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Biofuels—Bio-diesel Production Grants

Wednesday 29 July 2009 Hansard source (external site)

Auchinvole4. CHRIS AUCHINVOLE (National—West Coast - Tasman) Link to this
to the Minister of Energy and Resources

How many companies, if any, have signed up to receive grants under the Government’s bio-diesel grant scheme?

BrownleeHon GERRY BROWNLEE (Minister of Energy and Resources) Link to this

I am pleased to report that the grant scheme to encourage bio-diesel production in this country has made a strong start: five companies have signed up or have been offered contracts for grants to start the production of domestic bio-diesel. The companies are BioDiesel Oils (NZ) in Tāmaki; Ecodiesel in Onehunga; New Zealand Ester Fuels in Tuakau, South Auckland; Environ Fuels in Te Kūiti; and Biodiesel New Zealand in Christchurch.

AuchinvoleChris Auchinvole Link to this

Why did the Government introduce the bio-diesel grant scheme?

BrownleeHon GERRY BROWNLEE Link to this

The Government believes that biofuels and a domestic biofuel industry are an important aspect of our future fuel requirement, so $36 million has been set aside over 3 years to be paid out monthly to New Zealand biofuel producers. Although the Government does not support a mandatory sales obligation, unlike our opponents, it has moved to encourage small production in this industry with the subsidy that applies at the present time. So it is encouraging to see five of those companies signing up to the programme in the last few days.

HipkinsChris Hipkins Link to this

Will the Minister now concede—[ Interruption]

SmithMr SPEAKER Link to this

I ask the honourable member to forgive me, but members must show some courtesy. The noise in the House is simply becoming unacceptable. I do not like interrupting; the House should flow freely. I apologise and call Chris Hipkins.

HipkinsChris Hipkins Link to this

Will the Minister now concede that the Government made a mistake when it scrapped legislation that would have supported the biofuels industry to become established and sustainable without the need for taxpayer subsidies, or does he believe that in these tough economic times providing $36 million worth of taxpayer subsidies to biofuels companies is more important than ensuring that the industry develops on a sustainable footing?

BrownleeHon GERRY BROWNLEE Link to this

There we have the fallacy of the Labour Party policy—

SmithMr SPEAKER Link to this

Question time is not a time to launch into another political party. The Minister has been asked a question, and the House deserves an answer to it.

BrownleeHon GERRY BROWNLEE Link to this

I raise a point of order, Mr Speaker. If question time is not a time to launch into some other political party, why did you allow that question? That is exactly what it was. [ Interruption]

SmithMr SPEAKER Link to this

There will be some order in the House because a point of order has been raised. I say to the Hon Gerry Brownlee that the member asked a perfectly fair question about whether the industry should be subsidised or whether it can be sustained on its own basis. That is a perfectly fair question because taxpayers’ money is used in paying subsidies. The Minister has a responsibility to this House and should answer the question rather than just launch into the questioner. That will not be tolerated under my Speakership.

SmithHon Dr Nick Smith Link to this

I raise a point of order, Mr Speaker. It would be fine if the member’s question was simply about the $36 million subsidy. But the member’s question was loaded with imputations about the use of public money, discrediting the Government. For you to say that a Minister must answer a question in an absolutely straight and non-political way, the quid pro quo is that the question should be not loaded with imputations. In this case it was, and that is why the Minister was perfectly proper to respond in the way he did.

SmithMr SPEAKER Link to this

I do not need more assistance on this matter. Members will resume their seats. The question, obviously, may well have had some political loading in it, but it was not a purely political question and it does not justify the Minister launching into an attack on the questioner’s party. There is no problem in putting a jab in an answer, but there is with launching one initially. We would like to hear some answer first.

BrownleeHon GERRY BROWNLEE Link to this

The previous Government’s decision to require biofuels to be mixed into the New Zealand fuel mix by way of an obligation would have meant that some 60 million litres of bio-diesel was imported into this country to meet that obligation in the first period. No sustainable standard was in place for where that biofuel should come from, and every indication was that it would have come from non-sustainable sources offshore. It seems an absolute fallacy of belief to suggest that the importation of unsustainably produced biofuels into New Zealand was somehow good for the global situation with regard to our carbon dioxide emissions. The Government’s programme of subsidising the industry to the same extent as the taxes that are applied to petrol, and giving them the same deal as bio-ethanol, effectively ensures the development of a sustainable industry here in New Zealand. That is far-sighted for the country, not the short-sighted, feel-good rubbish that typified the last Government’s policy in this area.

AuchinvoleChris Auchinvole Link to this

Has the Minister seen any reports to suggest that the Government’s bio-diesel grants scheme will not work?

BrownleeHon GERRY BROWNLEE Link to this

Yes. Notwithstanding the inference in the last question, when the Government removed the mandatory sales obligation on biofuels last December Labour members then claimed that this would cost jobs and kill a fledgling industry. Labour also claimed it would mean that workers and investors would be out of jobs and out of pocket. It further claimed—and it was strident in these claims—that a particular company, BioDiesel Oils (NZ), would go out of business. I can report that BioDiesel Oils (NZ) has signed up to the Government’s programme.

SmithMr SPEAKER Link to this

I say to members on the Labour front bench that the level of interjection is simply unacceptable. That supplementary question has been answered and I have called the next member, who is a senior member of the House. She cannot possibly be heard above the rabble. I ask members to just reflect a little on the lack of decorum.

FitzsimonsJeanette Fitzsimons Link to this

Are any of those companies concerned that their product could be undercut by biofuel made from unsustainable or even destructive sources, such as imported soy beans that should be fuelling the stomachs of the hungry, or palm oil grown by clearing tropical rainforests; if so, will the Government this afternoon support my bill, the Sustainable Biofuel Bill, which will ensure that only sustainable biofuels can be sold in New Zealand?

BrownleeHon GERRY BROWNLEE Link to this

Yes, I believe that is a concern of the local industry, and so it should be. Most of the requirements to meet the previous obligation would most likely have come from unsustainably produced biofuels. The subsidy is not available for imported fuels. I think that is an important aspect of the programme. Further, the member’s initiative in putting a bill into the ballot will be supported by the Government today. I can report that the Ministry of Economic Development has already begun work in developing standards. I am sure that as we go through the select committee process, the result will be positive not only for the member’s own aspirations with regard to her bill, but also for the industry as a whole.

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