New ethanol laws now in force

New laws requiring fuel retailers to stock and sell E10 in NSW and Queensland came into force on January 1. ACAPMA says the laws in each state are different and fuel retailers should ensure that they understand the impact of the regulations on their business:

NSW

In NSW, the laws are applied site by site. Fuel retailers selling more than three types of petrol or diesel (ie, two petrol grades and diesel or more) and selling 900,000lt of liquid fuels (ie, petrol and diesel) in two consecutive quarters must comply with the new laws unless there are grounds for the site to be exempted.

For retailers with fewer than 20 sites which were not covered by the previous laws, the requirement to sell biofuels does not take effect April 1.

All eligible fuel retailers are required to report fuel sales quarterly, with a requirement for fuel retailers to sell six per cent ethanol as a proportion of all petroleum sales (ie, regular unleaded and premium unleaded).

“In simple terms, this means the NSW Government is seeking to ensure that six out of every 10 petrol customers purchase E10,” ACAPMA CEO Mark McKenzie said.

“We have consistently said that the six per cent ethanol target is fanciful and there are real questions about how enforceable the target actually is under common law provisions in Australia.”

Nonetheless, eligible fuel retailers are required to demonstrate that they are making all reasonable attempts to meet the target.

Fuel retailers can seek exemptions from the new laws by submitting an application to the NSW Department of Fair Trading. The grounds for securing an exemption are detailed in the exemption guidelines on the NSW Fair Trading Website together with details on how to apply for an exemption.

In addition to the new biofuel laws, the NSW Government has made changes to the fuel price board legislation that now require the price of E10 (in addition to diesel and LPG) to be listed on the rate board if it is sold.

“Unfortunately, the consultation on the detail of the NSW laws was guillotined late last year and there remains a good deal of uncertainty about some aspects of the new legislation,” Mr McKenzie said.

“As a result, we believe there’s a significant risk of adverse industry and consumer outcomes and we’ll be closely monitoring the operation of the NSW laws over the next 12 months.”

Queensland

In Queensland, the laws are applied on an ‘enterprise’ or whole-of-business basis. This means fuel businesses need not sell E10 at all of their sites, but they must demonstrate that they have made all reasonable attempts to sell three per cent ethanol as a proportion of unleaded petrol sales only (the target increases to four per cent of unleaded petrol volumes on July 1, 2018).

Fuel retailers with fewer than 10 sites are automatically exempted from the biofuel mandate, unless they have individual sites selling more than 500,000 litres of petrol (all grades) in two successive quarters. In this case, the mandate is applied to the enterprise only for the volumes sold at these sites.

All eligible fuel retailers are required to comply from January 1, 2017.

As for NSW, businesses can apply for a partial (ie, selected sites) or wholesale (ie, entire business) exemption subject to certain conditions and submission of an exemption application to the Queensland Department of Energy and Water Supply (DEWS).

Details of the conditions for exemption and the exemption process can be found on the DEWS website.

“Different to NSW, the Queensland Government took the time to work consultatively with all stakeholders to develop legislation that strikes a good balance between the Government’s goal to promote biofuels and the need to protect against adverse business and fuel-price outcomes,” Mr McKenzie said.

As yet, the Queensland Government has not introduced any associated requirements with respect to fuel price boards, but it is understood the state is considering the need for such legislation.

Summary

All fuel retailers in NSW and Queensland should acquaint themselves with the new laws – if they have not already done so – by referring to the above websites.

ACAPMA members requiring further information on the new laws or the exemption process should contact ACAPMA (1300 160 270 or communications@acapma.com.au).

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