Brownlee Gerry: Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill — Second Reading In Committee Third Reading 
Brownlee Gerry: Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill — Second Reading In Committee Third Reading 
[Volume:651;Page:841] 
Hon GERRY BROWNLEE (Minister of Energy and Resources) 
: 
 I move  
That the Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill be now read a third time 
. Hearing this debate one would think that this bill was about shutting down the biofuels industry in New Zealand. That has to be the most hysterical reaction to this particular bill that I could possibly imagine. I am staggered at the claim that the 20000 litres of biofuel produced in New Zealand right now will not apparently be produced the moment that this bill passes its third reading. I do not believe that. I think that in fact the biofuels industry in New Zealand has a very bright future indeed. What I my party and others who support this bill do not accept is that the only way New Zealanders will embrace biofuels is if the Government insists they become the compulsory customers of certain companies inside New Zealand. That is not a reasonable way to progress a move that is designed to improve New Zealand’s carbon footprint. 
In the Committee stage the Opposition kept on talking about the prospect of biofuels reducing our dependence on foreign oil. Well there is a prospect that that might happen but let us be very clear: to meet even the one-half percentage obligation would require some 60 million litres of bio-diesel. To get up to the full extent of the obligation in 4 years’ time would take over 300 million litres of bio-diesel. At the moment this country produces 20 million litres so it would be decades—decades—before we reached the position that would see us through biofuel non-dependent on foreign oil. Of course oil discovery in New Zealand may advance that position much more quickly. 
What we need is a programme in this country that encourages the development of biofuels and that ensures that the development of that industry is met by a market willing to take that fuel and I am confident we can have that situation in New Zealand. Interestingly we have it now but I think we could expand it quite considerably. 
The Opposition has also said that we are doing away with the option of producing standards for the sustainable production of biofuels. That is simply a total red herring. In fact the principal Act the Energy (Fuels Levies and References) Act 1989 requires that those sustainable standards are put in place. 
Hon David Parker 
: No it does not. 
Hon GERRY BROWNLEE 
: Mr Parker I am reliably informed is a guy who has always had his own view on these things. 
It also means that the work now being done by New Zealand Government officials to develop those standards will continue and those standards will be promulgated as soon as they are available. That has got to be a good thing because it will mean that New Zealanders can be sure that when they are pouring this new fuel into their tanks they are doing something to reduce the nation’s carbon footprint. 
There is a huge amount of international condemnation of biofuel produced in other parts of the world. As I said before we would need 60 million litres in the current year to meet the obligation put on the oil companies. We cannot do it from inside this country. 
Hon David Parker 
: Read the letter. 
Hon GERRY BROWNLEE 
: There are those who say we can do it; well where is the production now? It is no good saying that if the provision goes ahead we can do it because the obligation is there right now. It has been there from 1 October 2008. 
Moana Mackey 
: It’s 0.5 percent this year 1 percent next year. And this guy is doing it and you’re putting him out of business. 
Hon GERRY BROWNLEE 
: The member has made a lot of fun and games about the letter sent by the gentleman who has the plant in Tamaki and is proposing to build more plant. I have read that letter. He has put his case very succinctly but from his perspective. I have made the offer through Sue Wood to talk to him. It has been rejected. I cannot do much more than that. I cannot be fairer than that. The fact is that the biofuel obligation cannot be met in New Zealand without the importation of biofuels. I know that under the current law the opportunity for the big oil companies to have their obligation pushed out exists and that request would have come over my desk in no time at all. 
Also it is a little bit staggering that those in the industry who say that it is being destroyed and that they could have produced enough biofuel inside New Zealand actually did not have watertight non-breakable contracts with the oil companies. If they could not get that sorted out in the period that the obligation has been in place then what was the chance it might have been sorted out any time soon? 
I have said that I think biofuels do have a big future. I quite like the idea that a cleaner fuel would be available for many of the activities in New Zealand that require the burning of diesel. I point to Solid Energy’s approach. It has an experiment involving a fishing fleet in Wellington. That fishing fleet is 100 percent fuelled by bio-diesel and that is a great use of that fuel. Those on the boats like it. The fuel has proved to be very very reliable. If something goes wrong if the tank leaks or the boat spills some of the fuel then because it is biofuel it simply becomes fish food and does not do any environmental damage. That is a great use of it. Those sorts of things will develop. 
I note also that the company that Mr Leay heads up has had a product tested by Boeing. It announced that in the market just recently. The fuel is an algal-based biofuel. Quite interestingly a barrel of that particular biofuel has about a 33 percent jet-fuel capacity. That is fantastic and I am sure that technology will develop as time goes on. 
One can go through all of the biofuel companies look at what they are doing and see a clear picture of how they might progress their industry. But their coming to the Government and saying that they can make the progress they want to make only if Parliament chooses to give them customers by compulsion is not a particularly good way to go about it. 
Then there is the issue that has been advanced by our opponents that if this bill passes the country will be flooded by unsustainably produced biofuels. Well hang on let us work that out. They are saying that without this bill there will be no biofuel industry which would tend to mean there are no users but they say that somehow the country will be flooded with imported biofuel. I do not accept that for one moment. Some of the arguments mounted on the other side of the House have been to say the least very very inconsistent. 
What we will do is ensure that there is a sustainable standard for the import of biofuels to be used in the production of biofuels in New Zealand. And I will say this: when this bill passes later this afternoon the 20 million litres a year of biofuel produced in this country right now will still have markets and will still be sold and there will be more people looking for more of it as time goes by. We most certainly encourage that.