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NZ Biofuel Manufacturers Association Formed

NZ Biofuel Manufacturers Association

Media Release: March 13

Major players in New Zealand’s fledgling biofuel manufacturing sector believe there are severe risks to its viability.

Seven of the companies that plan to supply New Zealand with biodiesel or ethanol have formed the New Zealand Biofuel Manufacturers Association (NZBMA) so that it can raise the issues confronting the sector with a united voice.

Spokesman for the association Dickon Posnett says submissions to the Biofuels Bill are being heard by Parliament’s Local Government and Environment Select Committee at the moment, but the NZBMA is concerned the issues that threaten its industry are not fully understood by consumers.

There are three main risks to any future biofuel manufacturing and research and development capacity becoming established once the proposed Biofuel Sales Obligation creates a significant demand, the NZBMA says.

The first key issue is where New Zealand stands in relation to the import of cheap biofuels from the United States. Mr Posnett says the subsidized, American “splash and dash B99” fuels have decimated the European biodiesel industry and have become the focus of an international trade complaint.

The European Union’s ambassador in Washington complained this week the US tax subsidies are damaging the industry in Europe and threaten to cloud a strong US-EU commercial relationship.

The term B99 relates to biodiesel imported or manufactured which then has 1% or less fossil diesel added before being exported – dubbed “splash and dash”. In the US this practice attracts a tax credit of nearly US30c/litre. That puts its price on arrival in the EU, for example, below that of local raw materials, Mr Posnett says.

NZBMA’s members are further concerned the Ministry of Economic Development is recommending relaxing proposed regulations for NZ biofuel quality standards, specifically to allow entry for the US product (frequently soy-based biodiesel).

This raises the second issue for the NZBMA, concern about the quality and type of biofuels to be used by oil companies to satisfy the proposed biofuels sales obligations in New Zealand.

Mr Posnett says international research has shown that some biofuels do not improve greenhouse gas emissions levels. It is also known that the use of food crops for fuel has caused a dramatic price hike for grains and oils.

The NZBMA wants the quality standards proposed and testing systems enshrined in biofuels legislation to ensure biofuels at the pump in New Zealand are credible for consumers and actually address climate change issues.

“Surely New Zealand, with its growing international reputation for leading climate change and renewable energy solutions should not seek easier options that may tarnish its position,” Mr Posnett says. “This is more particularly so because NZ is blessed with raw material that converts to the best environment biofuel commercially available.”

A third and more difficult issue is how to address the proposed fuel duty differential between ethanol and biodiesel. NZBMA members agree that with ethanol not being subject to fuel duty and biodiesel being taxed through the road user charge, oil companies will be encouraged to import sugar cane ethanol from Brazil for the economic advantage, at taxpayers’ expense.

“The NZBMA believes without a level playing field being built into the proposed legislation to address these issues, there is little chance of a sustainable, renewable fuels sector being established here,” Mr Posnett says. “Furthermore, New Zealand will remain reliant on imports for its security of fuel supply.”

ends

About the NZBMA:

The aim of the Association is: ‘To support the growth and development of a sustainable Biofuel industry in NZ’

Initial members are:

Argent Energy New Zealand Ltd

Biodiesel New Zealand

Biodiesel Oils NZ Ltd

Ecodiesel Ltd

Biodiesel Australasia Ltd

Flo-Dry Engineering Ltd

Aquaflow Bionomic Corporation

ENDS

© Scoop Media

 
 
 
 
 
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