be derived from fossil-sourced hydrocarbons. Synthetic ethanol is produced in two countries - Saudi Arabia and South Africa. It is highly unlikely that synthetic ethanol will be blended into New Zealand petrol but Government agencies will be monitoring ethanol uptake to determine if this happens.

Benefits of ethanol-blended petrol

The ethanol that will blended with petrol for New Zealand will be derived from renewable agricultural sources, not from fossil sources. One of the benefits of using ethanol is that it reduces net CO2 emissions. For this reason ethanol can help New Zealand meet its international obligations to reduce greenhouse gases that contribute to global climate change.

The exact environmental benefits may differ depending on the source. Ethanol-blended petrol can burn more cleanly, and can help reduce pollution and improve air quality. However, the difference it makes to air pollution also depends on the design and condition of an engine and how the vehicle is driven.

Ethanol - use in fuels

There's nothing new about using ethanol as fuel. In fact, the idea is as old as the industry itself. Henry Ford worked with it in the 1880s then used it for the Model T that launched the motoring revolution.

Motorists in some parts of the United States have used ethanol-blended petrol for nearly 20 years. Today, it accounts for around 18% of all petrol sold in the US and petrol-ethanol blends are also sold in Europe, South America and some parts of Australia.

Testing ethanol for NZ use

The use of petrol-ethanol blends is not new to New Zealand as there were vehicle trials of petrol blended with ethanol in the 1980s, a time when many countries were looking at ethanol to reduce their dependence on fossil fuels. There has been much experience in the use of petrol-ethanol blends overseas since. This experience includes at least 15 years of use of petrol-ethanol blends in Australia with a vehicle fleet not too dissimilar to New Zealand's.

Ethanol and car performance

Ethanol does have octane-enhancing characteristics. However, the 'blendstock' the ethanol is added to may be specified differently to ordinary petrol. There is, therefore, no guarantee that the octane of ethanol-blended petrol will be much above the octane value displayed at the pump.

In most vehicles it's highly unlikely drivers will notice any performance difference with ethanol-blended petrol. However, because ethanol introduces more oxygen into the fuel the mixture becomes a little leaner in vehicles that have engines with simple fuel metering systems such as carburettors. With this older vehicle technology there might be an occasional stumble under acceleration, especially in colder weather, but this is more likely to be due to the engine state of tune not being ideal. A vehicle tuned correctly for use on ordinary petrol would normally not exhibit problems when using ethanol blends.

If your vehicle has not been well maintained or is more than 10 years old a mechanic should check for water in the fuel tank and, if necessary, clean out the tank and fuel lines and check the fuel hoses and seals before the vehicle can use ethanol-blended petrol. It cannot be used in aircraft, boats or marine applications.

Ethanol and diesel

Current legislation does not allow ethanol in diesel. However, EECA is currently working on the potential for the use of other renewable options for diesel including biodiesel - either straight or as a blending agent with ordinary diesel. Biodiesel is made from animal or vegetable oils and/or fats.

The role of ERMA

The retail sale of ethanol blends up to 10% was allowed by the Petroleum Products Specifications Regulations 2002. But ERMA approval was required under the Hazardous Substances and New Organisms Act (HSNO), in order to permit the manufacture, import or use of ethanol-blended petrol in New Zealand.

As part of EECA's role in facilitating the uptake of renewable energy, EECA made the application to ERMA on behalf of anyone and everyone who might want to manufacture or import ethanol-blended petrol. The application was supported by all oil companies and by Fonterra.

Ethanol and the Petroleum Products Specifications Regulations 2002

As well as allowing the retail sale of ethanol blends up to 10%, the Petroleum Products Specifications Regulations 2002 also state that pumps dispensing ethanol-blended petrol must be clearly labelled as containing ethanol and that consumer information about the possible vehicle maintenance requirements that may result from using ethanol blends must be available at the point of sale.

ENDS

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