New Zealand Prime Minister Helen Clark announced that a Biofuel Sales Obligation will be set at 3.4% of the annual energy content of total annual gasoline and diesel sales by 2012. The original proposal for an obligation mooted in September 2006 had proposed a 2.25% target by 2012.
New Zealand currently has a voluntary target for the use of biofuels in New Zealand of least 2 Petajoules a year by 2012. Under current estimates, that’s about 65 million liters of biodiesel or bioethanol, or around 1%.
In her speech to parliament, the Prime Minster said that the initial target “is considered sufficient to encourage the uptake of biodiesel and the development of infrastructure for ethanol distribution.”
The Biofuels Sales Obligation can be met with any biofuel sold as a direct replacement for gasoline or diesel in New Zealand. The biofuels can be produced domestically or imported and can be sold at any blend level provided they meet fuel quality specifications. The proposed obligation will include a roll-over option for year 1 and year 2 (2008 and 2009) so firms can delay providing biofuels to the market in the short-term. As biofuel supply is not an existing industry, the government has said, it is recognized that it may be practically difficult to supply biofuels in the early years of the obligation.
The New Zealand Petroleum Products Specifications Regulations 2002 (PPSR) currently allows for up to 10% bioethanol content in gasoline but does not give any specifications for bioethanol quality. The Energy Efficiency and Conservation Authority (EECA) has set up a voluntary bioethanol specification, which provides that:
The bioethanol must be of biological, not petroleum origin;
The bioethanol must meet the requirements of American Society for Testing and Materials standard ASTM D4806-01, with the exception that the bioethanol must be denatured by the addition of at least 1% regular or premium gasoline (as required by the New Zealand Customs Service), with the added gasoline meeting the PPSR;
Corrosion inhibitor must be added such that the resulting bioethanol-petrol blend has comparable corrosion properties to the base petrol; and
The bioethanol-petrol blend must meet the requirements of the PPSR.
The PPSR does not specifically provide for biodiesel. A New Zealand biodiesel standard entitled Automotive Biodiesel – Specification for manufacture and blending (NZS 7500:2005) came into being in 2005. This standard provides specifications for biodiesel manufacture (i.e. a pure biodiesel or B100 specification). It also provides a blending specification that allows for up to a 5% biodiesel-diesel blend for retail sale, and requires that retail blends meet the diesel specification in the PPSR. The standard also specifies some allowable properties for non-retail biodiesel-diesel blends.
The Prime Minster also announced a number of new sustainability priorities for the government this year, which among other items, include that as the VIP car fleet of the Department of Internal Affairs is replaced, vehicles which are more fuel efficient and have lower emissions will be acquired. She said that this will lead to 550 fewer tonnes of CO2 being emitted, 400,000 fewer liters of fuel being used, and $500,000 being saved over three years.