George Christensen (Dawson, National Party) Share this | Hansard source

That is probably the first and only time that I will use those words, member for Moreton. This is a clean fuel. I feel for them with the dilemma they have imposed on this. As willing partners in the waste of the Rudd-Gillard-Rudd years I suppose they are partly responsible for this change. The change is not bad but it would have been better to actually see the zero excise regime rolled out until 2021.

I am very happy to talk about the ethanol industry, because I represent the largest sugar-growing electorate in the country—it includes the Mackay region, Proserpine and the Burdekin region—and I have long supported an ethanol mandate in this country. In particular, I think that it should be compulsory for North Queensland servos to have this product at the bowsers. There is no point in beating around the bush on this issue, because a half-hearted approach is not going to achieve anything. A proper ethanol mandate in Queensland would ensure the viability of, say, Sarina's ethanol plant, in the area that the member for Capricornia so ably represents, and it also may pave the way for future investment in ethanol production by groups like Mackay Sugar, which the member for Capricornia, by virtue of the Electoral Commission, represents as well.

In the Burdekin, in my electorate, Austcane Pty Ltd has been working on something for a long time. It has a substantial amount of work done on the establishment of a mill that would only produce ethanol. That would provide jobs, needless to say, but it would also give cane farmers in that area a supply option other than the existing mill monopoly that is controlled by Singaporean milling company Wilmar. I would like to see the state government bring in a phased-in mandate where the government would require fuel retailers to have a certain percentage of ethanol in their overall fuel mix and have that percentage ramping up over time. We do not want to see them rush to 10 per cent straightaway, because if they just went from zero to 10 then all it would result in is imported ethanol and no domestic production occurring, because the time frame to get some of these production lines started up is simply too long. If the plan the state government currently have is simply to require service stations to have a single bowser selling E10 as an option, it is going to be a missed opportunity. That sort of approach would see those E10 bowsers tucked down the back as an afterthought, because the reality, as we all know, is that the oil companies make less money out of an E10 blend.

A proper mandate for ethanol in Queensland would be advantageous for a number of reasons. Ethanol is a renewable resource and it is proven to have a lower particulate matter output, which is why groups like the Asthma and Allergy Foundation of America support the use of ethanol fuels. Secondly, for motorists feeling the pinch of high fuel prices, an ethanol blend is actually a cheaper fuel by virtue of this excise regime. Thirdly, we have a problem in this country with fuel security, and the more we look at domestic production of fuel sources the better off we are.

This issue was highlighted recently when terrorist group al-Qaeda urged followers to attack or sabotage the companies that supplied oil to countries like Australia. The terrorists targeted what they thought were choke points, and one of those was the Malacca Straits, through which half of Australia's oil imports are transported. In response, we saw some debate at the time about fuel security in this country. The former Deputy Chief of Air Force Air Vice Marshal John Blackburn warned in an ABC interview at the end of last year:

If there's an interruption to the fuel supply chain coming in from overseas, after about a week we're going to run into serious problems. Without fuel can't go to work, can't get to school, you can't get food.

He went on to say:

Sydney, for example, in one week alone there's about 45,000 truck trips just distributing food. You'd start to see the food run short in the shops probably in three to four days. You start to see the chemist run out of supplies after about three or four days and our services we take for granted; electricity supply, water supply, none of this can happen without fuel for the supporting elements for those functions. So you'd start to see society collapse.

I do not want to paint too bleak a picture of the potential risk here, because there are some safeguards in place. For instance, Australia sources its fuel from many different countries and it is transported through many different shipping routes. But we should be building more domestic self-reliance into the system. We should be embracing biofuels like ethanol for the many advantages they bring, instead of being like the people that are out there looking for ways to tear the industry down or, worse, manufacture reasons to attack the industry.

Unfortunately, some of these people are within the bureaucracy of this government. I single out the Bureau of Resources and Energy Economics, because they have been known for their anti-ethanol stance. They came out with a report saying that the so-called subsidies to the ethanol industry should be completely scrapped and we should ramp it up to the fuel excise. I was at the time, and I still remain, fiercely opposed to the recommendations that came out in that report. The report was wrong. It understated the employment that had been generated by the ethanol industry, and it was talking about how ethanol excise was being forgone to the tune of 38c a litre, forgetting the fact that both sides of the political spectrum had only ever said, once this whole idea of ethanol rebates was begun, that ethanol would be, at the very most, taxed at 12½ cents a litre. If those Canberra bureaucrats had had their way, Austcane's proposed ethanol mill in the Burdekin would probably never see the light of day and I would have had very grave fears for the future viability of the Sarina ethanol distillery. Just to highlight the tenuous nature of the industry, the Sarina distillery was affected by weather one year and could not make its supply contract, and customers pulled the pin on ethanol as a result.

We have to consider that Australia does not operate in a vacuum, and it is interesting to consider how our market also fits into the global ethanol industry. Brazil leads the world in development of ethanol. From 1975 to 2000, sugar cane yield per hectare in Brazil increased 33 per cent, cane sugar content rose eight per cent, ethanol yield from sugar rose 14 per cent, and fermentation yields rose 150 per cent. The US now leads the world in ethanol production and, combined with its advances in gas, it is becoming increasingly self-sufficient in fuel. Australian sugar cane produces a higher sugar yield than Brazil, and sugar produces a far greater ethanol yield than corn, which is what is used in the US for the production of ethanol. Why are we not taking better advantage of these factors?

The global sugar market is volatile at the best of times. We are talking very soon in this country about developing the North. There is going to be a white paper announced, sugar cane being one of the easiest products to grow in that neck of the woods. We need to grow better markets that are stable. A 10 per cent ethanol mandate in the state of Queensland would provide that stability. If a 10 per cent mandate were implemented, not just in that state but right across this nation, it would take more than half our current sugar cane crop to produce. Traditionally, farmers are only paid for the sugar produced from their cane. Proprietary mills mostly do not pay for the by-products of the sugar-making process like bagasse, molasses and ethanol. But dedicated ethanol mills such as the one proposed by Austcane convert directly to ethanol. More options would give cane farmers some bargaining power when it comes to selling their product.

At the moment, there is really only one option, so cane farmers are price takers, not price makers. I would love to see a situation where a mill producing only ethanol rolled out so that our farmers could get a better and more secure and stable form of income in that neck of the woods. It is a little disappointing there is not greater national interest in the use of ethanol as a fuel, especially given the climate scare that we are constantly hearing about and that is perpetuated by the green movement. Ethanol as a fuel is greenhouse neutral, because carbon dioxide produced when the fuel is burnt is reabsorbed as the crop grows. Ethanol plants can be powered by the crop itself, using co-generation, which is already being used by a mill in Mackay. Burning ethanol instead of fossil fuels reduces emissions of carbon monoxide, hydrocarbons, 1,3-butadiene, benzene, toluene, and xylenes. Reducing these emissions would see a reduction in chronic diseases like asthma, bronchitis and uvulitis. We need to expand this industry. (Time expired)

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