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Introducing New Zealand's First Flexi-Fuel Vehicle

IMMEDIATE RELEASE


Introducing New Zealand's First Flexi-Fuel Vehicle – the Ford Focus

AUCKLAND, New Zealand, 14 September 2006

Ford today revealed New Zealand's first manufacturer-assembled Flexi-Fuel Vehicles (FFV) – two 1.8 litre Ford Focus cars.

"These two FFV evaluation vehicles highlight Ford's global ongoing commitment to offer customers environmentally friendly, yet highly affordable vehicles," said Mr. Richard Matheson, Managing Director of Ford New Zealand.

"Bio-fuels have the potential to reduce New Zealand's dependence on imported crude oil and will increase the use of a renewable and sustainable energy source.

"Additionally, the use of bio-fuels can assist New Zealand in meeting its Kyoto Protocol obligations as the emissions from biofuels are not counted as greenhouse gas emissions under the Kyoto Protocol, whereas emissions from the use of mineral fuels are," said Mr Matheson.

Ford's FFVs are capable of running on a fuel blend known as E85 (85% bio-ethanol and 15% petrol), petrol only or any mix of both. The use of bio-ethanol, in combination with FFV technology, can lead to a 70% to 80% reduction in overall carbon dioxide (CO2) emissions compared to a traditional petrol engine.

Like all of Ford New Zealand's Focus range, the Focus FFVs – a 1.8 litre Sublime Green wagon and 1.8 litre Silver hatch – are also manufactured in Germany and are visually identical to their petrol stablemates aside from unique Flexi Fuel badging on the rear.

"With its European design, Focus has always been recognised as a vehicle offering superb build quality and class leading driving dynamics – it is a quality product that is fun to drive, incredibly comfortable, safe and reliable," said Mr Matheson.

"Currently, fuel blends of up to ten percent ethanol (E10) are permitted in New Zealand but are not readily available for sale despite many new vehicles (including almost all of Ford's vehicle range) having the capacity to run on E10 fuel.

"Over the past months, we have worked extensively with the Energy Efficiency and Conservation Authority (EECA) and Gull New Zealand who are currently pursuing a Controlled Release Permit for E85 fuel under the HZNO Regulations to manufacture and distribute sufficient quantities of E85 bio-ethanol fuel to run this vehicle in the 2006 Energy Wise Rally in November.

"After that time, and providing an appropriate E85 distribution source can be established, we will be looking for an environmentally-aware Government department, city council or other organisation to run a pilot scheme with a number of these FFVs.

"We anticipate that this organisation would need to have access to their own petrol bowsers that could dispense E85 fuel – however, it is important to remember that these vehicles are truly flexible in nature, and can run on petrol," said Mr Matheson.

Heather Staley, Chief Executive of the Energy Efficiency and Conservation Authority (EECA), said EECA is pleased to see Ford giving their customers the choice of vehicles that are capable of using more climate-friendly fuels.

“Government is working to ensure New Zealand consumers will soon have the option of biofuel blends, and higher level blends in the future,” said Ms Staley.

Easy technology to use

The Focus FFVs are capable of running on both bio-ethanol (E85) and petrol or any mix of both up to 85% ethanol, in one fuel tank, making them truly flexible, both in terms of their technology and customer operation.

As bio-ethanol is a renewable fuel derived from plants (such as cereals and sugar beet), biomass (such as wood waste) or, in New Zealand's case, whey as a by-product of the dairy industry's milk processing, the primary environmental benefit is the reduction of CO2 emissions – the main greenhouse gas thought to be responsible for global warming.

When producing bio-ethanol fuel, the CO2 circle can, to a large degree, be "closed-loop". The photosynthesis process of plants sees carbon dioxide absorbed by the plants during their growth and subsequently released when the bio-ethanol is used as fuel. Thus, from a holistic "well-to-wheel" perspective, the use of bio-ethanol can lead to a 70% to 80% reduction in overall CO2 emissions compared to a traditional petrol only engine.

Another key advantage is the relative cost.

"While the two New Zealand FFVs are primarily evaluation vehicles, in other markets such as Sweden, Ford is able to offer FFVs to customers at similar prices to petrol-only vehicles.

"With tax exemptions from the Swedish Government, bio-ethanol is two-thirds the price of petrol, so FFVs make good economic and environmental sense for the Swedish customers," said Mr Matheson.

Offering this kind of benefit at a low cost is highly unusual when compared to other environmentally advanced technologies.

In addition to providing CO2 benefits the Focus Flexi-Fuel improves air quality with lower levels of emissions such as nitrous oxide (NOx) than many conventional petrol vehicles.

Delivering truly flexible FFV models

Today's announcement by Ford New Zealand follows similar initiatives in European markets and Mr. Matheson offers the success-story of Ford's FFV technology in Sweden as an example of what can be accomplished through co-operation and partnership between companies from different industries (including fuel providers and distributors), as well as local and national government and non-governmental organizations (including fleet and private customer associations)

Since the market introduction of the first generation Focus FFV in Sweden in 2001, more than 15,000 Ford FFVs have been sold. This accounted for 80 percent of all Focus sales and 80 percent of sales of environmentally friendly cars in Sweden in 2004. The most recent data shows that 40 percent of all Ford sales in Sweden are FFVs.

In addition, Ford is participating in multi-stakeholder pilot projects in the UK, Ireland and Spain that are aimed at exploring and testing the potential for large scale application in these markets. Other European market initiatives are expected to follow soon.

With these latest developments, Ford remains the pace-setter and leading car manufacturer for ethanol-powered vehicles in Europe. FFVs are part of Ford's broad portfolio of environmentally advanced vehicle technologies and its commitment to develop and offer them as an affordable alternative for our customers.

"While we concede that New Zealand has considerable ground to make-up in terms of its bio-ethanol infrastructure compared to Europe, Ford's success at introducing Flexi-Fuel Vehicles across the European continent demonstrates our commitment to making mobility more sustainable," said Mr Matheson.

Ethanol in New Zealand

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 such as gin, vodka and Ready-To-Drink premixed drinks. 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.

A global commitment

Last year Ford Chairman and CEO Bill Ford laid out his blueprint for the company's future, focusing every aspect of the business on innovation as its core strategy going forward. This includes a commitment to FFVs throughout Ford's global operations.

In North America, four new vehicles for 2006 can run largely on ethanol, with an expected production of up to 250,000 FFV units in 2006 there. In Thailand, Ford has recently introduced a version of its successful Focus model capable of running on regular petrol as well as on a specific bioethanol/petrol blend offered in that market. In Brazil, FFV and dedicated bio-ethanol technology are already long established alternatives to conventional technologies.

In the past decade, Ford has put out more than 1.5 million ethanol-powered vehicles on the roads worldwide.


ENDS

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