Biofuels boost while Clean Car Package ‘revs up’

The Government will introduce a Sustainable Biofuels Mandate to help reduce greenhouse gas emissions in the transport sector, energy and resources minister Megan Woods says.

From April 1, 2023, fuel wholesalers will be required to cut the total greenhouse gas emissions for transport fuels they sell by a set percentage each year, by deploying biofuels as a part of their fuel supply.

“Liquid biofuels are a renewable, low-emissions fuel source that can be immediately used to reduce our transport sector emissions while the rest of our Clean Car Package revs up,” transport minister Michael Wood explains.

The Clean Car Package aims to reduce millions of tonnes of emissions from the vehicle fleet and includes rebates for electric and plug-in hybrid vehicles with up to $8625 for new vehicles and $3450 for used.

Other EV incentives include EV chargers now available every 75km along most state highways, having nearly four times the funding in the Low Emission Transport Fund (LETF) by 2023, an Electric Vehicle Buyers Guide, a Clean Car Sector Leadership Group to help increase uptake, extending the light EV road user charges exemption to April 2024 (saving owners around $800 annually), and the Clean Car Import Standard so more climate-friendly cars are available and giving families average lifetime fuel savings of nearly $7000 per vehicle.

“We need to transition to low-emission vehicles, and biofuels will help reduce emissions while we make that transition. Biofuels have the potential to boost economic recovery through encouraging a local industry and creating jobs,” Michael Wood adds.

“We’re committing to develop a separate mandate for aviation fuel during 2022 given the unique challenges the sector faces. The Ministry of Business, Innovation and Employment is working with Air New Zealand on a feasibility study on the potential for domestic production of sustainable aviation fuel and this will feed into that work.”

Megan Woods says the Sustainable Biofuels Mandate will prevent about one million tonnes of emissions from cars, trucks, trains and ships over the next three years and up to 10 million tonnes by 2035 to help New Zealand meet climate commitments.

“Land transport accounts for almost half of all of our national carbon dioxide emissions and we need to take action to start to mitigate transport’s impact on climate change,” she says.

“Biofuels mandates are common overseas with more than 60 jurisdictions having them; we had one on the cards more than a decade ago but it was repealed before it came into effect.

“We know there’s more to do and we’re continuing to look at what else we can do to reduce emissions in the Emissions Reduction Plan which we will release in May.”

From April 1, 2023, fuel wholesalers are expected to reach a starting emissions reduction target of 1.2%, which will increase to 2.4% in 2024 and to 3.5% in 2025.

Strict sustainability and emissions reporting requirements will be introduced to prevent any adverse environmental outcomes and ensure emissions reductions are genuine.

Provisional targets for 2026-2030 will be confirmed by Cabinet in 2024 and the provisional targets for 2031-2035 in 2029. The mandate will be reviewed after two years.

More information can be found on the MBIE website.