New Zealand’s biofuels producers face an uncertain future

Five or six bio-fuels producers from New Zealand are facing an uncertain future, according to the Bio-Energy Association of New Zealand (BANZ). The producers, who are currently manufacturing biofuels from used cooking oil, canola oil and tallow, are in danger of losing government subsidies because the NZ$36 million (US$29.4 million) set aside to help local biofuels producers have not been fully spent. Because of this, BANZ says it could lose the funding which could lead to the closure of several biofuels producers. Brian Cox, executive director of BANZ, said that the low uptake resulted in total payouts of only NZ$488,000 (US$399,476) during the last six months of 2011, from the year’s budget of NZ$15 million (US$12.2 million) . He said that the scheme had been in doubt since it was established after the 2009 general election by the incoming National-led government which removed Labor’s biofuels obligation and instead set aside NZ$36 million (US$29.4 million) to subsidize biofuels for three years. Around 1.5 million liters of biofuels, or the equivalent of only 0.1% of the total transport fuels, had been sold under the scheme. BANZ said that another 500,000 liters was provided by small-scale manufacturers who continue to struggle to meet the scheme’s minimum monthly production requirement of 10,000 liters. The scheme is scheduled to end on June 30 this year and Cox is advocating for an extension of the scheme and a gradual phase out later on. He said that if the government does not extend the scheme, it would send the wrong signals regarding its seriousness in realizing a post-carbon world. (February 22, 2012)