By Kate Chapman of NZPA

Wellington, Oct 22 NZPA - Petrol retailer Gull agrees with the principles of a bill on sustainable biofuels but believes legislation is unnecessary because oil companies will self-regulate.

Green Party MP Jeanette Fitzsimons drafted the member's bill and said it would rule out biofuels produced from food crops and those that were made in ways that destroyed animal habitats.

In the environment select committee today, Labour MP Moana Mackey was "staggered" at the suggestion that big oil companies would source sustainable biofuels without regulation.

"You have so much faith in the four big players," she told Gull's general manager David Bodger.

Mr Bodger told the committee the regulation was not needed because the big oil companies were not interested in biofuel.

"I don't think they're going to do it, biodiesel is a hard row for them to hoe.

"They want to sell their own product. They want to pull it out of the ground and make money off it all the way through the chain."

Even the tax incentive was not enough to attract their interest, he said.

The only way to sell non-sustainable biofuel in New Zealand would be to import palm oil and manufacture it here to receive the subsidy.

"Half of me actually says it would be quite good if one of the giants does that because people would leave in droves, it's like your bar of chocolate," he said, referring to the public reaction when Cadbury began putting palm oil in its chocolate.

Consumers were outraged and Cadbury eventually agreed to stop using it.

Palm oil was increasingly seen as having a negative affect on the environment through deforestation, loss of biodiversity and an increase in greenhouse gases.

Ms Mackey said a lot of community organisations had to move resources from other projects into campaigning against Cadbury.

There was also a difference between people worrying about what they put in their bodies and what they put in their car, she said.

"I don't see that we're going to get ... the same type of public awareness or even just media awareness about raising the issue of palm oil being used in biofuel."

Mr Bodger said Gull supported sustainable biofuels and was "already doing it anyway".

Fonterra ethanol and industrial sales general manager Peter Motion said voluntary rather than mandatory reporting was enough.

Biofuels were marketed for their sustainability and it was in retailers' best interest to ensure what they sold was manufactured sustainably.

"Otherwise, it's one press conference and Gull are out of the market."

Biodiesel New Zealand supported regulation.

Uptake of biodiesel was limited by their customers to "take a leap" and market the competitive edge of sustainability.

Pacific Institute of Resource Management spokeswoman Kathy Weir said she welcomed the bill but would like to see it strengthened in some areas -- particularly the importation of biofuels from Brazil and third world countries which were not sustainably produced.

"If we have any respect for human rights we should get out of it (the market for Brazilian product)."

New Zealand had a good history of "taking a stand" on things, Ms Weir said, stating the anti-nuclear stance as an example.

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