Background

5. With the introduction of biofuels and biofuel blends into the New Zealand fuel mix it is necessary that appropriate regulated specifications and labelling requirements are in place for biodiesel and ethanol. This will help to build and maintain consumer confidence in the quality of biofuels and ensure that compliant fuel is suitable for our vehicle fleet and other fuel users.

6. Petrol and diesel quality in New Zealand is regulated by the Petroleum Products Specifications Regulations 2002 (PPSR) made under the Energy (Fuels, Levies and References) Act 1989. Specifications for biodiesel, biodiesel blends and ethanol are not currently regulated. Cabinet agreed in February 2007 (CAB Min (07) 4/2 refers) that the current regulatory regime for fuel specifications, quality, fuel dispensing equipment, testing, consumer information, and advertising be amended or replaced, as appropriate, to provide for the suitable regulation of fuels used in engines, including biofuels, biofuel blends and synthetic fuels, including its suitable enforcement and provision for standards to be incorporated by reference where appropriate.

7. This paper uses the conventional nomenclature for describing biofuel blends, i.e. B100 is 100% biodiesel and B5 is a blend of 5% biodiesel and 95% petroleum diesel. Likewise, E100 is 100% ethanol and E10 is a blend of 10% ethanol and 90% petrol.

8. The discussion document 'Regulating Biofuel Quality – A discussion document outlining the proposed biodiesel and ethanol specifications' was publicly released in October 2007 and twenty seven submissions were received. Submitters were re-consulted on the final proposals in January 2008 to provide an opportunity for additional comments. All submitters agree that biodiesel and ethanol specifications should be regulated.