Fiona Nash (NSW, National Party) Share this | Hansard source

I rise today to talk about the issue of biofuels in this nation. I think it is an issue that we need to keep focusing on. It is vitally important that we get biofuels and the future of biofuels right in this nation. I will talk today particularly in terms of ethanol.

What we have seen in the past is a complete lack of determination and interest from the major oil companies in committing to using ethanol in this nation. We have seen an entire range of benefits presented for this particular fuel in this nation. We have health benefits, environmental benefits, benefits for rural and regional areas, jobs and opportunities that can be created and price benefits from ethanol, and we are seeing this out there in the community. We are seeing ethanol blended fuel at 3c and 4c a litre less for consumers right out there across the nation. The only thing is that it is not across the nation: it is in very few service stations, so consumers cannot access it. And why is it not there and available? It is not available because the major oil companies are not coming to the party and doing what they should.

People would be very aware that, at the end of last year, the Prime Minister and the Deputy Prime Minister came to an agreement with the major oil companies to set some voluntary annual targets so that the government could reach 350 million litres of biofuel production by 2010. This year the target is 89 million litres at the bottom and 124 million litres at the top. To all intents and purposes, at this stage, we have seen the major oil companies use about 15 million litres of ethanol. It is falling far short of the target. It is completely reprehensible that the oil companies have not done more to meet this target.

I acknowledge that there are some oil majors that have taken steps to address this issue, but I draw to the attention of senators that the agreement at the end of the last year was that these targets would be met. The bulk of the ethanol that is being used out there in the marketplace at the moment is from the independents. United Petroleum has done a terrific job in getting ethanol out there to the marketplace. As I understand it, they were not even part of the agreement with the Prime Minister and the Deputy Prime Minister at the end of last year.

The point of having those discussions and the point of having the targets in place was to ensure that the major oil companies, for the good of this nation, would come to the party and start increasing their use of ethanol—and they are not doing it. As far as I am concerned, if they are not going to meet these voluntary targets, those targets should be mandated. What is the point of having a voluntary agreement if those involved in the agreement are not going to stand up for either side and are not going to meet those targets? It is a complete waste of time to have it in place if they are not going to meet their targets. It is not good enough to say, ‘We’ll meet it in 2008, or we’ll meet it in 2009.’ It is just not good enough. Those targets were put in place to be met this year and they should have been met. They should have been met because it is in the interests of people right across this nation. It is in the interests of all Australians.

The environmental benefits are enormous. There are health benefits in terms of emissions. In particular, as a senator from country New South Wales, the jobs and opportunities that can be created out in the country areas from the development of this industry are tremendous. We talk about creating industries and we talk about creating development out there in the regions. This is one way of doing it: developing that ethanol industry so we can get those jobs and opportunities out there in the regions. Do you know the only thing stopping it at the moment? It is the major oil companies who will not commit to doing it. For years and years they have not put in the effort to take up ethanol and get it out there into the community.

We as the government have recognised the benefits that ethanol puts forward. There is absolutely no doubt about that. When you look at the focus at the moment on climate change and renewable energy, you have to ask: why are we not ensuring that there is more ethanol-blend fuel out there in the marketplace? The way to ensure it is through getting the major oil companies to meet their commitment. At the end of last year they committed to meeting those targets. The percentage of total fuel that that ethanol means to them is negligible. It is a tiny amount compared to the billions of litres of fuel that are consumed in this nation. So why aren’t they doing it? I do not know the answer. They have had years and years. It is not about just these 12 months. Our policy was in place for the 2001 election. They have had years and years to improve their uptake of ethanol and they have not done it.

The government, quite rightly, some time ago announced funding for capital grants to help develop the ethanol industry. That was a terrific initiative, a very good measure. What we are seeing now is that some of those companies that were the recipients of that funding have had to hand it back because they cannot get any certainty because the major oil companies will not enter into contracts and so they cannot get on with their development. To me, that is appalling. It all hinges on the major oil companies’ increased use of ethanol. Why aren’t they doing it? As I travel around the state I have people ask me, ‘Why can’t we get access to ethanol-blended fuel? Why is it not there?’ Years ago there was a scare campaign. It was to scare people away from ethanol. There were signs that said, ‘No ethanol at this service station’. We are finally getting past that. We are finally getting to the point where people out there in the community want to embrace ethanol. They want to use it. They want it in their fuel mix.

So we have this situation where the government wants to see greater use of biofuels. We are doing a lot to make sure that that happens. We had the commitment from the major oil companies at the end of last year that they would work with the government to meet the targets. At the other end of the scale we have the consumers who want to use it. What is in the middle? The major oil companies who will not increase their uptake. Quite frankly, I think 15 million litres is pathetic. It is appalling. Compare that to the situation overseas in Brazil and the US where they are using around 15 billion litres each. Here the major oil companies come up with 15 million litres. Why is that? Is it perhaps that overseas it is regulated—that there is a requirement to do it? What I would like to see is a requirement placed on the major oil companies if they are not going to meet this voluntary target.

What was the point of entering into an agreement at the end of last year? What was the point of getting that commitment if we are now going to say, ‘It’s okay not to meet the commitment. That’s fine. We’ll do it next year. We’ll do it the year after that. That won’t be a problem.’ We need that commitment now. It will continue to get pushed back. We have all these wonderful people around this nation who have terrific ideas for setting up ethanol developments. It is tremendous in terms of regional development. But they cannot get going because there is no certainty. They cannot do it because the major oil companies are not doing enough.

So again I say: the commitment was there last year. The major oil companies and the government agreed on these voluntary targets. I say: what is the point of a voluntary target if it is not going to be met? There was a commitment and it should be met. If those voluntary targets are not going to be reached then there should be a requirement. All it would be doing, if we put a mandate on those targets, is turning the expectation that we had into a requirement.

I cannot be more firm in my belief that this country needs a strong and sustainable biofuels industry. It is for the benefit of people right across this nation. I call on those major oil companies to meet their commitment, and I call on the government to mandate those targets if they do not.