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The National Business Review NZ: Shell opposes biofuel quotas

Says incentives would be more effective
 
Oil giant Shell is warning that government biofuel proposals would lead to increases of at least 5 cents per litre on petrol and diesel and result in New Zealanders paying an extra $300 million per annum for their fuel.

The government has put out a discussion paper which proposes introducing compulsory biofuel sale quotas for oil companies.

These would start at  0.25 per cent of sales in 2008, and rise to 2.25 per cent by 2012.

But Shell says that meeting the proposed minimum sales requirements would require major infrastructure modifications, including changes to fuel storage facilities and petrol stations throughout New Zealand, and these would have to be carried out over a short period of time.

Shell says the cost of sourcing fuel would also increase as a result of the need to import biofuels or rely on a small domestic manufacturing base.

According to Shell, the best way to encourage biofuel use in New Zealand is to create incentives to support the development of next generation low-carbon, low-cost biofuel manufacturing technologies.

It says this will help to make biofuels competitive with conventional fuels and support speedy acceptance by the consumer and businesses alike.

Biofuels are renewable fuels that have the potential to produce lower carbon dioxide emissions than conventional fuels and are currently made primarily from food crops and animal waste bi-products (tallow).

The two main types of biofuel are bioethanol (blended with petrol) and biodiesel (blended with diesel).

The government’s discussion paper on Biofuel is online at:
http://www.transport.govt.nz
13-Sep-2006

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