Mackey Moana: Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill — Second Reading In Committee Third Reading 
Mackey Moana: Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill — Second Reading In Committee Third Reading 
[Volume:651;Page:818] 
MOANA MACKEY (Labour) 
: 
 I am happy to take another call on this part in support of the amendments proposed by my colleague the Hon David Parker. I urge the Minister to take a call and tell us his thoughts on these amendments. We are trying very hard to work with the Government to come up with a compromise. We appreciate that this is a policy that the National Party campaigned on during the election campaign and that that is why this bill is now before the House. We are trying to be constructive and bring forward amendments that minimise the damage this bill will reap not only on the biofuel sector but also on jobs. I urge the Minister to take a call. 
I reiterate that schedule 5 is important. The select committee did a lot of work on that year-by-year mandatory obligation. If I remember correctly the original bill had a top point of 3.4 percent of total fuel sales by energy. Again I reiterate that that is hardly an incredibly high difficult-to-reach mandatory target. A target of 3.4 percent is not exactly going to break the back of those who work in this area. The legislation was about getting a domestic industry in place and supporting the development of that industry whilst at the same time doing important work to bring down greenhouse gas emissions in our transport sector which is one of our largest areas of greenhouse gas emissions after agriculture. 
The amendments the Hon David Parker has proposed will help an industry that has been starting up while being assisted by the mandatory biofuels obligation introduced by the previous Government. It gave the industry certainty and allowed it to know what the obligations were going to be and what kinds of sustainability standards were eventually to be put in place. It also allowed the industry to make long-term investment decisions. 
 I reiterate once again how important this Committee stage of the whole House is. This bill has been rammed through with no select committee process and no opportunity for those who will be disadvantaged by this legislation to come and put their case. There is no opportunity for the National Government members who disagree with them to challenge them in public to their face rather than in this Committee where they have no right of reply and no right to correct some of the misinformation that has been spread about their position. 
When the select committee members originally looked at schedule 5 and at how the mandatory biofuel obligation was going to be implemented they saw there was a steep incline in that graph after the first few years. That was because we were expecting a large ethanol plant to come online. We had been told how much ethanol it was going to be able to produce to feed into the local domestic market and we made those obligation points accordingly along that line. During the course of the select committee process—and again this shows just how important these select committee processes are in responding to the reality of what is out there which might be quite different from the reality of the time at which the bill was drafted—it became clear that perhaps that information in schedule 5 did not take into account the reality which was that this large ethanol plant we had been expecting to come online was not now going to happen. 
If that points to anything it points to the need for certainty in that sector. One of the reasons given for the plant not coming online was that the company had not been given certainty early enough that it was actually going to be able to produce this product. As well as I pointed out before the subsidy in the United States market had led to a lot of uncertainty here at home with the “splash and dash” ethanol that was being produced out of the United States. It really did distort the market and make it more difficult for ethanol producers here at home. 
The select committee listened throughout that process and we changed the schedule. We reduced the top target from 3.4 percent to 2.5 percent. We asked officials to go away and do some work on what biofuel was already available in New Zealand and what was due to come online. They came back and told us that a 2.5 percent mandatory obligation required I think 5.5 petajoules of biofuel—the original 3.4 percent would have required 8 petajoules—and that already in New Zealand we had the capacity for 4 petajoules of tallow bio-diesel I think 2 petajoules of rape seed and other bio-diesel and I think 0.3 petajoules of ethanol. I do not know whether I have those figures exactly right but they are from memory at a select committee. 
During this process we were told at the select committee that people were making those investments because this bill was before the House and because they knew the mandatory obligation was coming on. We were told by one of the oil companies—which already had infrastructure for dealing with ethanol because the company sold it—that it was looking at bringing in the obligation earlier because that was a market advantage and as the company was going to have to do it anyway why not get the jump on the rest of them.