Over the last 2 weeks, the Queensland Minister for Energy Biofuels and Water Supply – the Hon. Mark Bailey MP – sent out letters to fuel retailers seeking information on the status of their preparations for the biofuels mandate.

The Minister’s letter, and the commencement of the new Financial Year means, it is time for all retailers to prepare for the new laws which come into force from 1 January 2017.

The new legislation requires that all fuel retail businesses with 10 or more retail sites make all reasonable efforts to ensure that E10 sales represent at least 30% of their petrol sales (i.e. 3% substitution of ethanol).

In addition, the legislation requires that smaller fuel retailers (i.e. businesses with less than 10 sites) sell E10 at any site that sells more than 1ML of petrol products per year.

A summary of the new Queensland laws and the implications for fuel retail businesses can be found at http://www.acapma.com.au/wp-content/uploads/2016/04/ACA094_how_to_guide_QLD.pdf.

All fuel retail businesses in Queensland should now have registered their business with the Queensland Department of Energy and Water Supply (DEWS). Any business that has not done so, should immediately make contact with DEWS to avoid being fined for a breach in their reporting obligations under the new laws (see https://www.business.qld.gov.au/industry/retail-and-wholesale/requirements-fuel-sellers).

From 1 January 2017, all fuel retailers affected by the mandate will be required to provide sales volume reports to DEWS on a quarterly basis. Where these reports indicate that the retailer has failed to achieve the target of 30% E10 sales, they will be required to demonstrate that they have made (and continue to make) all reasonable efforts to achieve the sales target.

“Obviously, the practical interpretation of ‘all reasonable efforts’ is the aspect of the law that is likely to be the subject of some considerable debate in the early months of operation of the new laws”, said ACAPMA CEO Mark McKenzie.

The laws do not require, for instance, that fuel retail businesses have E10 at all their sites -particularly at those sites where it may be uneconomic to make the infrastructure changes to support the sale of the fuel.

Fuel retailers must, however, be able to convince the government that they are taking all reasonable steps to sell ethanol blended fuel particularly in cases where they may have repeatedly failed to achieve the E10 volume sales target.

“We are currently working with the Queensland Government on the Ministerial Guidelines that will be used to provide detailed guidance on these matters”, said Mark.

“We expect these discussions will be finalised by the end of the month and we plan to make information on the detailed administration of the new laws available to all of members from early August”, Mark added.

The focus of ACAPMA’s current conversations with Government is to ensure that all possible efforts are made to minimise the costs of compliance to fuel retailers and provide safeguards for those businesses that simply cannot afford to comply with the new laws.

“To date, these conversations have been fair and constructive”, said Mark.

ACAPMA is also gearing up to provide fuel retailers with assistance and advice in respect of submitting applications for exemption from the mandates on economic and/or other grounds, as identified in the new legislation.

In the meantime, Queensland fuel retailers with more than 10 sites (or smaller fuel retailers with sites selling more than 1 ML per year of petrol products) should now be taking steps to:

a) Scope the nature of works required at each of their sites to support the storage and sale of E10. (For smaller fuel retailers, this work only need be completed for sites selling more than 1ML of petrol products per year).

b) Secure quotations for the cost of these works from a suitably qualified contractor (ideally at least 2 quotations).

Once armed with the above information, fuel retailers will be in a position to determine whether the cost of these works constitutes a significant risk to the ongoing economic viability of their business.

“Subject to the outcome of the current discussions with the Queensland Government, we expect to be able to help our members better understand whether they are likely to be exempted from the mandate and assist them with the preparation and submission of an application for exemption”, said Mark.

“We accept that this is an uncertain time for many fuel retailers in Queensland and we are committed to providing all assistance necessary so that fuel retailers fully understand the options available to them”, said Mark.

Businesses that are not currently members of ACAPMA are very welcome to join the Association. Membership not only provides access to assistance with the new biofuels laws but also provides all of the business support and employment support benefits (including information on Award pay rates) that come from being a member of Australia’s peak employer association for fuel retail and fuel wholesale businesses.

Further information about ACAPMA membership can be found by visiting http://www.acapma.com.au/membership_information/.

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