Biofuel sales targets welcomed

30 August 2005

Biofuel sales targets welcomed but consumer advice needed

The AA has welcomed the Government's announcement that it will do no more than set sales targets for ethanol blended petrol and biodiesel.

"The Government has wisely left the question of how to achieve its biofuel objectives to fuel wholesalers rather than dictate solutions. Fuel wholesalers will probably achieve these targets through strategic partnerships with large fleets, which can place the problem of vehicle fuel compatibility in the hands of professionals," said AA Policy Manager Jayne Gale.

"We support the Government's commitment that the decision to use biofuels is to be a matter of consumer choice rather than compulsory as we do have some concerns that it should not increase the costs for motorists. In Australia, for example, the Government subsidises ethanol production by 36 cents per litre. We would not like to see the introduction of ethanol fuel further increase motoring costs."

Ms Gale said experience overseas also showed that biofuel blends would simply not sell if they were priced higher than unblended product.

"The AA broadly supports the objectives of introducing biofuels, which will be cleaner and reduce dependence on imported oil. If and when the product is made available at retail outlets, the Government needs to ensure that customers know the fuel they are purchasing contains a blend, and whether it is suitable for their particular vehicle without compromising safety, vehicle warranties or vehicle parts," she said.

"It is essential that any biofuel blends sold at retail outlets are clearly and distinctively labelled as such. There is considerable confusion within the motor industry over which vehicle models are compatible with biofuel blends and at what level of blend. The AA recommends that members only use biofuel blended fuels when they know their vehicle has been approved for use with them."

Newer vehicles are more likely to have been designed to run on biofuels. New Zealand has an extremely varied fleet with a large proportion of older vehicles, so it may be some time before we know about the compatibility of all makes and models. Buyers also need to check that replacement parts fitted to their vehicle are also compatible with blended fuels.

"Biofuels are cleaner than mineral fuels and naturally renewable. As such this step toward their introduction is very welcome. The transition to more sustainable transport fuels is likely to take decades and we support the Government taking a 'gradual evolution' rather than 'revolution' approach," she said. "This will give New Zealand greater experience with biofuels".

ENDS

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