Thursday, 13 March 2008, 5:48 pm
Press Release: NZ Biofuels Manufacturers Association
NZ Biofuel Manufacturers Association
Media Release: March 13
Major players in New Zealand's fledgling biofuel manufacturing sector
believe there are severe risks to its viability.
Seven of the companies that plan to supply New Zealand with biodiesel or
ethanol have formed the New Zealand Biofuel Manufacturers Association
(NZBMA) so that it can raise the issues confronting the sector with a
Spokesman for the association Dickon Posnett says submissions to the
Biofuels Bill are being heard by Parliament's Local Government and
Environment Select Committee at the moment, but the NZBMA is concerned
the issues that threaten its industry are not fully understood by consumers.
There are three main risks to any future biofuel manufacturing and
research and development capacity becoming established once the proposed
Biofuel Sales Obligation creates a significant demand, the NZBMA says.
The first key issue is where New Zealand stands in relation to the
import of cheap biofuels from the United States. Mr Posnett says the
subsidized, American "splash and dash B99" fuels have decimated the
European biodiesel industry and have become the focus of an
international trade complaint.
The European Union's ambassador in Washington complained this week the
US tax subsidies are damaging the industry in Europe and threaten to
cloud a strong US-EU commercial relationship.
The term B99 relates to biodiesel imported or manufactured which then
has 1% or less fossil diesel added before being exported – dubbed
"splash and dash". In the US this practice attracts a tax credit of
nearly US30c/litre. That puts its price on arrival in the EU, for
example, below that of local raw materials, Mr Posnett says.
NZBMA's members are further concerned the Ministry of Economic
Development is recommending relaxing proposed regulations for NZ biofuel
quality standards, specifically to allow entry for the US product
(frequently soy-based biodiesel).
This raises the second issue for the NZBMA, concern about the quality
and type of biofuels to be used by oil companies to satisfy the proposed
biofuels sales obligations in New Zealand.
Mr Posnett says international research has shown that some biofuels do
not improve greenhouse gas emissions levels. It is also known that the
use of food crops for fuel has caused a dramatic price hike for grains
The NZBMA wants the quality standards proposed and testing systems
enshrined in biofuels legislation to ensure biofuels at the pump in New
Zealand are credible for consumers and actually address climate change
"Surely New Zealand, with its growing international reputation for
leading climate change and renewable energy solutions should not seek
easier options that may tarnish its position," Mr Posnett says. "This is
more particularly so because NZ is blessed with raw material that
converts to the best environment biofuel commercially available."
A third and more difficult issue is how to address the proposed fuel
duty differential between ethanol and biodiesel. NZBMA members agree
that with ethanol not being subject to fuel duty and biodiesel being
taxed through the road user charge, oil companies will be encouraged to
import sugar cane ethanol from Brazil for the economic advantage, at
"The NZBMA believes without a level playing field being built into the
proposed legislation to address these issues, there is little chance of
a sustainable, renewable fuels sector being established here," Mr
Posnett says. "Furthermore, New Zealand will remain reliant on imports
for its security of fuel supply."
About the NZBMA:
The aim of the Association is: 'To support the growth and development of
a sustainable Biofuel industry in NZ'
Initial members are:
Argent Energy New Zealand Ltd
Biodiesel New Zealand
Biodiesel Oils NZ Ltd
Biodiesel Australasia Ltd
Flo-Dry Engineering Ltd
Aquaflow Bionomic Corporation
Check for earlier Pacific Biofuel posts: http://pacbiofuel.blogspot.com/