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Media Release
Minister for the Environment and Heritage
Dr David Kemp

11 April 2003

Federal Government to Set 10 Per Cent Ethanol Limit

The Federal Government will move to set a 10 per cent limit for the blend of ethanol in petrol, while tests on the effects of higher blends on vehicles continue, the Minister for the Environment, Dr David Kemp, announced today.

The decision follows initial results of tests on vehicle engines that suggest blends of 20 per cent are not suitable for a portion of Australia's fleet.

"These blends have been on sale in NSW since 1994 but, unlike other States, the Carr government has taken no action either to regulate their use or to require labelling at the petrol bowser," Dr Kemp said. "The Commonwealth assumed responsibility for national fuel standards in 2000 and is determined to address this issue."

Last December, Dr Kemp called on State Governments to use their power to require labelling of ethanol blends at the petrol pump, but most failed to respond.

"A 10 per cent limit on ethanol blends, combined with mandatory Commonwealth labelling of ethanol blends, will restore confidence in the use of ethanol blends among consumers and industry," Dr Kemp said.

"The ethanol industry can now proceed with certainty, while motorists will be fully informed of the content of their petrol.

"Ethanol is a renewable energy source which may be added to petrol as an octane enhancer, and has some air quality benefits which have been confirmed by the Commonwealth's testing. Ten per cent ethanol is used around the world and is widely accepted as causing no damage or operability problems in vehicle engines."

Dr Kemp said the Commonwealth would also proceed with amendments to the Fuel Quality Standards Act 2000 to allow it to require labelling of ethanol blends.

"Consumers have a right to know whether the petrol they are buying contains ethanol and the nature of the blend, which is why the Commonwealth has responded to inaction by the States with the introduction of mandatory labelling," he said.

Dr Kemp said a Literature Review of existing knowledge on the subject last year had concluded that the information so far is 'vague' and 'conflicting', 'leaving the only valid conclusion that testing is required to obtain data to form a view'.

"We have therefore been closely monitoring results of my Department's vehicle testing program as they become available, and the Government is now in a better position to make a decision," he said.

"Latest results provide evidence that ethanol blends higher than 20 per cent would cause problems for a proportion of older vehicles in the fleet."

The testing found that 20 per cent ethanol could cause hesitation and problems with starting in very cold conditions, and could cause deterioration of metal, plastic and rubber components in some older vehicles. Newer vehicles did not demonstrate problems with 20 per cent ethanol, although durability testing will not be complete until mid 2004.

"The major automobile manufacturers have advised my Department that they accept the use of 10 per cent ethanol blends and that such blends will not affect vehicle warranties," said Dr Kemp.

However preliminary testing with one type of marine two-stroke engine by the Commonwealth Government has revealed that stalling may occur when the throttle is opened from low speed with higher ethanol blends, creating a possible safety hazard. Even with a 10 per cent blend some effects on parts and operation were detected, and a number of marine and other two stroke motor manufacturers advise against use of even low ethanol blends. Ethanol blends should never be used in aircraft.

"This reaffirms the need for labelling, even with a cap of 10 per cent on ethanol blends," Dr Kemp said.

Further vehicle tests will provide information on the full effects of 20 per cent ethanol on newer vehicles in the fleet.

The Government is making available the information it has obtained so far on the effects of ethanol blends on engines so that the facts are on the public record. The reports are available at

Under the Fuel Quality Standards Act a fuel standard can only be varied after the Minister for the Environment considers advice from the Fuel Standards Consultative Committee.

"I will propose to the Committee immediately that the standard for petrol be varied to place a 10 per cent limit on ethanol, and request an urgent response," Dr Kemp said. "Given their familiarity with the issues and awareness of the Commonwealth's testing program, I do not expect any significant delay in receiving their advice.

"We now have a framework that will deliver certainty for consumers that they can use ethanol safely. We know ethanol can reduce air pollution, we know it can add jobs in regional Australia.

"The Government will announce its long term arrangements for supporting ethanol and other biofuels in the Budget.

"I urge oil majors, the car companies and the motoring organisations to assure motorists that ethanol is a safe, renewable fuel."

Media Contact:
Catherine Job Dr Kemp's office (02) 6277 7640 or 0408 648 400

Commonwealth of Australia