7. Hon Dr NICK SMITH (National—Nelson) Link to this
to the Minister of Energy
How can he be confident that the biofuels requirement to come into effect on 1 July 2008 will be met from sustainable sources?
Hon DAVID PARKER (Minister of Energy) Link to this
The Biofuel Bill includes a regulation-making power to set environmental standards. That was initially requested by the Greens, and is supported by the Government. Some submitters to the Local Government and Environment Committee have suggested that the bill should go further and set out sustainability criteria, and I expect that the select committee will consider that issue further.
Hon Dr Nick Smith Link to this
How can we have any faith in that provision, given that officials have advised us that the earliest that it could come into effect legally would be 2009, and that they are programming not to be able to introduce regulations until 2011; and is it not the truth that from 1 July any old biofuel will qualify, including biofuel produced from corn, which takes 50 percent more energy to be produced, and produces more carbon emissions, than normal mineral fuel does, and biofuel from other parts of the world where people are bowling over forests to produce it?
I have asked officials to explore the possibility of including more criteria in the bill itself, and I have also asked them to consider whether there should be mandatory reporting provisions for the providers of biofuel, so as to have them report on their source of biofuels.
Hon Marian HobbsWhat is the current European Union biofuels target, and are the Europeans also introducing sustainability criteria?
I am advised that the European Union target is for 10 percent of land transport fuels to be biofuels by 2020, and, yes, Europe too is now in the process of adding sustainability criteria.
Hon Dr Nick Smith Link to this
Does the Minister stand by the advice of his officials that it is not legally possible to introduce a standard by 1 July this year, and that a reasonable timetable to produce the sustainability regulations would go through to 2011; and does that scenario have New Zealand in a position of forcing biofuels when there is good evidence to show that they will be produced by methods that make the whole environmental problem worse, not better?
It is true that some biofuels are produced in unsustainable ways. I think that issue has been more and more acknowledged around the world in the last year. The way to address it is through having sustainability criteria, and we are in that transition just as fast as the rest of the world is.
Hon Dr Nick Smith Link to this
How will the environment benefit from the biofuel sales obligation, when Shell, BP, and Caltex have all told the select committee that they will be sourcing ethanol from South America, and when that biofuel is produced as a consequence of the clearing of over 2 million hectares of Amazon forest per year; and can he explain why New Zealanders should pay more for their gas in order to subsidise the clearance of forests in another part of the world?
It is clear that part of the solution to climate change and, indeed, oil security issues is biofuels. It is only part of the solution, but it is part of the solution. It is clear that in order to start to incorporate biofuels we actually have to have in place the infrastructure to do so. The amounts of biofuels that will be included in New Zealand’s fuel under the mandatory obligation in the early years are, admittedly, very small, so the consequences, should there be a proportion of unsustainable biofuels at the starting point, would not be dire. In terms of the suggestion that all the biofuels are likely to come from South Africa, I am advised—
No, I thought the member said South Africa; I misheard him. I was going to make the point that most biofuels are likely to come from South America, from sugar cane production. Not many countries in the world—in fact, I am not aware of any—are proposing to outlaw ethanol from sugar cane, because it has a good energy balance and much of it is actually produced quite sustainably.
Hon Dr Nick Smith Link to this
Can the Minister give an absolute assurance to this House that he will not introduce a biofuel sales obligation until such time as he has a standard to ensure that those fuels are produced by sustainable means?
I do not think the proportion of liquid fuels to come from biofuels reaches 3.5 percent until 2013 or thereabouts. In the early years it is a very small amount. I am confident that, as we go through the transition towards biofuels, the issues relating to sustainability will be sorted out. In actual fact, doing that will also advantage New Zealand, because our sources of future biofuel production will be sustainable.
Hon Dr Nick Smith Link to this
Is not this biofuels policy, which comes into effect on 1 July this year although we will not have any standards till some years down the track, turning into the sort of policy flop we have seen with the billion-dollar bungle over the Kyoto numbers; with the animal emissions levy—[ Interruption]—that was a big success, I say to Ruth Dyson; I am sure she was behind that one—with the negotiated greenhouse gas agreements, which the Government has abandoned; with the carbon tax, which the Government introduced, then abandoned; and with the solar water heating subsidy, which has resulted in the first drop ever in the number of solar water heating installations? Is not this policy just another policy botch-up by this Government on climate change?
I am absolutely clear that the answer to reducing greenhouse gas emissions does not lie in “sexy coal”, which is promoted by the National Party spokesman on energy; nor does it lie in increasing rates of deforestation, which the National Party seems to be favouring; nor will we make progress on reducing agricultural emissions by reversing the investment in research and development to reduce emissions. This Government has the country on the way to 90 percent renewables in electricity, the sensible introduction of biofuels, and many other sensible initiatives.
Hon Dr Nick Smith Link to this
I seek leave of the House to table photographs of the 2 million hectares of deforestation per year in the Amazon.
Madam SPEAKERHon Dr Nick Smith Link to this
I seek leave to table the advice from the Ministry of Economic Development saying that—[ Interruption] I raise a point of order, Madam Speaker. The last time I interjected on a point of order, I was biffed out. Both Annette King and Winston Peters interrupted my point of order.
Yes. That was after a warning, so this is the last warning. I do find sometimes, though, that if members pause for quite a long time, there is an irresistible urge to fill in the gaps. So could the member please move on.
Hon Dr Nick Smith Link to this
I seek leave to table the advice from the Ministry of Economic Development that it will not be able to introduce a standard for biofuels until 2011.
Peter BrownDoes the Minister accept that there is an increasing degree of concern among members of the general public when it comes to biofuels, largely around their future cost and the ability of the public’s vehicles to use them; can he advise where he thinks the cost is going and to what degree, and the current percentage of the vehicle fleet that would be able to use biofuels?
I do know that Gull has been selling 10 percent ethanol blends in Auckland to very happy customers this year. Presumably, those customers’ cars are running pretty well on them. I think some of the fleet disadvantages are overstated by people who do not want biofuels to proceed. In respect of cost, it is expected that second-generation biofuels will be more cost-effective and more environmentally sustainable than some first-generation biofuels. I think that answers the question.
Moana MackeyIs the Minister aware that although Dr Smith has chosen to focus on the submissions from the oil companies, the select committee also heard from a number of other groups, including biofuel producers who thought the bill was both reasonable and achievable?
Indeed I am. I understand that Gull has been quoted in the newspapers as saying it thinks that some of the costs have been exaggerated by the oil companies. I am also aware that some proponents of biofuels—notably, New Zealand producers who want to produce biofuels from tallow—think the bill is a very good advance for the New Zealand economy and the environment.
Hon Dr Nick Smith Link to this
I seek leave to table submissions from both Biodiesel and Ecodiesel companies that say they thought the lack of a standard until 2011 was a—