Farmers, foresters and landowners may be among the biggest losers from the government’s decision not to pursue its biofuels mandate, kicking away a potential land use option and carbon reduction opportunity.
In a return to “bread and butter” political issues, Prime Minister Chris Hipkins announced a raft of policies to be dropped in the run-up to this year’s election, including the move to require that biofuels be added to the national supply, to reach a 9% target by 2035.
The dropping of the requirement leaves the government focused solely on electric vehicles as a low-zero emissions option for transport, and with no policies to reduce emissions from New Zealand’s 4.5 million diesel and petrol vehicles.
Bioenergy Association of NZ chair Brian Cox said there was clearly a lack of political will for the mandate, even before the latest policy clean-out.
“And when it comes to liquid fuels there really is no industry supporter there. Gull are doing their quiet thing with ethanol, Air NZ is working on aviation gas, marine is only just starting to take an interest, and KiwiRail is not driving it for trains or ferries. There is no real champion out there for them,” Cox said.
He said it is another lost opportunity for better integration of land use and fuel sources, given NZ has an abundant supply of forest waste, and land that could be suitable for biofuel crop production.
Other potential crop types include non-pine tree species, miscanthus grasses and crop residues.
“Of the three biofuel sources, liquid, gas and solids, it is gas that has really found a champion recently. That has come in only a year as that industry realises its conventional supplies will be limited. It is now looking harder at bio-energy sources for gas.”
He sympathised with farmers who not only miss out on a potential land use option, but who are also facing greater pressure to change farming practices to lower emissions, while the transport sector’s emissions from 4.5 million vehicles remain unchanged.
Cox said he fears future interest in biofuel for vehicles could fade for good, given there appears to be little cross-party support in its future, even from the Greens.
Climate Change Minister James Shaw backed scrapping the mandate, firmly supporting electric vehicles.
But Cox said NZ is moving to a stage where the push for electrical vehicles is simply a wealth transfer exercise, where consumers – rather than the state – are compelled to invest in the vehicles.
“That contrasts to a biofuel sector where often the fuel can simply replace the conventional fuel with little or no cost to the consumer.
“The higher cost of that biofuel could be subsidised at a lower cost than what will be invested in big hydro projects to increase electricity supply, like Lake Onslow.”
Cox said forestry’s industry transformation plan has helped that sector become more co-ordinated, and biofuels could have fitted within it, particularly given the fact that the government is also working on a bio-economy development plan right now within its emissions reduction goals.
“And when we are talking about biofuels, we are talking land use and management: what can we do with the untapped resources like forest waste and land not used on farms?”
David Rhodes, Forest Owners Association CEO, said the loss of the biofuels mandate may be a step back for his sector as it works to try to develop opportunities for forest waste use, particularly in Te Tairāwhiti.
“One of the challenges for our growers is you do not have the places to send forest waste to. My sense is whatever solution you come up with, you need external help to do it.”
Dave Bodger, CEO of Gull, said the prospect that biofuels are going to be more expensive, in some cases twice the price of conventional fuel, means they were always going to struggle to find a political champion in Wellington.
“We were very firm in our submission that government needed to be upfront about what the additional cost was going to be. While much was said about emissions and land use change, it was very quiet on price impact,” Bodger said.
Individually the likes of biodiesel can be 50% more, ethanol can be 20-30% greater and petrol two to three times greater than conventional.
Bodger said NZ would also have had to import its biofuel to meet the mandate, given that the potential for fuel production from the likes of forest waste still appears to be some way off.
“And you really do have to have a driver to make this all happen. The political will is more around the ETS [Emissions Trading Scheme], but we cannot plant our way out of this.”
He believes any further moves on biofuel are dead for now.
“And we had significant political opposition to it, which only added to uncertainty.”
