Brownlee Gerry: Biofuel Bill — First Reading 
Brownlee Gerry: Biofuel Bill — First Reading 
[Volume:642;Page:12406] 
GERRY BROWNLEE (National—Ilam) 
: 
 The National Party will be supporting the Biofuel Bill going to a select committee because we think there are some aspects that while very laudable do need a degree of scrutiny. I want to point to a couple of things that the Minister David Parker said in his speech. The first of those points revolves round the consultation that has taken place with the five large importers of oil products into New Zealand. It is our understanding that when the biofuels obligation was first talked of in 2002 some relatively small targets were set but between 2002 and 2005 and then the New Zealand Energy Strategy released yesterday those obligations appear to have increased quite considerably. 
One of the questions that immediately comes to mind is whether the oil companies have the capacity to meet their obligations. That of course is also caught up in the proviso that any biofuel that is imported into New Zealand then blended into product here—or in fact imported as blended into product—has to be able to carry certification that it has been sustainably produced. There is no doubt that the world will have a considerable amount of biofuel available in the foreseeable future. The United States for example has established a very very ambitious target of 20 percent of all motor fuel being biofuel by the year 2017. That is not because it wants to see biofuels replace other carbon-emitting fuels but rather because it is concerned about security of supply. That is fair enough; that is its issue. But we hear of programmes in the United States where there are federal and some state tax incentives in order for biofuels to be produced in the first place then blended with either diesel or petrol. What would concern us is that the actual source of the biofuel may not be all that clear. So part of the select committee’s work should be I think to work out what sort of regime will exist around that certification process. 
Although the Minister has been quite open—and I think quite appropriately so—in saying that the date for the implementation might go out by 6 months or so and we would support that what is important is that any of the oil companies that decide that they have to defer for a period of time are not unduly penalised because the deferral is a result of their inability to source sustainably produced biofuel. The evidence coming at a rate of knots out of various countries around the world is that much of the biofuel being produced en masse at the moment is barely carbon neutral and is in most cases carbon positive. So I think a problem may be faced there. I am sure that the select committee will be able to work with those oil companies to work out a reasonable regime. My point about the deferral though is that simply saying a company can defer for 12 months but then it will have the added obligation of an increased amount of biofuel inside its mix may in fact not be easily achieved. I urge that there be some sort of flexibility in this—particularly if a strong biofuels industry is to be developed in New Zealand. 
The Minister and other members of Parliament will be aware that there is a company currently looking at some very substantial investments in the conversion of locally sourced tallow into biofuel. We would hope that that operation gets off the ground and that its production of biofuel is as carbon neutral or as low in its carbon emitting as is claimed. It is interesting to note that another company that was set up in New Zealand was looking at growing substantial acreages of maize for the purpose of producing biofuel in a plant that was to be fuelled I understand by a wood-fired source. That was a very very difficult proposition in that event. It would have been pretty much closed cycle in terms of carbon dioxide emissions but it has unfortunately fallen over. The question I would have—and I hope that company comes to the select committee to discuss the issue—is why that particular proposal has fallen over. Surely it cannot be because of the price of biofuel because that will always be set internationally. 
One of the interesting things about the biofuel initiative is that there will be a cost for consumers. The estimate is that a litre of biofuel will be between 4c and 6c dearer than a litre of standard fossil fuel. The question that arises for us is whether that will be shared across the whole of the consumption of combustion fuel inside New Zealand or whether it will be borne individually by motorists who make that choice. I see the Minister is nodding and saying it will be borne across the whole portfolio. I think that is something we will want to hear more firmly during the select committee process. 
Another aspect of the biofuel sales target is whether the target can be met by perhaps completely ignoring the vehicle fleet in New Zealand and by simply supplying a greater percentage of biofuel to the stationary engine sector and therefore meeting the obligation across the entire consumption of motor fuels at the present time without the need for blending. I know that the concern that oil companies have is that when a fuel mix changes people inevitably experience things going wrong with their vehicles that are—in their eyes anyway—directly a result of that changed fuel. We have seen it before with the taking of lead out of petrol and with the reductions of sulphur in diesel and we will no doubt see it when it comes to biofuel as well. I can understand the oil companies’ concern about that. So I think there is also a need for a strong education programme around the sorts of cars that can take this particular fuel. I understand that any car produced after the year 2000 can quite adequately take fuel blends of up to 5 percent and possibly even up to 10 percent while cars produced before that time may not take them so easily. Given that the average age of a vehicle in New Zealand is now some 11 years it means that the vast majority of our fleet will be able to run perfectly adequately on biofuels from the day of their introduction. 
It was interesting to hear the Minister say that the excise that is levied on petrol diesel and other motor fuels at the moment will not be levied on biofuel or the biofuel component. Nonetheless we have an increase in the amount of funds that are currently collected for measuring the quality of our motor fuels. At the moment I understand it is 0.025c per litre—a very very low figure which I think produces only $15 million a year or some such. The interesting point will be how much it increases and what the actual value to New Zealanders of that particular increase will be. If it is desirable that more New Zealanders embrace the concept of biofuel readily want to put the stuff in their tanks and even ask for a higher level of blending in their fuels we may want to mitigate the bureaucratic costs that go alongside of that. 
The penalties regime is one that I think the Minister might want to have another think about. That is simply because it appears to me that the five companies importing oil into New Zealand have a willingness to try to make this work. They have concerns—and we have outlined some of those concerns—and we want to work through the select committee process to try to mitigate those concerns. But putting a pernicious regime in place exposes us—and by that I mean the country—to the risk that some of those biofuels that are eventually introduced are not as clean as they might be. 
Can I conclude by saying that National thinks the population of New Zealand will probably quite willingly embrace the concept of biofuels. I think very few people in this country do not know that trying to clean up the exhaust emissions from vehicles will be useful. I do not think frankly that too many people understand the importance of reducing carbon dioxide emissions—largely because they do not see them—and it is hard to say that they experience the effects of them. One can guarantee the moment one tries to explain those effects some sort of counter-activity will occur in the atmosphere that gets people away from the original point. 
Overall our view is that we will support this bill going to a select committee. We have a number of questions about the implementation of the legislation. I will reiterate what those questions are. Essentially they are about the certification of the manufacturing process for biofuels to ensure that it is not a carbon-emitting process and therefore of very little value to New Zealand’s efforts; and secondly making sure that the biofuels obligation can be met from those clean sources without those companies experiencing unnecessary penalties which we know are ultimately passed on. 
I understand that the bell is not working this evening. Oh I have another 2 minutes. In that case can I simply say to the Minister that we hope the select committee process does not see the usual performance at select committees where the officials treat the Opposition members as though they are a completely adversarial party in these circumstances and we hope that the Minister recognises that we support this bill—with considerable goodwill—going to a select committee recognising the importance of all of this for New Zealand’s future. It has to be said that as an agricultural producing country with a huge emission problem from our agricultural sector and not wanting to penalise ourselves unduly in the future getting this part of the emissions profile in better shape is in all of our interests. So we hope we have that assurance from the Minister. With that comment I simply say that we will participate in the select committee process very honestly and very willingly but with considerable and diligent scrutiny.