In 2012, the O’Farrell Coalition Government was forced to back down on laws that would have resulted in the prohibition of unleaded petrol in favour of Ethanol-blended fuel (i.e. E10). The back-down followed a significant public backlash against the NSW Government’s proposal to force motorists to purchase E10 or the higher priced premium fuels if they didn’t want to use ethanol (Car Advice 2012)
Twelve months ago, the Baird Government announced that it planned to tighten its Biofuel legislation in an effort to encourage more motorists to purchase E10 despite a comprehensive IPART report recommending against a continuation of the failed policy.
In March of this year, the NSW Government introduced new legislation into parliament designed to increase E10 sales in NSW. The Government committed, however, to consult with industry on the design of the new Regulations that would be used to enforce this legislation.
Despite this commitment, two weeks ago the Baird NSW Government quietly passed new Regulations that will actually force service stations to choose between spending an average of $300,000 to install new underground tanks to store and sell E10 – or replacing unleaded fuel with E10 at their service stations.
“After previously promising to consult fuel retailers on the detail of the new laws and delaying the process on three separate occasions, the Baird Government instead chose to go its own way and quietly make the Regulation in the NSW parliament two weeks ago, said ACAPMA CEO Mark McKenzie.
“Faced with the choice of spending large sums of money for additional fuel tanks or removing regular unleaded petrol from sale, retailers selling more than 3.6ML of liquid fuels will likely be forced to remove unleaded petrol from their service station sites”, said Mark
“This amounts to the NSW Government trying to force the majority of NSW motorists to purchase E10 by stealth”, said Mark
“Motorists in regional areas are likely to be the worst hit as the lower volumes of fuel sales in regional areas means that most service stations will have no choice but to replace unleaded petrol with E10”, said Mark
“The Baird Government is effectively taking away the right of motorists to choose what type of fuel that they put in their own cars”, said Mark.
It is worth noting that this policy will not deliver any tangible benefit to the NSW Community at large. The environmental benefits of biofuels are highly contestable with recent Federal Government Studies (https://www.anao.gov.au/work/performance-audit/ethanol-production-grants-program and http://www.industry.gov.au/Office-of-the-Chief-Economist/Publications/Documents/other/asssessment-ethanol-production-grants-program.pdf) suggesting that taxpayer investment in biofuels delivers marginal environmental benefit but no significant economic or employment benefit.
“In fact, even the NSW Government’s own report produced by IPART (https://www.ipart.nsw.gov.au/Home/Industries/Special-Reviews/Reviews/Ethanol/Assessment-of-options-to-increase-the-uptake-of-ethanol-blended-petrol/news/Final-Report-on-options-to-increase-uptake-of-ethanol-blended-petrol-in-NSW) concluded that the only party that would benefit from these new laws would be the State’s monopoly biofuels producer – the Manildra Group – who coincidentally has been a large donor to the NSW Liberal Party and the NSW National Party (and the NSW Labour party) in recent years”, said Mark.
“Political donations are the only reason this bad policy has got so far”, said Mark
“The whole thing is scandalous and amounts to private companies seemingly being able to buy policy for their own benefit – with the fuels industry and NSW Motorists the big losers”, said Mark
ACAPMA plans to fight this legislation from its commencement on 1 January 2017 all the way to the next NSW State Election, said Mark.