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Biodiesel grants scheme to be extended

Contributor:
Fuseworks Media
Fuseworks Media
Gerry Brownlee
Gerry Brownlee

Wellington, June 5 NZPA - Energy Minister Gerry Brownlee says the Government's biodiesel grants scheme is being extended but the Opposition say the changes are needed because the scheme is a flop.

The scheme was introduced in July last year to kick start biodiesel production in New Zealand.

Under the present criteria, the biodiesel sold must be used in a blend with ordinary diesel of no more than 20 percent biodiesel.

That is being extended to blends up to and including 100 percent biodiesel.

Mr Brownlee said it would provide an incentive for businesses and individuals who were willing and able to use the higher level blends.

The change in the scheme was expected to increase production and sales of biodiesel.

"High level biodiesel blends and 100 percent biodiesel are appropriate for niche applications such as eco tourism," he said.

"Several businesses have indicated they are keen to use higher level blends and unblended fuel to reduce their greenhouse gas emissions as much as possible, and we don't want to discourage them."

National repealed a Labour Government biofuels sales obligation and Labour MP Labour MP Chris Hipkins said the replacement subsidy scheme was a total disaster which had hamstrung the fledgling biofuel industry.

"As at the end of May this year less than $200,000 of the $36 million that has been set aside for the scheme had been taken up. It's been a total flop. Gerry Brownlee claimed the biodiesel grants scheme would create 240 jobs yet it's quite clear that was all bluster and very few jobs have eventuated," Mr Hipkins said.

"How can Gerry Brownlee claim that the government is serious about encouraging the uptake of biofuels when National's flagship policy in this area has been a total failure?"

Biofuels are a renewable transport fuel, and the higher the blend the greater the environmental benefit.

Six biodiesel producers are registered to take part in the grants scheme. Most of the biodiesel that has received the grants to date is made from used cooking oil and oilseed.

The scheme allows for grants of up to 42.5 cents per litre to biodiesel producers who sell 10,000 or more litres of eligible biodiesel each month.

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