Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search


Ethanol in petrol blends to be free from duty

Ethanol in petrol blends to be free from excise duty

Ethanol used in petrol blends is to be free from excise duty for at least two years, in recognition of its environmental benefits.

The Transport Minister Paul Swain and the Convenor of the Ministerial Group on Climate Change Pete Hodgson say the use of ethanol in petrol blends will reduce greenhouse gas emissions from the transport sector.

The Environmental Risk Management Authority last month approved the use of up to 10 percent ethanol in petrol blends, following an application from the Energy Efficiency and Conservation Authority (EECA).

"The use of renewable ethanol in petrol blends will help reduce transport's dependency on fossil fuels and ensure the sector contributes to reductions in climate change emissions," says Mr Swain.

"Motorists will have a more environmentally friendly choice of fuel that can be used in most petrol vehicles, and it will be the first time they can choose a transport fuel with a renewable component."

"The decision reflects the objectives of the New Zealand Transport Strategy, which include protecting and promoting public health, ensuring environmental sustainability, and assisting economic development." says Mr Swain.

Mr Hodgson says reducing greenhouse gas emissions from the domestic transport sector is one of the toughest challenges for climate change policy.

"Our best hope for progress in reducing transport emissions is to aim for a more energy-efficient transport system and to encourage lower-emission technologies where possible. The availability of ethanol-blended petrol will be another step in the right direction."

Mr Swain says "it is difficult to determine exactly how much ethanol will be used in petrol blends, but estimates of the potential loss of revenue to the Crown range from $1.722 million to $3.158 million (excl GST) per annum."

This is based on a scenario where between 6 million and 11 million litres of ethanol produced by the New Zealand dairy industry could be utilised.


Any ethanol used in a petrol blend must be rendered unsuitable for use in the production of alcoholic drinks in order to free from excise, ensuring it could not be used to evade the excise of $39 per litre of alcohol.

An excise of 10.5 cents a litre is imposed on LPG and CNG.

Petrol attracts excise of 18.475 cents per litre which is allocated to the Crown Account while 17.725 cents per litre goes towards transport infrastructure.

An Accident Compensation Corporation Levy of 5.08 cents is also payable.

Decisions on ethanol at the end of the two year period will recognise its environmental benefits and will be made in consultation with the industry.

At the end of the two year period the MOT will review the level of uptake of ethanol blended fuel, and it will also monitor whether synthetic ethanol is being imported.

Synthetic ethanol is produced in South Africa and Saudi Arabia but has no climate change benefits as it is produced from non-renewable fossil stocks such as coal or natural gas.

Transport produces 16 percent of all New Zealand's climate change emissions and is the fastest growing consumer of energy and producer of greenhouse gas emissions.

USEFUL WEBSITES for information on fuel specifications for information for consumer and motor vehicle groups for information on the ERMA consent

© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines

Scoop 3.0: How You Can Help Scoop’s Evolution

Entering into its third decade of operation, the Scoop news ecosystem is set to undergo another phase of transformation and evolution.

We have big plans for 2018 as we look to expand our public interest journalism coverage, upgrade our publishing infrastructure and offer even more valuable business tools to commercial users of Scoop. More>>


Speaking Of Transport: Public Engagement On Wellington Scenarios

“Our work on possible solutions for Wellington’s transport future is ongoing, but has progressed to the stage where we’re ready to share our ideas with the public and seek their feedback to help guide our next steps...” More>>


Parental Leave: National's Time-Sharing Change Fails

National has proposed a change to the Parental Leave and Employment Protection Amendment Bill that would allow both parents to take paid parental leave at the same time, if that is what suits them best. More>>


Train Free Thursday: Workers Strike To Defend Terms Of Employment

"They signed up to these conditions a year ago when they got the contract for Wellington's rail services. Now they're trying to increase profits by squeezing frontline workers." More>>


Seclusion: Ombudsman Emphasises Importance Of Monitoring

Disability Rights Commissioner Paula Tesoriero says that while there have been changes to the Education (Update) Amendment Act 2017 to prohibit the use of seclusion, the report is an important reminder of the importance of regular monitoring of schools. More>>


United Future History: "All Good Things Must End"

'We’re extremely proud of what we’ve achieved over the past 15 years, working alongside the government of the day, both National and Labour.' Mr Light told members on Monday. More>>

Gordon Campbell: On The TPP Outcome, And The Hobbit Law

Somehow the Trans Pacific Partnership trade deal has come lurching back from the dead – and as predicted in this column last week, the member countries gathered in Vietnam have announced a deal in broad principle, shunted aside until a later date the stuff on which they don’t agree, and declared victory. More>>

Agreeing To Differ: Greens Maintain Opposition To TPPA
“The Green Party has long opposed the TPPA. The new proposed deal, which came out of the weekend’s talks, still contains key ISDS concessions to corporations that put our democracy at risk, so our position remains the same,” said Green Party trade spokesperson Golriz Ghahraman. More>>


Monitoring Report: A New Chapter For Children’s Rights In New Zealand?

The Children’s Commissioner is calling on the country to embrace children’s rights to ensure their overall well-being. More>>





Featured InfoPages

Opening the Election