Parker David: Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill — Second Reading In Committee Third Reading 
Parker David: Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill — Second Reading In Committee Third Reading 
[Volume:651;Page:798] 
Hon DAVID PARKER (Labour) 
: 
 This is the most important and worst part of the Energy (Fuels Levies and References) Biofuel Obligations Repeal Bill. It repeals the biofuels mandatory obligation an obligation that was put in place to cause oil companies to start with modest levels of biofuels being blended into the fuel they sell—0.5 percent of the fuel by calorific value had to be biofuel this year rising to 2.5 percent by 2012. These were not large quantities but enough to cause the oil industry to develop the blending infrastructure and to take product from those who were willing sellers of the product in order that we start to bring forward biofuels to reduce our greenhouse gas emissions. 
It has a number of other benefits including slowly weaning us off our oil dependency. New Zealand’s biggest import cost is oil products. We spend literally billions of dollars every year on oil imports and this was a start towards substitution of some of that oil product primarily for environmental reasons but with economic benefits. 
The Minister in the chair the Hon Gerry Brownlee has been on national radio and in all of the media claiming that his justification for doing this was sustainability issues. He claimed he was repealing the biofuels legislation because he had concerns about the importation of unsustainably sourced biofuels. It is somewhat ironic that in doing that his legislation is so ham-fisted so ill-considered that he strips out of the law the only protection in law—in any law—against the importation of unsustainably produced biofuels. 
There was a view a couple of years ago—a view that I never held—that all biofuels were good. It was arrant nonsense. There are some biofuels that are bad. Some cause the cutting down of rainforests the loss of habitats for endangered species degradation of water and loss of whole ecosystems. We do not want those biofuels. The legislation we currently have in New Zealand creates standards that prevent that outcome. Other biofuels— 
Jacqui Dean 
: But no sustainability standards. That’s the problem. 
Hon DAVID PARKER 
: The legislation includes three sustainability principles that are detailed to a greater degree of specificity than is normally found in primary legislation. And I have to thank the Hon Nick Smith for his involvement in this in the select committee; he made a credible contribution to some of the drafting of that. He seems to be involved in the killing of the whole thing now but he actually made a credible effort in the select committee and I thank him for that. Metiria Turei from the Greens made a fundamental contribution to it and Moana Mackey from Labour was also influential. 
As a consequence we had three sustainability principles in the legislation. The first was the protection against loss of biodiversity because of the logging of rainforests and that sort of thing. The second was the competition with food production. We do not want to put up the cost of food because of producing a petrol or diesel alternative that competes with food production. So that principle is enshrined in there as well. The third was that there had to be a substantial reduction in greenhouse gas emissions. The minimum reduction was 35 percent from memory. 
Metiria Turei 
: It was. 
Hon DAVID PARKER 
: I thank the member for confirming that. Those principles can be articulated only in regulation. The whole detail cannot be put in the Act. So the principles were set out in detail but the fine detail that sits behind it is in regulation. That regulation was to be promulgated by the middle of next year and would have been. I know that that was achievable because I was the relevant Minister at the time and officials assured me that it could be done. It was a lot of work to do in that time but it could have been done. 
In the meantime all sellers of biofuels—that is the major oil companies meeting their mandatory obligation—had to report their source of biofuels. They were not going to put at risk their brand with accusations that they were going to be selling biofuels produced by knocking over rainforests in Indonesia. Of course they were not going to do that. More important though the myth about sustainability is exposed by the fact that those sustainability criteria that sit in the Act and will still be needed even if one does not have a mandatory biofuel sales obligation get ditched from the legislation by this one clause in this part of the bill which takes out all the relevant sections that impose sustainability criteria. So rather than making the problem better if Mr Brownlee and his Government were really concerned about sustainability issues it makes it worse. According to what we have heard from some of the interjections from Jacqui Dean they need more sustainability provisions. By repealing the provisions they do not have more; they are taking them out and leaving it worse not making it better. 
I have amendments that I will be proposing during the Committee stage because that can be fixed. One can remove the mandatory sales obligation and still keep protections against the importation of unsustainable sources of biofuels but this bill does not do it currently so I am proposing amendments which I hope the Committee will support that do achieve that. I would encourage ACT to read those because I am really trying to convince the Committee that that particular amendment does not run against the provision that repeals the mandatory obligation but it does keep the sustainability criteria for imports of biofuels. 
The second issue that Mr Brownlee says he was worried about during the election was that there was an “un-level playing field” I think was the phrase used—one of those hackneyed phrases now—to say that somehow because there was a tax break for ethanol and no tax break for bio-diesel it was wrong. Well the advice was that we needed both bio-diesel and ethanol and that was the view of the then Government—we wanted a bit of ethanol so that oil companies started updating petrol infrastructure and bio-diesel so that they update diesel infrastructure; we needed a bit of both. In order to bring ethanol on we actually needed to have that subsidy but we did not need the subsidy for bio-diesel because the mandatory obligation would be enough. So why have a subsidy when one does not need it? It seems nonsense that we are now going to talk about a subsidy for bio-diesel. But be that as it may— 
Hon Gerry Brownlee 
: No we’re not. 
Hon DAVID PARKER 
: The Government is now not going to give a subsidy for bio-diesel? 
Hon Gerry Brownlee 
: No tax equalisation. 
Hon DAVID PARKER 
: Tax equalisation is what? A subsidy for bio-diesel the same tax break that ethanol currently gets; is that effectively what the Minister wants? 
Hon Gerry Brownlee 
: That’s what is likely to be— 
Hon DAVID PARKER 
: Well this legislation does not do it. So the Government wants to protect the biofuels industry by giving it that same tax treatment that ethanol gets but the bill does not do it. Now I am promoting another Supplementary Order Paper that goes some way to doing that because I am really worried for those people who have lost their life fortune in appropriate investments in what is the world’s most sustainable source of biofuel which is tallow. I am worried for the workers who are going to lose their jobs— 
Hon Tau Henare 
: Oh whatever! 
Hon DAVID PARKER 
: Tau Henare does not care about unemployment. This will be a continuing theme from this Opposition because the Government is already causing rising unemployment not just in the biofuels industry but also in forests. 
Hon Tau Henare 
: Rubbish. 
Hon DAVID PARKER 
: I have a letter that I am going to table from the former president of the National Party complaining about the injustice that the Government is causing to Mr McNicholl who is losing his life fortune—more than 46 full-time jobs will be lost from one employer alone to say nothing of the rest and Tau Henare and the rest of the National Party say “whatever”. That is absolutely outrageous. 
 Not only is this bill environmental vandalism but it is economic lunacy and it is doing an injustice. If the Government wanted to do away with the mandatory obligation and replace it with other policy it could do so but it should do it through a select committee. It should not ride roughshod over the rights of people and do this under urgency. It should bring forward the whole of its new policy not just the dirty little bit that cuts off the mandatory obligation and kills business. It should say what it will do in its place to support biofuels. But the Government is not doing that. This bill is part of an outrageous array of policy that is to the detriment of the environment to the detriment of our economy and to the detriment of our reputation of being a good people. That reputation is something that is valuable to me. I do not do these things just for money; money is important and I am not saying we should do silly things in a money sense. This bill certainly is not just about money but the ethics of it should be brought to head too. 
I seek leave to table a letter from the former president of the National Party Sue Wood. 
The CHAIRPERSON (Hon Rick Barker) 
: Leave is sought to table the letter. Is there any objection to that course of action being followed? There is none. Leave is granted. 
Document by leave laid on the Table of the House.