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:830] 
Hon DAVID PARKER (Labour) 
: 
 I am promoting an amendment which is about to be tabled to this part of the Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill because I thought a very good suggestion was made by Mr Burns earlier in this debate that this legislation should be renamed the “Bio-fools Bill”. It is absolutely nonsensical legislation and it should be called what it is: it is foolish legislation. 
This legislation causes egregious injustices but the thing that concerns me most of all is that the Minister in the chair the Hon Gerry Brownlee has not read the most pertinent piece of correspondence that has come to his office concerning the effects of this legislation. Recalling that there is no regulatory impact statement and no select committee process it is important that he reads or learns of information about the adverse effects of this legislation on people on jobs on investment and on employers. So I will start reading this letter and I think it is so important that this be on the record that I expect other members of this Committee might want to read the parts of the letter that I do not get to in my contribution. 
This is a letter dated 2 December 2008 from BioDiesel Oils (NZ) Ltd. It is addressed to the energy and communications branch of the Ministry of Economic Development and it states: “Dear”—whoever—“We have received your email of 2 December 2008 in regards to the ‘state of play’ of the New Zealand biofuel industry in the context of a National party pre-election indication of its intention to repeal the biofuel obligation. 
We have considered the implications this will have on our existing operations thoroughly and append our response below. 
1. Biodiesel Oils NZ Ltd (BDO) was until 1998 a major solvent recycling and collector of used cooking oil. It was exporting UCO which was also referred to as tallow. 
In 1999 the company commenced research and development in the manufacture of biodiesel with UCO and later progressed to using animal fats in particular tallow. 
The company continued investing heavily in improving its production and chemical technology for converting tallow as a result of the government’s indication to promote greater use of renewable energy across the economy as part of the National Energy Efficiency and Conservation Strategy (NEECS). 
Around August 2005 when the company became aware that the government had in principle agreed to a Biofuel Sales Obligation it took further steps to invest in ramping up production output of its R&D plant in East Tamaki to 10000000 litres a year. 
When it became evident that the government was going to legislate the compulsory use of biofuel the company went ahead with its plans to construct a new 60000000 litres plant at Waharoa which is well underway. 
The company only uses locally sourced tallow that is now being exported for other purposes as its feedstock. This raw material complies with sustainable standards. With the combined capacities of both plants (East Tamaki and Waharoa) BDO is well positioned to satisfy the biofuels obligation for at least the next two years. 
BDO was very conscious and still is that the biofuel obligation introduced on 1st October 2008 is the single most important driver to sustain biodiesel production demand and consumer use. Without this the business case for BDO would have been extremely weak right from the start and investments decisions in R&D and production facilities would not have won approval from the shareholders and Board of Directors. 
It is therefore pertinent for the government to realise that our investments in biodiesel was primarily in response to legislating the biofuel obligation. 
2. Any change to the biofuel obligation will result in an immediate order to ‘stop work’ on all technological advancements currently being undertaken in our 10000000 litres plan at East Tamaki. 
The production volume will be drastically reduced (already it is at a very negligible level due to the minimal off-take by the oil companies) or ceased since BDO supplies its biodiesel only to Shell and BP. The company will have no second thoughts to mothball its operation at East Tamaki and stop construction of building and site works on its new 60000000 litres plant at Waharoa to avoid any further loss.