State to decide on mandatory biofuel target

Submissions to an inquiry by Victoria’s Economic Development and Infrastructure Committee have raised questions about ethanol and biofuel production levels and secondary effects. The committee will make a recommendation to the State Government in March on a mandatory biofuel target. It is deciding between a target of 5% by 2010 or 10% by 2015. Opponents of the scheme include the Australian Lot Feeders Association which believes that mandated ethanol-blended fuel would lead to higher grain prices. Ford Australia also rejects mandatory targets, citing efficiency and equity grounds, and warns that demand for biofuels could give rise to further water use and irrigation issues. Supporters of ethanol use include the Manildra Group and the Victor Smorgon Group, both of which have made submissions to the inquiry. According to Manildra, increased ethanol use would cut Australia’s dependence on imported oil products, reduce the trade deficit and increase employment in rural areas. (September 26, 2007)