Yesterday Pansy Wong put out a press statement lauding the National government’s move to “kickstart New Zealand’s fledgling biodiesel industry”. Coincidentally, I’ve been visiting biofuel companies over the past few weeks and they’ve been telling me that the policies of the current National government are doing the opposite – they feel like the rug is being pulled from under them.
Before the last election the Labour government put in place a biofuels sales obligation. It would have required fuel retailers to mix a small amount of biofuels into their blends, thus guaranteeing a market for biofuel producers and ensuring the development of the fledgling industry, whilst at the same time also reducing our carbon emissions from transport.
For reasons known only to them, National repealed the sales obligation as soon as it took office and replaced it with a subsidy scheme for biodiesel. It was an odd move for a government that claims it wants to cut government spending – the sales obligation wouldn’t have cost the government anything, it would have put the cost back onto the oil industry, unlike their subsidy.
Biofuel producers I’ve spoken to have all said the same thing, as soon as the sales obligation was removed the oil companies walked away.Their slick marketing may try to convince us they care about sustainability and the environment, but in reality the mighty dollar rules.
The biofuel sales obligation wasn’t perfect, and I think companion legislation ensuring the sustainability of the feedstock (the material the biofuels are made from) was also needed. But recent history has shown that left to its own devices without any sort of government regulation, the oil industry has no intention of supporting biofuels. Gerry Brownlee’s biodiesel grants scheme has been a flop. It’s time to go back to the drawing board.