Boost For Bio-Diesel Producers
May 27th, 2009
After dumping a mandatory requirement for bio-fuel to be added to petrol, the Govt is giving bio-diesel producers a boost with a $36m subsidy over the next 3 years. Energy Minister Gerry Brownlee says the Budget will include a bio-diesel grant fund, which will provide up to $9m in the first year, up to $12m in the second and up to $15m in the third. This will be paid at a maximum rate of 42.5c a litre of bio-diesel. Brownlee says the initiative fulfills the Govt’s pre-election promise of providing incentives for bio-diesel producers, in recognition of the advantage which bio-ethanol already enjoys.
An industry analysis indicates bio-diesel produced in NZ will result in reductions of greenhouse gas emissions of between 50 and 90% compared with ordinary diesel. In December the incoming Govt repealed obligations on oil companies to put bio-fuel into petrol and diesel, starting with 0.5% and reaching 2.5% in 2012. The obligation was introduced by the Labour-led Govt to reduce NZ’s greenhouse gas emissions. National’s reversal was criticised by some in the industry, but it argued Labour’s measure had not set standards for sustainability of bio-fuels.
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