The phas­ing-in of E10 fuel runs into prob­lems, writes Craig Duff In­dus­try anger rises over fed­eral tax plan

Herald Sun - Motoring - - Front Page -

Can­berra favours bio­fuel im­ports

ADOL­LAR grab and a lack of sup­ply have de­railed the push to re­place reg­u­lar un­leaded with ethanol-blended petrol.

The Fed­eral Govern­ment’s plans to phase in an ex­cise on lo­cally pro­duced ethanol — and cut the ex­cise on im­ported prod­uct — have out­raged the lo­cal bio­fu­els in­dus­try and forced Queens­land to post­pone its moves to make mo­torists use the plant-based fuel ad­di­tive.

The is­sue isn’t even on the agenda in Vic­to­ria and South Aus­tralia, leav­ing NSW as the only state to man­date that petrol blended with 10 per cent ethanol be sold at ser­vice sta­tions.

And even NSW has scaled back — leg­is­la­tion to in­crease the amount of E10 sold from 4 per cent to 6 per cent of to­tal petrol vol­umes by next month has been de­ferred, as was the plan to re­place reg­u­lar un­leaded en­tirely with E10 from July.

The NSW Govern­ment cited the fed­eral plan to cut the ex­cise on im­ported ethanol from 38 cents a litre to 25 cents in July as a rea­son for the de­lay.

State-based mo­tor­ing bod­ies have weighed in on both sides of the fence.

The NRMA has backed NSW’s move to E10, but the RACQ has been a vo­cal critic of the Queens­land pro­posal, which would have meant reg­u­lar 91RON fuel was no longer avail­able.

The Fed­eral Cham­ber of Au­to­mo­tive In­dus­tries backs the Queens­land mo­tor­ing body. Spokesman James Good­win says the ex­tra fuel used when switch­ing to E10 will out­weigh any pump price ad­van­tage. Also it will force peo­ple with cars that can’t run on ethanol to switch to the dearer 95RON.

‘‘It’s a move that dis­ad­van­tages the most eco­nom­i­cally dis­ad­van­taged mem­bers of the com­mu­nity,’’ Good­win says.

An­other prob­lem for the wide­spread in­tro­duc­tion of E10 fuel is Aus­tralia can’t pro­duce enough of i t to meet de­mand, which has­in­creased by 34 per cent in the past year.

Na­tional ethanol pro­duc­tion is now about 350 me­gal­itres and, with only small-scale pi­lot projects be­ing im­ple­mented in Vic­to­ria and Queens­land, there is lit­tle scope to lift that out­put in the short term.

The car­mak­ers are ahead of the game, led by Holden’s flex-fuel Com­modore that can run on any­thing from pure petrol to an E85 blend.

Ford, Saab and Volvo also have flex-fuel cars and Cal­tex Aus­tralia has com­mit­ted to sup­ply­ing an E85 petrol at se­lected ser­vice sta­tions na­tion­ally.

Bio­fu­els As­so­ci­a­tion of Aus­tralia chief ex­ec­u­tive Heather Brodie says the only eco­nom­i­cally vi­able way to in­crease pro­duc­tion is for a govern­ment man­date on the use of ethanol fuel.

She is a ve­he­ment op­po­nent of let­ting the providers of im­ported ethanol ‘‘dou­ble dip’’ on sub­si­dies, which she says will ruin lo­cal pro­duc­ers.

‘‘The in­dus­try doesn’t have a prob­lem pay­ing an ex­cise, though given the in­dus­try is only three years old, we think it’s far too early.

‘‘But we do have a prob­lem with im­ported bio­fu­els get­ting a sub­sidy in the coun­try of pro­duc­tion and then an­other sub­sidy from the Aus­tralian Govern­ment,’’ she says.

‘‘A Cus­toms in­ves­ti­ga­tion has al­ready shown biodiesel is be­ing dumped here and that’s go­ing to be the case with ethanol as well.

‘‘On that ba­sis, how can lo­cal pro­duc­ers pos­si­bly com­pete?’’

LPG Aus­tralia chief ex­ec­u­tive Michael Car­mody has crit­i­cised the Govern­ment’s fo­cus on tax­a­tion, with­out con­sid­er­ing the value of al­ter­na­tive fu­els in terms of do­mes­tic en­ergy se­cu­rity and the re­duc­tion of car­bon emis­sions.

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