Page 91 - Conveniece World Magazine Nov/Dec 2020

NSW ELECTS TO EXTEND BIOFUELS LAWS By ACAPMA CEO Mark McKenzie. Thirteen years ago, the then NSW government passed new laws to mandate the sale of ethanol and biodiesel blended fuels by the state’s larger fuel retailers. The 2007 legislation was premised on the prohibition of the sale of regular unleaded petrol by January 2012 and required liable fuel retailers to sell six per cent ethanol as a proportion of all petroleum product sales. Put simply, achievement of this target required that six out of every 10 customers visiting every service station in the state to buy E10. Following a high-profile campaign by fuel retailers in 2011, led by ACAPMA, the NSW Coalition government later bowed to public pressure and rolled back the planned prohibition of the sale of regular unleaded petrol in NSW in 2012. At the time, sales of E10 had already stalled at just 37 per cent of all petrol sales. Interestingly, sales of the higher priced premium petrol products were growing steadily in a market that was supposed to be price sensitive – suggesting that NSW motorists were shunning E10 in favour of ‘pure’ petrol blends given the reduced availability of regular unleaded petrol at many service stations. In the following two years, E10 sales fell from 37 per cent of all petrol sales (July 2013) to 31 per cent of all petrol sales (July 2015). That is, just 50 per cent of the NSW government’s ‘mandated’ target. The decline in E10 sales over this period resulted in renewed lobbying (and alleged additional political donations to the NSW Coalition and NSW Labor) from the state’s monopoly biofuels producer, the Manildra Group. The intensity of this lobbying of both major political parties increased substantially in advance of the March 2015 NSW election. Soon after being elected, the NSW Coalition government began work on an expansion of the state’s biofuels mandate. This action was reportedly to address the failed 2007 legislation, but no one believed that the action had not been motivated by a desire to respond to the pressure exerted by the state’s monopoly biofuels producer and political donor. Despite protestations by the fuel retail industry about the substantial business risk to smaller fuel retailers (and the consequent risk of increased fuel prices flowing through to NSW motorists because of higher compliance costs), the government pushed through changes to the mandate with dedicated support from the state’s peak motoring body. Long story short, the government rammed through legislation with the support of the Labor opposition to expand the failed 2007 mandate to smaller fuel retailers from 1 January 2017. This, despite strong and vocal opposition from MPs within the government’s own ranks, the NSW Greens and stakeholders in the fuel retail industry. The new laws came into effect on 1 January 2017. Since then, E10 sales have fallen from an average of 31 per cent (July 2015) of petrol sales to just 22 per cent (July 2020), TO PAGE 90 ACAPMA PETROLEUM INDUSTRY REPORT NOV/DEC, 2020 CONVENIENCE WORLD 89