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Media Release
Federal Minister for the Environment and Heritage
The Hon Dr David Kemp, MP

13 May 2003

New Package to Support Uptake of Biofuels


A comprehensive package of Budget measures to support the production and use of biofuels underlines the Howard Government's ongoing commitment to a commercially viable renewable fuels industry for Australia.

The Minister for the Environment and Heritage, Dr David Kemp, said the measures include grants, production assistance, national fuel quality standards and changes to excise arrangements for biofuels.

"Biofuels are produced from renewable organic sources and waste products, including sugar cane, wheat, waste vegetable oils and animal fats. These fuels offer greenhouse, air quality and regional benefits while reducing our dependence on imported fossil fuels," Dr Kemp said.

"This Budget provides a financial incentive for investment, assurance of safety for biofuels users and the encouragement to move to genuinely commercial production," he said. Biofuels with commercial prospects include ethanol and biodiesel.

"This package will address key barriers to the take-up of biofuels and is consistent with the broader fuel excise reform framework," Dr Kemp said.

Dr Kemp said the new arrangements for ethanol include:

"These measures complement the Government's decision last month to set a 10% limit for ethanol blends in petrol, to develop a standard for fuel ethanol, and legislate to require labelling of the ethanol content of petrol - all of which are critical in building consumer confidence in ethanol fuels," Dr Kemp said.

These measures will aid the development of a commercially viable domestic biodiesel industry by addressing critical market barriers to its use, while providing greater certainty with quality.

The new biodiesel arrangements include:

"These measures put biodiesel on a broadly similar footing with ethanol and will ensure each can play a part in a renewable transport fuels industry in Australia," Dr Kemp said.

The effective nett excise rates for both fuels will be set later his year, having regard to energy content and the assessment of environmental and other benefits.

"This package will provide a stable long-term policy climate for investment in biofuels production," Dr Kemp said. "It will also encourage industry to pursue production efficiencies that will enable these fuels to compete in the longer term without the need for government assistance."

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

Commonwealth of Australia