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2016-2017
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
RENEWABLE FUEL BILL 2017
EXPLANATORY MEMORANDUM
and
STATEMENT OF COMPATABILITY WITH HUMAN RIGHTS
Circulated by the authority of
Hon Bob Katter MP
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Renewable Fuel Bill 2017
OUTLINE
This Bill aims to provide for the regulation of renewable fuel content in petrol at the bowser
and stipulates that the ethanol or other renewable fuels volume percentage be mandated at
5% minimum from 1 July 2019 and 10% minimum from 1 July 2022.
The Bill provides a regulatory regime for the inclusion of cellulosic biomass ethanol and
other renewable fuels, in fuel supplied for use in motor vehicles in Australia. It also
establishes an office of Renewable Fuel Program Administrator and outlines the functions of
the office.
The implementation of a renewable fuels mandate will:
1. reduce motor vehicle emissions and associated costs to health;
2. diversify the grain, wheat and sugar industries whilst creating thousands of extra
jobs in regional Australia;
3. increase Australia's self-sufficiency in fuel and food; and
4. ultimately deliver cheaper petrol and electricity.
Ethanol-blended unleaded petrol is a cleaner and healthier fuel than unleaded petrol (ULP)
alone. The NSW Department of Health estimated that almost three times more people die
(up to 1400 deaths) from exposure to vehicle exhaust-pollution than from road accidents. It
is estimated that the cost to taxpayers, of health impacts associated with this pollution, is
between $2billion and $3 billion annually, in Sydney alone. Additionally, particulate
emissions (along with other toxins) have been linked to health problems relating to air
pollution.
Australia has grown increasingly reliant on oil imports, with a continued growth in domestic
oil demand and a declining rate of domestic oil production. The Australia petroleum
industry's total fuel trade deficit has increased exponentially, from -$600 million in 2001 to
-$25 billion in 2015. Net oil imports have increased from 12,000 BPD (barrels per day) in
2000, to 633,000 BPD in 2015. This raises significant concerns over cost and energy security.
Our growing dependence on imported oil leaves Australia vulnerable to potential
disruptions, in the case of political instability or conflict in major oil-producing regions
globally (and Australia is reportedly the only member of the International Energy Agency
that does not stockpile the equivalent of 90 days net imports of oil). Given the vast size of
the Australian continent; our geographic isolation; our reliance on transport fuels; and the
closure of oil refineries in Australia, the implementation of an ethanol mandate is critical for
Australia's fuel production and consumption security.
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Australia is one of few countries on the globe - from Europe to Asia and the Americas - to
not mandate a volume of biofuels. The United States of America mandate a 10% ethanol
volume content; Brazil has a 25% ethanol mandate; the United Kingdom has a 5% biofuel
mandate; Ethiopia has a 10% ethanol mandate; France has a 7% ethanol mandate; China
has a 10% ethanol mandate. Many African countries also have a 10% mandate.
In Australia, New South Wales has mandated ethanol content in petrol at 6% and
Queensland has recently mandated ethanol content in petrol at 3%, increasing to 4% from
July 2018.
The conversion of sugar mills to ethanol producers will significantly enhance the sugar
industry, an economic backbone for many regional and rural towns in Australia. This
guarantees a long-term market price and income stream from electricity (via the mill
conversions from being incinerators of sugar cane fibre to electricity producers). Ultimately,
this will provide cheaper electricity and cheaper petrol for Australians.
FINANCIAL IMPACT STATEMENT
The Bill establishes a new office, the office of Renewable Fuel Program Administrator, to be
paid out of normal budget supply.
STATEMENT ON COMPATIBILITY WITH HUMAN RIGHTS
The Statement of Compatibility with Human Rights appears at the end of this Explanatory
Memorandum.
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NOTES ON CLAUSES
Clause 1 - Short Title
This is a formal provision specifying the short title.
Clause 2 - Commencement
This is a formal provision which sets out the commencement dates of the Bill. Clauses 1 to 3
commence the day after the Bill receives Royal Assent. Schedule 1 is to commence on a
date fixed by Proclamation.
