In the NSW Upper House yesterday, Greens MP Mr Jeremy Buckingham moved a motion to repeal the 2016 Biofuel Regulation.

Had this motion been successful, it would have immediately halted the mandate and forced the NSW Government to revisit the Biofuels Mandate – providing some welcome relief for the many small fuel retailers that have been made liable for selling biofuels (i.e. E10 and Biodiesel) under the amended laws that were introduced on 1 January 2017.

In speaking to his amendment, Jeremy Buckingham argued strongly that the Biofuels Regulation was not in the interest of the NSW Environment, NSW motorists or the many small fuel businesses that service the NSW community.

Mr Buckingham quite rightly drew attention to the fact that there are a host of government agencies – including the Australian Productivity Commission, the Australian Competition and Consumer Commission and the NSW Independent Pricing and Regulatory Tribunal – that have all challenged the efficacy of the legislation from a position of objective assessment.

Mr Buckingham drew attention to the point that seems to be lost on most NSW politicians.

That is, that achievement of the mandate requires that fuel retailers make costly changes to their business with a view to chasing an obviously unattainable target of E10 accounting for a minimum 60% of all petrol sales in NSW – a target that is ludicrous given that 8 years of prior operation of the mandate has only seen E10 account for 24% of all petrol sales to date (with many motorists electing to purchase the higher priced premium fuels over E10).

“This means that the majority of retailers will never meet the mandate and will go to the wall because they are selling a product that they do not want to sell and that the community does not want”, Mr Buckingham said.

Perhaps the most damming assessment was Mr Buckingham’s statement – as a member of the NSW Greens – that the NSW biofuels arrangement does not deliver any significant environmental benefit and that the NSW government’s efforts would be better focussed on preparing for electric vehicles.

The ensuing Upper House debate was interesting for two principal reasons.

First, senior government and Labour members appeared to have a poor understanding of the impact of the changed laws on small fuel retailers.

The Hon. Sarah Mitchell (NSW Minister for Early Childhood Education, Aboriginal Affairs and Assistant Minister for Education) trotted out the NSW Government’s well-worn and erroneous defence for the expanded biofuels laws – without addressing the substantive issues raised by Mr Buckingham.

Most notably, the Minister did not appear to be aware that the changed laws mean that many small NSW businesses are now required to comply with the new mandate – and that this is the key source of industry anger about the new laws.

“Major retailers captured by the current laws are essentially the oil companies, BP and Caltex, supermarket chains such as Woolworths, Coles and 7/11 and those who operate and control more than 20 service stations”, Minister Mitchell said.

“It is extremely disappointing that those charged with making decisions about the impact of these new laws on the businesses that comprise our industry have such a poor understanding of the changed laws that came into effect on 1 January 2017”, said ACAPMA CEO Mark McKenzie.

“If the Minister had taken the time to read the new Regulations that came into force on 1 January 2017, then she would have realised that her statement was patently incorrect and that the net effect of these changed laws is to capture many small family owned businesses – some of whom operate just one site”, Mark continued.

The same criticism can be levelled at NSW Labour MLC, the Hon. Peter Primrose, who also suggested that the impact of the changed laws would largely fall to ‘Big Oil’. His comments merely demonstrated that he too had a very poor understanding of the changed laws and their likely impact on small, family owned fuel retail businesses across NSW.

The second notable element of the discussion were the statements made by some Government MP’s that the 2016 Biofuels Regulation makes provision for exemptions – and that maintenance of the Regulation was therefore necessary to navigate the problems that had been created by such poor legislation – at least until the primary legislation was repealed.

The Hon. Dr Peter Phelps, a member of the NSW Coalition Government, reiterated his continued and very public opposition to the NSW Biofuels Mandate in its entirety.

Demonstrating a comprehensive understanding of the real risks posed to small fuel retail businesses in NSW, the Hon. Dr Phelps noted that the Regulation at least afforded an opportunity for businesses to seek an exemption from the new laws.

Dr Phelps went on to continue his attacks on the validity of the primary legislation enacted by his own government, noting that the new laws effectively ‘criminalised’ service station operators for ‘the lawful purchasing decisions of their customers, which is a ridiculous state of affairs”.

The Hon. Matthew Mason-Cox (also a member of the NSW Coalition Government) supported Dr Phelp’s criticism of the legislation and the proposition that there was a need to retain the regulation as it provided the Government with the ‘only way out of this mess’ by allowing small businesses to secure exemptions where a business case could be established.

In his concluding remarks, Mr Jeremy Buckingham stated that the NSW Greens would continue to campaign on this issue until the Act was repealed.

Mr Buckingham also noted previous ACAPMA advice that the Association would be reassessing the impact on industry once the outcome of the first round of exemption applications was known (i.e. end of July 2017).

“ACAPMA welcomes the leadership shown by the NSW Greens and the courage shown by the small number of government MP’s who continue to challenge this legislation based on it being unsound and not in the interest of the NSW community at large”, said Mark McKenzie.

“We also hope that key members of the NSW coalition government and NSW Labour actually take the time to familiarise themselves with the detail of the changed laws and the fact that the real impact of these changes are being shouldered by smaller fuel retailers – not ‘big oil’ as wrongly asserted during yesterday’s parliamentary debate”, said Mark.

In the meantime, ACAPMA will continue to monitor the performance of both the exemption process and the interpretation of one of key Clauses of the Regulation especially the interpretation of Clause 8 which appears to require ‘nozzle matching’.

ACAPMA is wholly opposed to any attempt by NSW Fair Trading under these changed laws to dictate the configuration of fuel dispensing infrastructure on the forecourt of a service station by requiring additional nozzles for E10 – effectively promoting the sale of E10 by constraining the availability of the non-ethanol products that are sought by the majority of NSW motorists.

“We are firmly of the view that such action, should it occur, constitutes a restraint of trade and we will fight any such interpretation of the Regulation accordingly”, said Mark.

“At a meeting last week with the responsible Minister – the Hon. Matt Kean – ACAPMA was given an opportunity to air its’ concerns and received a commitment from the Minister to work cooperatively with the industry to address specific concerns as they arise”, said Mark.

“We have effectively been asked to trust that the NSW Government’s exemption framework will protect against any adverse consequences on our industry and we will assess our position again in late July – once the outcomes of business applications for exemption are known”, said Mark.

Fuel retailers who are experiencing significant challenges with the legislation or who have their exemption application refused are strongly encouraged to contact ACAPMA over coming months by calling 1300 160 270 or emailing markm@acapma.com.au