Woods Megan: Energy (Fuels Levies and References) Amendment Bill — In CommitteeText is incorporated into the Bound VolumeWoods Megan: Energy (Fuels Levies and References) Amendment Bill — In Committee[Sitting date: 11 February 2015. Volume:703;Page:1496. Text is incorporated into the Bound Volume.]Dr MEGAN WOODS (Labour—Wigram):Thank you Mr Chair—I am very keen to speak. I want to speak to Supplementary Order Paper 45 in my name. It amends clause 10 and to be specific it amends section 35(1)(fa) in clause 10(2) by inserting after “petroleum of engine fuels” the words “other than biofuel or biofuel blend as defined in the Customs and Excise Act 1996”. The purpose of this is to send a very clear signal about the importance of biofuels and the importance of transitioning away from a complete reliance on fossil fuels to different types of energy. It is a different way of thinking about New Zealand’s energy security as my colleague Clare Curran talked about in her contribution on this bill.One of the things that we do have to be prepared for is the fact that if we are going to encourage a biofuel industry in New Zealand we have to have the Government behind it. My colleague Stuart Nash talked about the very low contribution in reality that this excise puts on fuels. What exempting biofuels and biofuel blends from this levy does is it shores up the very tight economics that exist around the viability of the biofuel market at this stage. What we know from history and from the companies that are commercially involved in biofuels is that every few cents or part of a cent matters in terms of whether or not we can have biofuel as a real alternative to fossil fuels.When Labour was last in Government it took its responsibilities around encouraging a biofuels industry very seriously. Unfortunately a lot of the measures we put in place were repealed by the current Government but we would like to use this opportunity to send a clear message that once again we do want to look to our future. We want to look to a future that is grounded in the 21st century a future that acknowledges that our planet is changing and that we need to do things very differently.What Labour did in 2008 was to place an obligation on fuel retailers that ensured that a small percentage of the fuel that they sold was indeed biofuel. This provided certainty for biofuel companies that were considering whether or not to invest in New Zealand and whether or not there would be a market for their product. So this Supplementary Order Paper is in much the same vein. It is about providing that incentive and it is about providing the certainty for that to be done.The New Zealand Bioenergy Strategy prepared by the Bioenergy Association indicated that 30 percent of our transport fuels could be from biomass by 2040. This is quite a long range. We are looking out to our future but we really could be moving towards 30 percent at this date. But it does need encouragement and we do need to signal very strongly that this is the kind of future that we are looking for. Some research has indicated that we could actually be a whole lot more aspirational around this.Scion our wood Crown research institute which has done a lot of work in the use of biomass from wood and forestry products has shown that long-term we theoretically could do 100 percent of our fuels from our biomass. Of course as Gareth Hughes pointed out in his contribution we do have to ensure that we are not infringing on our food supply in our rush to produce fuels but what we do have to realise is that there really is an opportunity here for New Zealand. There is not only an opportunity to do better for our planet but there is also a commercial opportunity for New Zealand companies to do very well in this. What we do know is that in New Zealand we are very well placed to do this because of the amount of biomass that we produce because we are primarily a primary-producing country and we do have quite a large waste stream from our biomass that can be utilised as well.What is more New Zealand has a flourishing biological sector and a biotech sector that has become very skilled which really could make this industry succeed in New Zealand because the reality at this stage is that the economics of producing biofuels or biofuel blends—whichever you like—is likely to be carried through by the co-products that are extracted through the production of these biofuels. We have a very strong history and a very strong record of a number of very innovative companies in New Zealand that have made very good use of very strong science in this area made very good use of very strong knowledge and indeed have become some of our biotech success stories which we are all very proud of. But it is not only small start-ups that are seeing the opportunities here. In fact just last year Z Energy one of the largest energy players in our market place announced plans to spend $21 million on a biodiesel plant at Wiri in order to process tallow from the meat industry. Again what we have is the utilisation of a waste stream from another of our primary industries.I think that what we see is a real opportunity here for New Zealand. We see an opportunity for New Zealand to move away from a sole reliance on fossil fuels and I think there is maybe even across on the Government benches a growing realisation that that is what the 21st century is going to need to be about and that we are going to have to look at different ways of doing things. It may be rather symbolic but we have the opportunity in this piece of legislation to exempt biofuels and biofuel blends from this extra levy to make the economics of it stack up just that little bit more—to make it something that really is a goer something that we can give a real opportunity to and we can invest not only in our innovative companies but also in our future and transition ourselves into what we know is coming.I would like to hear the Minister in the chair Nicky Wagner respond to my suggestion in Supplementary Order Paper 45 that we do exclude biofuels and biofuel blends from this. I would like to hear the Minister talk about what she thinks and if this is not the correct way to do it what the correct kinds of signals to give to this industry are and what plans the Government has to ensure that we are preparing for a future in the 21st century. If the Government were not to support this I would like to hear from the Minister in the chair as to why it will not support this why it will not make this very symbolic gesture which as we have already heard from colleagues who have spoken is in reality very low level.At the moment we have very low levels of biofuels so we are not talking about great revenue streams here. But what we are doing is talking about backing our future—backing our companies that excel in this area and backing our planet for the 21st century. We know that this is what the future has to bring. I would like to see the Government come on board and support a measure that is about planning for that future. Thank you very much.