NSW ethanol mandate suspended

The NSW Government has announced it will suspend any increase in the ethanol mandate, from the current four per cent, because of supply shortages.

Minister for Lands, Tony Kelly, said unfortunately investor confidence is low because of a number of factors including the Global Financial Crisis, the higher Australian dollar, lower petrol prices, and uncertainty over the Federal fuel excise regime.

“As a result, the supply needed for higher mandatory levels is simply insufficient at this time,” the Minister said.

“If we were to proceed to our next target of 6% in January, we would force wholesalers to turn to imports, which would work against one of the key objectives of the Biofuels Act."

The announcement means:

# The move towards a 6% mandate will be delayed until 1 July 2011;

# The total phase out of regular unleaded (ULP) suspended until 1 July 2012; and

# The 2% biodiesel mandate will not be impacted.

The Australian Lot Feeders Association welcomed the move, but called upon the government to scrap the policy once and for all.

“The benefits to the environment can also be disputed with CSIRO research concluding that ethanol provides only a 1-3% greenhouse gas emission benefit over regular unleaded petrol on a life cycle basis," ALFA president Jim Cudmore said.

“Given ethanol also has inferior fuel economy compared to regular unleaded petrol, with more fuel used and hence emissions released to travel the same distance, any environmental benefit is eroded further.

“With NSW now the only Government in Australia supporting a mandate of ethanol content in fuel, we call upon it to scrap the policy indefinitely."

source: farmonline