Shell Supportive - But Economics Must Be Right

Shell Supportive Of Ethanol In Petrol - But Economics Must Be Right

Shell New Zealand today said it was pleased that the Environmental Risk Management Authority (ERMA) has cleared the use of ethanol for blending into petrol (E10), however the oil company said that further work needed to be done before ethanol could form a part of New Zealand's future fuel mix.

"Shell helped pay for the application to ERMA, and we are supportive of the adoption of ethanol into the New Zealand fuel system as part of our ongoing commitment to sustainable solutions to future fuel needs, and our commitment to the environment.

"However, Shell will need to review the economics of ethanol blended with petrol in light of the ERMA decision and the pending Government decision on the excise treatment of fuel ethanol," Shell's Retail Manager Mark Nobilo said.

"ERMA has identified extra controls for the handling and storage of E10 blends, and Shell needs to study these closely to see what implications they may have for our current operations.

"With Shell alone pumping over 750 million litres of petrol a year, and the total amount of ethanol available in New Zealand being about 20 million litres, it is obvious there is a serious shortfall in the availability of ethanol to meet oil company needs. This will limit the early introduction of blends into New Zealand even at the maximum petrol-ethanol blend limit of 10% ethanol by volume.

"As well, decisions are still to be made on the excise regime for ethanol and the outcome of these deliberations will also be critical. Use of ethanol in fuel in other countries is subsidised by Government in many cases.

"As the largest supplier of bio fuels in the world, Shell is fully behind the introduction of bio fuels on a country by country basis. We have worked closely with the Energy Efficiency and Conservation Agency (EECA) and ERMA to ensure that ethanol is an option for New Zealand in the future and we will continue to work with the relevant authorities to assess the use of ethanol in New Zealand," Mr Nobilo said. . ENDS

ENDS

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