Ian Causley (Page, Deputy-Speaker) Share this | Hansard source

If the member for New England wants to seek the call again, he can try. We can have a look at what the government has done in this particular area. The government has given $37 million in biofuels capital grants and $56 million in ethanol production grants. It has made a commitment to ensure that ethanol remains effectively excise-free until 2011. It has introduced an E10 blend that is suitable for Australian vehicles so that it is clear to people that these vehicles are safe to use E10. Production of ethanol in Australia has not been stagnant. We know of new plants that are coming on-stream. In the last 12 months there has been a 75 per cent increase in production from 23 million litres to 41 million litres. Last June there were 70 service stations selling ethanol; today there are 290. The use of ethanol in Commonwealth vehicles has increased by 2,000 litres, and ethanol and biodiesel fuels are now available at 400 outlets across Australia.

As I said earlier, we would all like to see cheaper fuel prices. We would all like to think there was a magic wand that could be waved and that, if only we produced ethanol, methanol or some other biodiesel—maybe from canola or soy—then all of a sudden our fuel problems would be overcome. In fact, that is just not the case, and you are holding out false hope if you go out and make those claims. During the break, I had a close look at the industry in Europe. I went to a large ethanol plant in France at which ethanol is produced from wheat and sugar. They are being subsidised by France to do that. I asked the managing director of the company at what point ethanol becomes competitive. Without hesitation, he said he thought ethanol becomes competitive when oil is at $US60 a barrel. That is good. It shows that there can be a competitive industry and that oil is not going to reach a high peak if you can establish an industry that will be competitive against oil. Australia has to look very closely at what it can produce. I put it very strongly to the member for New England that there is no way in the wide world that Australia can produce enough ethanol for a 10 per cent mix in Australia.

See this speech in context