Brownlee Gerry: Sustainable Biofuel Bill — First Reading 
Brownlee Gerry: Sustainable Biofuel Bill — First Reading 
[Volume:656;Page:5262] 
Hon GERRY BROWNLEE (Minister of Energy and Resources) 
: 
 The Government will support the Sustainable Biofuel Bill today. Work is going on in Government departments at the moment on what might be a voluntary scheme to establish proof that biofuels have been sustainably produced in New Zealand. It would then be a short step to look at how that may be prescribed in a regulation. I accept the call from the industry itself to protect what is effectively a domestic industry—and I do not like using that word too freely—to ensure that its integrity as a producer of sustainable biofuel is upheld. 
 I think it is worth noting that New Zealand consumes about 183000 barrels of oil or fossil fuel every day. On a quick calculation that means we are using about 280 million - odd litres of fossil fuel every day. This Sustainable Biofuel Bill becomes important in a very very small sector of what might be fuel replacement for the future because the programme that the Government introduced last year will see a subsidy becoming available for up to 60000 litres a year by the time it reaches its final year of appropriation and then the Government will need to make a decision about what happens from there. 
My point is that 60000 litres over a year compared with 280 million - odd litres being used a day means that this is very much a fledgling industry. In many ways it also encapsulates some of the points made by Jeanette Fitzsimons—that is the amount of space that would be required to produce the sort of feedstock that we might get from vegetative material is to say the least enormous. 
Why then encourage the industry? Second-generation biofuels present quite a different picture and it will be a while before the world is at the point where those are easily produced. But I am very encouraged and impressed by what is happening with algae in the Nelson area of New Zealand and a lot of work is being done internationally to look at what might be done with wood waste from forestry activities around the world as well. 
The other point I would make is that the fuel we currently use was at one point considered to be a bit of a waste product. For hundreds and hundreds of years no one really knew what to do with oil. It was something that one might burn to get a bit of heat out of it but just 200 years ago the massive amount of use that we have for it at the moment was quite unheard of and perhaps even unthought of. So we think that encouraging a biofuels industry in New Zealand at this point as part of what will happen internationally is worthwhile. 
The standards that the bill puts up are pretty much the same requirements that were in the mandatory obligation bill that the Government repealed late last year. Our reason for repealing it at the time was that there were no sustainable standards in place. The idea was that they would be promulgated at around this time—in 2009 in the middle of the year—and at that point we could have consumed literally thousands of litres of biofuel that may well have come from unsustainable sources. Our other concern was that the cost of that to the economy would have been somewhere between 2c and 6c a litre and it was not a cost that we were prepared to put upon motorists when there could be no certainty that the cost would do anything at all to improve the greenhouse gas emission levels from this country let alone from any other country particularly the countries where the biofuel might have come from. The three points that this bill wishes to insert into the consideration of our standards for biofuels will see New Zealand producers able to put a stamp on their product that guarantees the product is sustainably produced. In the long run that will I think be very good for the industry. 
There are a few problems in the bill that I think I should give a bit of a heads-up on not the least of which are some of the time lines that are in place. We would expect the select committee process to go on for some months and the bill then needs to come back to the House. Even though I expect the passage of this bill when it does come back to the House to be fairly quick to have those sustainable standards effective from 1 January next year is a pretty big call. I hope that in conjunction with the consideration of this bill by the select committee there may be a work programme that can start with the officials in the Ministry for the Environment the Ministry of Economic Development and the Energy Efficiency and Conservation Authority to ensure that we are very very close to meeting those dates. I know from discussions with the Green Party with Jeanette Fitzsimons that a collaborative approach will be possible on this issue. 
I have one other question though that just struck me while I was listening to the member Jeanette Fitzsimons’ speech. It was to do with the comment that palm oil for example could be used for biofuel feedstock and that the kernel then could be used in New Zealand for food for dairy herds perhaps. I am a little bit struck by the fact that at the moment the emissions from our farming activities present a problem for New Zealand. Our farmers are very good and very efficient. Their husbandry and use of pasture means that emissions from our farm animals are far less intensive and damaging than emissions from many other types of farming operation. But I ask what happens if the cow consumes that palm kernel and then emits the gases that all animals emit. Are they still considered to be totally noxious totally negative and totally inappropriate or is the sustainable nature of the palm kernel industry such that it may get a different consideration? If that is the case then I ask why our grasslands in New Zealand would not be considered in the same way. I see that Ms Fitzsimons is smiling because she knows that I am trying not to say the words that might be more expressive. It is either that or I am so completely off-track here— 
Grant Robertson 
: That’s quite likely. 
Hon GERRY BROWNLEE 
: The member says that is highly likely but it does raise a very interesting question. The idea is that palm oil effectively can be made into biofuel and is carbon neutral. I presume that is the position Jeanette Fitzsimons would take. 
Jeanette Fitzsimons 
: Destroys the orang-utans and the forests. That’s what we’ve got against it. 
Hon GERRY BROWNLEE 
: Oh the member is not in favour of those things. 
Jeanette Fitzsimons 
: That’s why we’re not in favour. 
Hon GERRY BROWNLEE 
: Well OK I apologise. I misunderstood. It had me terribly worried that there was something new going on that I had missed. Palm oil as we all know is one of the great evils. It is a problem that a certain chocolate maker in New Zealand currently has because of the imported nature of its product these days. 
I do not want to take much more of the House’s time other than to say that if New Zealand is to have sustainable standards then I hope that those standards are easily achievable by the industry. I will give a commitment at this stage to ask those who are responsible for developing these standards to work with the biofuel industry in New Zealand to ensure that we get workable arrangements and do not end up with the sort of wild bureaucracy that causes people to cut corners and causes questions to be asked about the veracity of the scheme in the first place. This move will be positive for the industry here. The Government has supported the industry with funding of $36 million over the next 3 years. That means that bio-diesel effectively will be treated the same as bio-ethanol with the 42.5c subsidy on that production. As I said earlier in the House today I am delighted that five of the companies in New Zealand producing biofuels have signed up with the Energy Efficiency and Conservation Authority to receive some of that subsidy meaning that we can expect some 50000 to 60000 litres of biofuel to be produced in New Zealand this year. I think that is extremely encouraging. I look forward to the easy passage of this bill through the House today and then to a collaborative select committee process to ensure that as we are determined to have these regulations they are as workable as possible.