Government consults on biofuels sales obligation

Associate Transport Minister Judith Tizard and Climate Change Minister David Parker today released a discussion document outlining a proposed sales obligation for biofuels, as part of the government's response to climate change.

The proposal would require oil companies to sell a minimum percentage of biofuels in transport fuels, beginning with 0.25% of sales in 2008, and rising to 2.25% by 2012, Judith Tizard said.

"Diversifying into renewable transport fuels will reduce our dependence on imported oil. Using biofuels will also reduce vehicle emissions, greenhouse gas emissions and improve air quality."

Although imported biofuels could be used, there is enough domestic feedstock from within the agricultural sector to produce the amount of biofuels needed to meet the minimum obligation.

Energy and Climate Change Minister David Parker said biofuels would move New Zealand towards a more sustainable energy future, as well as providing significant climate change benefits.

"If the proposed sales obligation is met, we will not need to account for over a million tonnes of carbon dioxide emissions under the Kyoto Protocol, due to the replacement of fossil fuels by biofuels. This represents more than $16 million that would be saved by the Government in respect of its Kyoto Protocol commitments in the first commitment period (2008-2012) alone."

Mr Parker said the minimum was the starting point. "Once the legislative framework and infrastructure is in place, we can expect biofuels to make up a greater proportion of our transport fuel than these mandated minimum levels."

The discussion document and reports on the supply, distribution, vehicle compliance, and economics of bringing biofuels to the market in New Zealand are available at http://www.transport.govt.nz/biofuels-sales-obligation-discussion-document/ or from the Ministry of Transport. Submissions close on 20 October.

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