Mackey Moana: Sustainable Biofuel Bill — Second Reading 
Text is incorporated into the Bound Volume 
Mackey Moana: Sustainable Biofuel Bill — Second Reading 
[Sitting date: 04 April 2012. Volume:679;Page:1678. Text is incorporated into the Bound Volume.] 
MOANA MACKEY (Labour) 
: 
 What an extraordinarily bad speech from a member who claims to be environmentally friendly. What an extraordinary rewriting of history. I do not know whether Nicky Wagner actually believes what she just said or whether she just decided to leave out quite a few key facts. And what an extraordinary contradiction in terms from a member who started off by saying that she did not support Labour’s Biofuel Bill because it did not have any sustainable standards in it and that Jan Wright criticised the bill because of that. She left out the fact that of course that piece of work from Jan Wright was done before Labour made amendments to the bill to put sustainable standards in it. It was Labour’s bill that was amended to do that alongside Jeanette Fitzsimons and Metiria Turei who were on the Local Government and Environment Committee which I chaired. But now she is saying: “Well actually we do not need any sustainable standards in the legislation because there are no biofuels in New Zealand.”  
We on this side of the House actually think that it is a problem that the National Government has killed biofuel production in this country. We do not think it is good enough to say that we do not need environmental standards because they are so little and they will just self-regulate. When we see what happened with Cadbury’s and the use of palm oil it was actually public protest that forced it to back down. It should not have to come to public protest to get good legislation in place to protect the environment and to support an industry that is going to be very important for the future of New Zealand especially in terms of security of supply.  
Labour will very proudly be supporting this piece of legislation the Sustainable Biofuel Bill which the National Government is going to vote down today. I want to take the member who has just resumed her seat back to what actually happened at the time. Labour put in place a biofuels obligation. For a long time the industry had been saying it was going to do it and it did not happen. What we said was that over time from 2008 to 2012 we would move from 0.5 percent of petrol and diesel sold on an energy equivalent basis up to 2.5 percent in 2012 and the industry would have to make sure that by 2012 2.5 percent of the fuel it was selling was biofuel. We did this in a way that was very flexible. The industry could choose to do it through the petrol pumps as Gull did and as Mobil then acted to do or it could sell product directly to customers—for example 100 percent bio-diesel—and meet its obligations that way. That was up to the industry.  
It did two very important things. Firstly it provided some certainty for the fledgling biofuel industry in New Zealand that there was going to be a market for its products. Based on that the biofuel industry was able to invest in its companies because it knew the market would be there. That was a certainty that it had not had before. And do you know what was so great about it? It cost the Government nothing. No expensive subsidies—nothing. It was merely an obligation that provided certainty to a sector that needed that certainty and the biofuels sector welcomed it.  
 When we chose what that level of obligation was going to be we were very cognisant of the amount of biofuel that was currently available in New Zealand. We did not want to force the oil companies to have to go offshore and bring in unsustainable biofuels. We knew that there was more than enough biofuel already in production in New Zealand and we planned for production once the industry had that certainty to meet that 2.5 percent obligation. It could do it from sustainable sources in New Zealand.  
The bill went to the Local Government and Environment Committee and the Green Party quite rightly raised that we should do some work on sustainability standards for the legislation. I was chairing the Local Government and Environment Committee at that time and I can tell you that we worked incredibly hard both in the committee and outside the committee with the Minister of Energy and Resources at the time David Parker to come up with some sustainability standards that could go into the core legislation. The guts of it would be done in regulation but what the submitters told us was that there was enough of a steer in primary legislation to make it clear what was going to be acceptable and what was not going to be acceptable once those regulations were put in place. The principles of those sustainability standards were around the fact that they actually had to produce less greenhouse gas than fossil fuel. There is no point saying: “You can have a biofuel and that’s great because it’s a biofuel.” when in fact it emits more greenhouse gas emissions than petrol does so we put in some clear sustainability standards around that. The second point was that we did not want it to compete with food production. We did not want when food should have been going towards feeding people those farmers suddenly realising they could make more money out of biofuels because of the massive subsidies in some countries overseas. So we made it clear in terms of downstream effects as well that we did not want to see food production impacted by this. The third one was around biodiversity and ensuring that we were not using biofuels that have actually contributed to a decrease in biodiversity around the world.  
