Government announces biofuel mandate for transport sector
The Government has announced it will mandate the use of biofuels for cars, trucks, trains and ships to reduce emissions in the transport sector.
Energy and Resources Minister Megan Woods announced on Wednesday a Sustainable Biofuels Mandate will take effect from April 1, 2023.
“Biofuels offer a practical, low-emissions solution to reduce New Zealand’s transport sector emissions and will be scaled up over time resulting in greater emissions reductions from transport fuels,” Woods said.
Fuel wholesalers – those who first import or refine fuels – must cut their total greenhouse gas emissions for transport fuels they sell by 1.2 per cent in 2023, then 2.4 per cent in 2024, and then 3.5 per cent in 2025, by replacing part of their supply with biofuels.
“Land transport accounts for almost half of all of our national carbon dioxide emissions and we need to take action to start to mitigate transport’s impact on climate change,” Woods said.
She predicted the mandate would prevent around one million tonnes of emissions over the next three years.
“Biofuels mandates are common overseas with more than 60 jurisdictions having them; we had one on the cards more than a decade ago but it was repealed before it came into effect,” Woods said.
Transport Minister Michael Wood said that would reduce emissions from the transport sector emissions while the rest of the Clean Car Package “revs up”. This includes rebates for electric vehicles, more chargers along state highways, and a push to import more climate-friendly cars.
“We need to transition to low-emission vehicles, and biofuels will help reduce emissions while we make that transition,” he said. “Biofuels have the potential to boost economic recovery through encouraging a local industry and creating jobs.”
A separate mandate for aviation fuel would be developed next year; The Ministry of Business, Innovation and Employment (MBIE) was working with Air New Zealand on a study to determine the potential for producing sustainable aviation fuel domestically.
Statistics NZ data shows domestic aviation greenhouse emissions in 2018 were up 12 per cent from 2017, and up 17.7 percent from 1990. They made up 3.2 per cent of all carbon dioxide emissions in 2018.
However, there are concerns the mandate will hike the price of fuel. An MBIE report from June says: “A biofuels mandate will, however, increase fuel prices as biofuels cost more to produce.”
“If the Sustainable Biofuels Mandate is implemented as proposed, in 2025 it would result in a 0.2 per cent (0.4 cents per litre) increase in baseline petrol prices, a 5.8 percent (7.1 cents per litre) increase in baseline diesel prices.”