Clause 3 - Schedule(s)
This Bill provides that each Act, and each set of regulations, that is specified in a Schedule to
this Act is amended or repealed as set out in the applicable items in the Schedule
concerned, and any other item in a Schedule to this Act has the effect according to its terms.
Schedule 1 - Amendments
Fuel Quality Standards Act 2000
Item 1
This item adds a new section after Part 2 of the Fuel Quality Standards Act 2000.
Part 2A - Renewable Fuel
Division 1 - Preliminary
This item adds a new section 36A, which provides an overview of this Part. It provides that
this section sets out a regulatory regime in relation to the inclusion of cellulosic biomass
ethanol and other renewable fuel in fuel supplied for use in motor vehicles in Australia. It
also specifies that Division 2 establishes an office of Renewable Fuel Program Administrator
and outlines the functions of the office. Division 3 deals with the requirements for the
inclusion of cellulosic biomass ethanol or other renewable fuel and additionally, Division 4
deals with reporting requirements.
Section 36B sets out the definitions in the Bill.
Division 2 - Renewable Fuel Program Administrator
Item 36C appoints a Renewable Fuel Program Administrator, which the Minister must
appoint within 6 months of the commencement of the Bill. The Renewable Fuel Program
Administrator, must be appointed for a period of 5 years, and may be re-appointed.
Item 36D provides for the functions of the Renewable Fuel Program Administrator. This
includes:
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Overseeing the operation of the requirements of this Part including enforcement of
the Renewable Fuel Program;
Approval of prices to be paid to each of the producers and processors in the
cellulosic biomass ethanol production and marketing chain;
Approval, by legislation of the composition and source of blends of renewable and
fossil fuel; and
Issuing and approving the sale, transfer of use of renewable fuel credits under
section 36H.
Division 3 - Renewable Fuel Program
Section 36E provides for the supply of motor vehicle fuel. It outlines that a person commits
an offence if;
The person supplies motor vehicle fuel in Australia that is subject to regulations
made under section 36F or 36J; and
The person is a constitutional corporation or a Commonwealth entity or the person
supplies the fuel in the course of constitutional trade or commerce; and
The motor vehicle fuel does not comply with the regulations; and
The supply is not in order to comply with discretion or order under an emergency
law.
The penalty for the offence is 10,000 penalty units. This does not apply if a person believes
that on reasonable grounds that the motor vehicle fuel that is supplied will be further
processed for the purpose of bringing fuel into compliance with regulations.
Section 36F provides for the requirements for renewable fuel. The volume percentage of
cellulosic biomass ethanol or other renewable fuel which is to be included in motor vehicle
fuel supplied for use in Australia is prescribed by the regulations and is to commence within
one year from the date of commencement of this Part. The regulations must include
provision for the required volume percentage to be at least 5% from 1 July 2019, at least
10% from 1 July 2022.
Additionally incentives will be included in the regulations, if percentage targets above and
beyond the minimum targets are reached. Further details of how the percentage required is
to be measured and applied by any person involved in the production or dispensing of
motor vehicle fuel is to be prescribed in the regulations.
Section 36G outlines that before the Governor General makes a regulation under section
36F, the Minister must take into consideration;
the available supply of cellulosic biomass ethanol and other renewable fuels;
any potential unfair effect on existing refineries;
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any seasonal variations in the use of renewable fuels; and
the report, including any recommendations, of the Administrator prepared under
section 36L or any other recommendations of the Administrator.
The Minister must also be satisfied that the Reid Vapour Pressure of the motor vehicle fuel
will be at an acceptable level and, if appropriate, alternative blending, storage or other
arrangements may be included in the regulations.
Section 36H outlines renewable fuel credits. It provides that refineries, blenders or
importers of motor vehicle fuel may be given credits for the production or sale of motor
vehicle fuel that contains a quantity of renewable fuel greater than the quantity required by
the regulations in effect at the time of production, importation or sale. Credits received in a
financial year may be counted in assessing compliance with section 36F or 36J of the Bill
applying in the following financial year or other period prescribed in the regulations. Credits
may also be sold or transferred to another person. It also provides that regulations may
provide that the receipt or purchase of credits can be used to offset a failure to comply with
a requirement which occurred in a previous year.