Do not underestimate how much work went into getting those standards to a point where the Green Party was comfortable with them the Labour Party was comfortable with them and the select committee was comfortable with them. A lot of work went into that legislation. I think it was actually very very good legislation and I really want to commend the officials who worked on that piece of legislation because they were absolutely fantastic. They were enthusiastic about drafting these sustainability standards. They said to us: “This is doable. We can have the regulations for these in place by the middle of 2009. That is not a problem. You’ve given us enough of a steer that we know it can be done.” We knew then that all the biofuels that would be used in New Zealand would meet those sustainability standards. As I said before there is more than enough feedstock in New Zealand to meet that obligation—be it ethanol as a waste product of the dairy industry or tallow again from the agricultural industry—more than enough that was going on in New Zealand.  
One of the oil companies Mobil Oil actually moved before the legislation came into place because it saw that the writing was on the wall. It saw that there was a competitive advantage for it to get in there early and be able to say: “You know what? We got in there and we’re grabbing this with both hands. We’re not going to complain about it.” Mobil Oil started introducing ethanol into its petrol blends at its service stations. Some of the other oil companies as I said before indicated that they would probably just sell direct product to bulk customers in order to meet their obligation that way. And it cost the taxpayers of New Zealand nothing—nothing. It was a simple way of getting some kind of scale in an industry that was fledgling that was struggling to get on its feet and that was very very important to the future of New Zealand.  
Then we had a change of Government and what happened was that one of the very first pieces of legislation it repealed was the Biofuel Bill. What did National replace it with? At a time when there was no money when it was slashing and burning and crying about how poor we were it put in place a $36 million subsidy fund. So in place of what Labour was doing which was free to the taxpayers of New Zealand National put in a $36 million subsidy fund which has been an absolute and utter failure—a total failure. It is not what the sector wanted. There has been no certainty for the sector. Because it is a year-by-year appropriation the sector is not actually able to plan because it does not know how much it is going to get. And lo and behold here we are with Minister Phil Heatley saying that the subsidy scheme is going. Basically it is going because of low uptake. Well the low uptake has been because it was a shambles from start to finish. It was not what the industry wanted. It is extraordinary that something was happening for free then National wanted to put in subsidies in order to make it happen and it did not work. So National repealed the legislation and what was its reason for repealing that bill? Because there are not sustainability standard regulations yet. Well there are not any at all now and by the way there is also very little biofuel being produced in New Zealand because of this Government’s complete inability to come up with any kind of coherent plan to ensure that the sector has the certainty that it needs to invest.  
When Gerry Brownlee repealed that piece of legislation a $10 million biofuel plant was mothballed on the basis of that decision because it had thought the Government was going to provide it with that certainty. The plant had made investment decisions based on that and Gerry Brownlee and National pulled the rug out from underneath it. That $10 million plant was mothballed that gentleman lost money and now we find ourselves in a situation where finally National has just admitted that it is not going to do anything about biofuels and that the subsidy scheme is going. For what there is the National Party does not really care whether it is sustainable or not so why do we need sustainability standards? But to stand up and try to argue that you are getting rid of a piece of legislation on environmental grounds is just so galling that it beggars belief—so galling that it beggars belief.  
This is a good piece of legislation. When we have a Labour Government at the next election we will be acting on biofuels. We want them to be sustainable. We will be putting in place policy that actually supports the industry and does not undermine it and pay lip-service to it. I look forward to seeing this piece of legislation once again when we have a Labour Government which takes its environmental commitments seriously and which takes its energy and security of supply commitments seriously. We will see these sustainable biofuel principles back.  
It is a shame the bill is going to be voted down today but can I please just implore National members: do not stand up and try to tell us that it is on environmental grounds that you are opposing this piece of legislation because frankly it is painful to listen to. It is just embarrassing from members who claim to have environmental credibility who claim to be Bluegreens. Please just be honest. This is actually about the fact that National does not think that the biofuel industry has any future in New Zealand and therefore is not prepared to support it.