THE state government has been forced to turn a blind eye to its own controversial laws promoting ethanol by refusing to fine service stations for failing to sell their mandated quota of E10 fuel.

The main reason is that almost every petrol station in NSW would have to be punished because of limp demand driven by motorists’ reluctance to embrace E10, critics claim.

The ethanol mandate threatens service stations with harsh fines if 60 per cent of their sales are not E10 — despite those sales currently making up only around 24 per cent of all purchases.

Despite the policy’s failure, two Coalition MPs have slammed the government for not repealing the law, claiming that Manildra, the major political donor at the centre of the controversy, now unduly influences some of their colleagues.

The Daily Telegraph last week revealed that not only does Manildra not have to meet any greenhouse gas emissions reduction target, despite the claim ethanol is better for the environment, but that NSW Fair Trading went out of its way to protect the company’s reputation.

A December 2011 report written for Manildra showed auditors never bothered to check the environmental outcomes because the company is not required to meet the international criteria about ethanol fuels having a “lower life cycle greenhouse gas emissions relative to the fossil fuel baselines”.

Manildra has donated more than $1 million to the Coalition in the past five years alone and was a major Labor donor when the Rees government introduced the original ethanol mandate.

Fair Trading confirmed that “no penalty notices have been issued for noncompliance … during the first two quarters of 2017”, when the new penalty regime started.

Liberal MP Peter Phelps, who last year quit as government whip over the so-called ethanol mandate, said he was pleased that no service station had been fined.

“This law is ridiculous, impossible to fulfil, and should be repealed, but it won’t be repealed because of the political interests and influence they have over the government,” Dr Phelps said.

“I am not surprised the law is unworkable and no service station will ever hit the (sales) figure.”

Another senior Liberal, who did not want to be named, said Manildra had “bought off” a number of Liberal MPs and the law would stay “no matter how useless it is”. “These exemptions are being given out like Christmas presents to whomever requests one,” they said.

The Australian Competition and Consumer Commission says a dislike for E10 is pushing motorists to buy premium fuels at more than twice the rate in Sydney compared to other cities — and that’s costing us $85 million a year extra.

A Manildra spokeswoman said “while significant monetary penalties are available to the NSW government for noncompliance” the government was not doing so “in favour of the leniency afforded to major oil companies”.

A spokeswoman for Better Regulation Minister Matt Kean said the focus “has been on increasing the community’s and industry’s awareness of the new regime”.

Extracted from: Herald Sun