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Federal Minister for the Environment and Heritage
The Hon Dr David Kemp, MP
Tuesday 17, December 2002
The Cabinet has considered at its meeting in the last two days the matter of ethanol in petrol. The Federal Government is very strongly of the view that consumers have a right to know the nature of the ethanol blend, in any petrol that they may be buying. The power to require labelling to inform consumers about ethanol in petrol lies with the States. The principle issue with ethanol in petrol seems to have arisen here in New South Wales where E-20 blends have been on sale since 1994.
I'll be writing to all the States and particularly to New South Wales asking them to immediately require the labelling of petrol at the pump so that consumers know the amount of ethanol in the petrol they're buying. The States have this power to make it under their fair trading laws. The Commonwealth Government doesn't have this power. If the States fail to act the Commonwealth will legislate when parliament resumes in February to ensure that proper labelling is provided to consumers but the opportunity and the obligation to make sure that consumers are properly informed over the summer period lies with the State Governments and I'll be writing to the State Governments to request that they do so.
I want to make the point that in Queensland there is already effective labelling of ethanol in petrol where E-10 blends are on sale. In South Australia all additives in petrol are banned so consumers already know what the ethanol content is. The Queensland Government has acted responsibly in this matter, the E-10 blends on sale in Queensland are properly and voluntarily labelled. The vast bulk of the petrol with ethanol at blends above 10% on sale to the public is being sold here in Sydney. It's been on sale in Sydney since 1994, this is a matter that consumers are entitled to know about.
I also want to make the point that some preliminary results from the Commonwealth's own testing show that at both E-10 and E-20 blends of ethanol in petrol there can be some operability impacts on small engines particularly those for outboard motors. These blends, both E-10 and E-20, can lead to stalling in both when the throttle is opened suddenly and this can have safety consequences. This is another reason why labelling is essential so that customers know when they go to the pump that they're buying a fuel which is suitable for the purpose for which their purchasing it. If the States do not move immediately to institute this labelling the Commonwealth Government will introduce legislation when parliament resumes to give it the power to require all petrol retailers to label the ethanol content of their petrol at the pump.
The State Government says that when (inaudible)
Well the States can't be allowed to walk away from their responsibility.
They say it's your responsibility.
The only power to inform consumers about the amount of ethanol in petrol is at the present time lies with the States. It is the States responsibility to make sure that consumers know that when they buy petrol at the pump it does or it does not contain ethanol and it contains ethanol at a certain level so they can determine whether or not this is a suitable fuel for the purpose for which they're buying it.
The Federal Government - and it's my responsibility as Minister to make sure that any Federal fuel standard is based on proper scientific evidence. The Cabinet has reviewed all the evidence available and has concluded that at least with blends between 10 and 20% the evidence is still vague and inclusive and that further testing is required but there is no reason why consumers need to be left in any doubt as to whether there is ethanol in the petrol they're buying and what the level of ethanol (inaudible). They can be told immediately by proper labelling at the pump. The power to require that labelling lies with the States. I'll be writing to the States asking them to exercise that power immediately so that motorists can have full confidence over the summer period that they know whether there is ethanol in the petrol they are buying and at what level that ethanol is being blended. If the States fail to act the Commonwealth will legislate.
In relation to small outboard motors blends of both E-10 and E-20 do pose some problem for operation of the engines. When the throttle is opened quickly the engine can stall (inaudible) why there should be precautionary labelling of petrol at the pump now.
But some major car manufacturers say that (inaudible).
Well there's another very good reason why there should be labelling at the pump because if motor vehicle manufacturers are saying that warranties may be called into question by blends with ethanol higher than E-10 then motorists are entitled to know whether they are buying the blend at E-10 or at a higher concentration of ethanol.
So has the Government considered (inaudible)
The Government is looking at the issue of setting a national standard. It acquired this power last year. That standard, when it is announced, will be based on proper scientific evidence. But there's no reason at all why consumers should be left in any doubt at the moment about the ethanol in the petrol they're buying.
I certainly expect some fines. This will be a matter of law and the law at present is in the hands of the States to exercise and they should exercise that now.
As soon as possible.
Well, if it's not in place over the summer then the Commonwealth will be forced to legislate when parliament resumes and the Commonwealth will exercise that power to protect consumers but I expect the states to exercise the power they have under the fair-trading laws to protect consumers immediately.
No, we don't have power to legislate in this area. That's why I'm now making this call. We have got evidence as a result of our testing that the operation of small motors may be affected by both E-10 and E-20 blends and that's why - one of the good reasons why - there should be labelling by the States now. Also, of course, car manufacturers have made these statements about their warranties and again that is a very strong reason why consumers should know whether they are buying petrol at an E-10 concentration of ethanol or at a higher-level.
Well ethanol is an additive to petrol, which can have some benefit to air quality. It is marketed as a clean fuel. I don't think anybody argues that at the E-10 concentration there is no issue arising with the use of ethanol. Claims have been made in relation to the blend of E-10 and E-20. The scientific evidence does not support at the moment any particular conclusions about that and I remind you that blends at E-20 have been (inaudible) that can be of concern to consumers. That's the view of the car manufacturers. There have been claims about blends higher than E-10, the fact however needs to be put on the record that (inaudible). Nevertheless the Federal Government is examining these claims to see if there is a basis for them but until that time consumers are entitled to know what the concentration of ethanol may be in the fuel they're buying and indeed whether that contains ethanol at all.
Yes there's no surprise in Canada's ratification of the Kyoto Protocol. That's been the Canadian position all along. They are in a very different situation to Australia. That's their national decision taken in their national interest. It's the Government's very firm view that it is not in Australia's national interest to ratify the Kyoto Protocol at the present time because it does not contain any pathway or the involvement of developing countries who are going to be the major emitters over the next decade.
The great weakness of Kyoto is that it does not cover 75% of global emissions. It doesn't place any obligations on developing countries to reduce their emissions and they are the countries with whom Australian is in competition for long-term investment. So Australia is in a part of the world where virtually none of our major competitors are ratifying and we are not prepared to shift Australian jobs and Australian industries overseas by an unwise ratification against the national interest. Having said that, I also want to make the point that Australia has decided that it is going to reach its target negotiated at Kyoto. We do need to reduce Greenhouse gas emissions, we negotiated a target that we are satisfied with and we'll be reducing our Greenhouse gas emissions in order to meet that target over the next few years into the period around 2010.