Parker David: Third Readings — 
Text is incorporated into the Bound Volume 
Parker David: Third Readings — 
[Sitting date: 02 September 2008. Volume:649;Page:18300. Text is incorporated into the Bound Volume.] 
Hon DAVID PARKER (Minister of Energy) 
: 
 I move  
That the Energy (Fuels Levies and References) Amendment Bill the Customs and Excise Amendment Bill (No 5) the Tariff Amendment Bill (No 2) and the Local Government Act 1974 Amendment Bill (No 2) be now read a third time.  
These bills were previously parts of the Biofuel Bill. 
The legislation introduces a biofuel sales obligation and makes other legislative changes to provide for biofuels in the New Zealand fuel market. Record oil prices have compounded the environmental imperative to facilitate alternative transport fuels. The challenge of responding to climate change means that those fuels must be sustainable. Oil companies will be obliged to sell biofuels as a proportion of their overall fuel sales starting at a rate of 0.5 percent by calorific value this year and rising to 2.5 percent by 2012. Decisions on what type of biofuel to supply whether bio-ethanol or diesel how much is blended with fossil fuels and where industries purchase it—from New Zealand or overseas—will be left to the industries so as to provide the most cost-effective and appropriate options to consumers. 
Of course we know that not all biofuels are created equal and the sustainability of biofuels has come under increasing scrutiny. However just because some biofuels are not good does not mean to say that all are bad and the positive of many biofuels is not in doubt. Biofuels in this category already produced in New Zealand include bio-diesel from tallow and waste cooking oil as well as some amounts of ethanol from whey. This legislation will provide sustainability requirements and will ensure that biofuels qualifying for the obligation will reduce greenhouse gas emissions relative to fossil fuels and avoid negative impacts on food production and biodiversity. 
I say one other thing in respect of the frequently misrepresented assertions as to cost. We are advised that the cost of the additional infrastructure that oil companies need in order to blend and deliver these biofuels is between 0.2c to 0.4c per litre of fuel delivered assuming that the cost is recovered over a 4-year period. The overall cost to consumers including that infrastructure cost and the fuel cost of course will depend upon the future price of oil the future cost of biofuels and the exchange rate. The range of estimates provided to the select committee suggested a price impact between an extra cost of 1.3c per litre on average at one end of the range and at the other end of the range a saving to consumers of 4c per litre.  
It is clear that New Zealand does need to make a transition towards cleaner fuels and towards renewable fuels for both environmental and cost reasons. We have to start. Further delay is the National Party’s suggestion but it would be the wrong course to take. I thank the other parties in this Parliament for their indications of support for the legislation. I commend the Energy (Fuels Levies and References) Amendment Bill the Customs and Excise Amendment Bill (No 5) the Tariff Amendment Bill (No 2) and the Local Government Act 1974 Amendment Bill (No 2) to the House.