Section 36J outlines that regulations may specify a different volume percentage of
renewable fuel to apply in respect of supplies of motor vehicle fuel in specified areas of
Australia. However, they must not give preference to one State or part of a State and must
not have an effect equivalent to a value of more than 2% of the annual motor vehicle fuel
sales in Australia. Before the Governor General makes a regulation under subsection (1), the
Minister must consult with the Renewable Fuel Program Administrator and be satisfied that
the variation is necessary as a remedy for hardship or similar special circumstances.
Section 36K provides that supplies of motor vehicle fuel is to be accompanied by
documentation if;
a person (the supplier) supplies motor vehicle fuel in Australia to another person and
the fuel is subject to regulations under section 36F or 36J;
the supplier is a constitutional corporation or a Commonwealth entity or the supplier
supplies the motor vehicle fuel in the course of constitutional trade or commerce;
and
the other person is not the end user of the motor vehicle fuel; the supplier must,
within the period prescribed by the regulations, provide the other person with a
document or documents containing a statement as to whether or not the motor
vehicle fuel complies with the regulations and any other information relevant
information relating to the motor vehicle fuel.
The supplier commits an offence if the supplier fails to comply with this section. The penalty
is 60 penalty units.
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Division 4 - Record keeping and reports
Section 36L provides that within 6 months of the commencement of this Part, the
Renewable Fuel Program Administrator must provide a report on the motor vehicle fuel
market in Australia including any likely adverse impact on consumers and an evaluation of
the renewable fuel supplies, prices, blendstock supplies, supply and distribution capabilities.
It also provides that the Minister must have regard for the report, including any
recommendations made by the Renewable Fuel Program Administrator.
Section 36M provides that the Renewable Fuel Program Administrator must, as soon as
practicable after the end of each financial year (commencing after 30 June 2017) provide
the Minister with a report setting out for each State and Territory the market share of fuel
containing ethanol, containing renewable fuel and any other matters. The Minister must
provide a copy of the report to the Parliament, within 15 sitting days of receiving the report.
Section 36N outlines record keeping. A person must keep and maintain records in relation to
the supply if;
A person supplies motor vehicle fuel in Australia that is subject of regulations under
section 36F and 36J; and
The person is a constitutional corporation or a Commonwealth entity or the person
supplies the fuel in the course of constitutional trade or commerce.
A person commits an offence if the person fails to comply with this section. The penalty is
60 penalty units.
Section 36P provides for annual statements. Producers must supply an annual statement for
the year, if a person produces and supplies motor vehicle fuel in Australia and the fuel is
subject to regulations under section 36F or 36J and the person is a constitutional
corporation or a Commonwealth entity or the person supplies the fuel in the course of
constitutional trade or commerce. Importers must supply an annual statement for the year,
if the person imports motor vehicle fuel into Australia and supplies the fuel in Australia and
the fuel is subject to regulations under section 36F or 36J. The annual statements must be
provided on or before 14 February in the following year or a date set by the Renewable Fuel
Program Administrator. The content of the statement must be in a form (electronic
included) and contain any information required by the Renewable Fuel Program
Administrator. A person commits an offence if the person fails to comply with these
requirements. The penalty is 60 penalty units.
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Item 2
This item inserts a new subsection (1A) after section 72 (1) of the Fuel Quality Standards Act
2000, that a review conducted before the second anniversary of Part 2A of this Bill does not
need to include the operation of Part 2A.
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Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
RENEWABLE FUEL BILL 2017
This Bill is compatible with the human rights and freedoms recognised or declared in the
international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011.
Overview of the Bill
This Bill aims to provide for the regulation of renewable fuel content in petrol at the bowser
and includes that the ethanol volume percentage be mandated at 5% minimum from 1 July
2019 and 10% minimum from 1 July 2022.
Human rights implications
This Bill does not engage any of the applicable rights or freedoms.
Conclusion
This Bill is compatible with human rights as it does not raise any human rights issues.
Hon Bob Katter MP
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