Biofuels Sales Obligation

In February 2007 the Government of New Zealand announced a Biofuels Sales Obligation, requiring biofuels to be introduced into the New Zealand fuels market. The Biofuel Bill was passed through Parliament on 3 September 2008, and the sales obligation was to take effect on 1 October 2008. The Biofuels Sales Obligation required all oil companies to supply biofuels as a fixed percentage of their total sales. Under the Obligation biofuels would have to make up 0.5% of oil companies sales in the first year of the scheme, 2008, with obligation levels rising by 0.5% increments to 2.5% in 2012.

The bill contained sustainability principles to make sure biofuels sold towards the obligation will: emit significantly less greenhouse gas over their life-cycle than fossil fuels, avoid negative impacts on food production and not reduce indigenous biodiversity or adversely affect land with high conservation values. Decisions about which type of biofuel is supplied, how much of it is blended with fossil fuels and where it comes from were to be up to the industry. On 17 December 2008, the Parliament approved a repeal bill, revoking the biofuel obligation. It was determined that the biofuel industry in New Zealand was not yet large enough for the obligation to meet from domestic sources, and would need to rely on imports. The Ministry of Business Innovation and Employment will still continue to work on developing sustainability standards for biofuels.

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