The start of the new year saw the commencement of new laws requiring fuel retailers to stock and sell E10 in NSW and Queensland. The NSW laws are an extension of the legislative mandate that has been in place since 2007, while the Queensland biofuels mandate takes effect for the very first time.

While both laws started at the same time, the laws in each state are quite different and fuel retailers should ensure that they understand the impact of the new laws on their business.

New South Wales

In NSW, the laws are applied on a site by site basis. Fuel retailers selling more than three types of petrol or diesel (i.e. two petrol grades and diesel or more) and selling 900,000L of liquid fuels (i.e. petrol and diesel) in two consecutive quarters, must comply with the new laws unless there are grounds for the site to be exempted.

For retailers with less than 20 sites who were not covered by the previous laws, the requirement to sell biofuels does not commence until 1 April 2017.

All eligible fuel retailers are required to report fuel sales on a quarterly basis, with a requirement for fuel retailers to sell 6% ethanol as a proportion of all petroleum sales (i.e. regular unleaded and premium unleaded).

“In simple terms, this means that the NSW Government is seeking to ensure that 6 out of every 10 petrol customers purchase E10”, said ACAPMA CEO Mark McKenzie.

“We have consistently said that the 6% ethanol target is fanciful and there are real questions about how enforceable the target actually is under common law provisions in Australia”, said Mark.

Nonetheless, eligible fuel retailers are required to demonstrate that they are making all reasonable attempts to meet the target.

Fuel retailers can seek exemptions from the new laws by submitting an application to the NSW Department of Fair Trading. The grounds for securing an exemption are detailed in Exemption Guidelines which can be found on the NSW Fair Trading Website together with details on how to apply for an exemption (see http://www.fairtrading.nsw.gov.au/ftw/Businesses/Specific_industries_and_businesses/Service_stations.page#Who_is_affected_by_the_new_laws).

In addition to the new biofuels laws, the NSW Government has made changes to the fuel price board legislation that now require the price of E10 (as well as diesel and LPG prices) to be listed on the rate board if they are sold.

“Unfortunately, the consultation on the detail of the NSW laws was guillotined late last year and there remains a good deal of uncertainty about some aspects of the new legislation”, said Mark.

“As a result, we believe that there is a significant risk of adverse industry and consumer outcomes and we will be closely monitoring the operation of the NSW laws over the next 12 months”, said Mark.

Queensland

In Queensland, the laws are applied on an ‘enterprise’ or whole of business basis. This means that fuel businesses need not sell E10 at all of their sites but they must demonstrate that they have made all reasonable attempts to sell 3% of ethanol as a proportion of unleaded petrol sales only (the target increases to 4% of unleaded petrol volumes on 1 July 2018).

Fuel retailers with less than 10 sites are automatically exempted from the Biofuels mandate, unless they have individual sites selling more than 500,000 litres of petrol (all grades) in two successive quarters. In this case, the mandate is applied to the enterprise only for the volumes sold at these sites.

All eligible fuel retailers are required to comply from 1 January 2017 – that is, two weeks ago.

As for NSW, businesses can apply for a partial (i.e. selected sites) or wholesale (i.e. entire business) exemption subject to certain conditions and submission of an exemption application to the Queensland Department of Energy and Water Supply (DEWS).

Details of the conditions for exemption and the exemption process can be found on the DEWS website (see https://www.dews.qld.gov.au/electricity/renewables/fuels/mandate).

“Different to NSW, the Queensland Government took the time to work consultatively with all stakeholders to develop legislation that strikes a good balance between the Government’s goal to promote biofuels and the need to protect against adverse business and fuel price outcomes”, said Mark.

At present, the Queensland Government has not introduced any associated requirements with respect to fuel price boards but it is understood that they are currently examining the need to such legislation in the future.

Summary

All fuel retailers in NSW and Queensland should acquaint themselves with the new laws – if they have not already done so – via reference to the above websites.

ACAPMA members requiring further information on the new laws or the exemption process should contact ACAPMA on 1300 160 270 or email communications@acapma.com.au.