Blow for biofuel bill
The Biofuel Bill, which is being considered by Parliaments environment select committee, requires oil companies to sell a minimum percentage of biofuels from July 1.
The mandatory requirement would start at 0.53 per cent of energy, rising to 3.4 per cent in 2012.
The commissioner, Jan Wright, told the committee yesterday the bill could do more harm than good.
Though biofuels had a big advantage over fossil fuels in that they absorbed carbon dioxide while they were growing, some had a carbon footprint equal to or bigger than fossil fuels due to high emissions from infrastructure and cultivation.
Ms Wright produced a graph showing that some biofuels made from corn, soy, rape seed, rye and potatoes had a very poor life-cycle carbon footprint. Yet rape seed was shaping as the main likely form of locally produced biofuel.
New Zealand produced reasonable amounts of the waste products whey and tallow, which produced biofuels up to 80 per cent more carbon-efficient than fossil fuels, but most of these were already sold into markets.
Fonterra produced about 20 million litres of whey-derived ethanol a year and sold about 10 per cent to Gull for fuel. The rest was sold overseas, leaving little for additional biofuel production.
About 85 per cent of the annual 150,000 tonnes of tallow production was also exported.
To meet the mandatory requirements, New Zealand would have to import biofuels, which in some cases were worse than fossil fuels.
Ms Wright said the growth of biofuel crops overseas could result in the felling of forests to free up land, and shortages in land for food production that would push up prices.
The bill needed to set a life-cycle sustainability standard, but it would be difficult to ensure overseas-grown crops complied. Locally produced biofuels were unlikely to meet the standard before 2012.
Ms Wright said so-called second-generation biofuels which used more of a plants biomass, made from products such as wood, would be much more sustainable but were unlikely to be commercially viable before 2012. By then plug-in electric vehicles might represent a better option for reducing emissions.
Enforcing mandatory standards ahead of that date risked promoting investment in low-quality biofuels that would quickly become obsolete.
Ms Wright recommended that the bill not proceed. If it did proceed, its start date should be delayed so that life-cycle sustainability standards could be put in place.
If the Government wanted to cut transport emissions it should do so initially by ramping up emissions standards on vehicles through a fiscally neutral tax on larger vehicles. New Zealand was an international outlyer in that area.
Ms Wrights call for the bill to be scrapped follows fuel industry executives calling last month for extensive changes. BP managing director Peter Griffiths said the bills target was one of the highest in the world and could not be physically delivered at the moment.
BP was concerned there would be price rises for both petrol and diesel of about seven cents a litre to meet infrastructure costs.
We want to see biofuels in New Zealand but not when the cost to customers is so high and the environmental benefits are negligible.
