Recommendations

65. It is recommended that the Committee:

1. Note that Cabinet agreed in February 2007 that the current regulatory regime for fuel specifications, quality, fuel dispensing equipment, and testing 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 (CAB Min (07) 4/2 refers).
2. Note that all fuel for retail sale will continue to be required to be ‘fit for common purposes'.
3. Note that there will be less stringent requirements for biofuels and biofuel blends not for retail sale.

Biodiesel (B100) specifications

4. Agree that the biodiesel specifications set out in Annex 1 apply to all biodiesel supplied in New Zealand, either as a final fuel or as a blending component with petroleum diesel, intended for use in diesel engines, and that:

   4.1 Minimum oxidation stability is 10.0 hours induction period when biodiesel is used as a blending component with petroleum diesel for retail sale only.

   
   

   4.2 All biodiesel is required to meet a maximum iodine value of 140g iodine/100g.

   
   

   4.3 Minimum cetane number is 47 when biodiesel is used as a blending component with petroleum diesel for all biodiesel blends.

   
   

   4.4 Allowable viscosity is 2.0 – 5.0 mm²/s for biodiesel as a final fuel, and 2.0 – 6.0 mm²/s for biodiesel used as a blending component with petroleum diesel for all biodiesel blends.

   
   
5. Note the biodiesel specifications recommended will allow for the supply of good quality biodiesel from a number of feedstocks, including tallow, rapeseed, palm, soybean, coconut and used cooking oil.



Non-retail biodiesel blend specifications

6. Agree that diesel/biodiesel blends for non-retail sale may contain any proportion of biodiesel, and must meet the limits for cetane number, colour, lubricity, sulphur, viscosity, particulates and flash point as in Schedule 3 of the Petroleum Products Specifications Regulations (PPSR). In addition, non-retail diesel/biodiesel blends must also comply with the following limits (where X is the percentage by volume of biodiesel in the blend):

   6.1 Acid value maximum of 0.1 + 100*X/250 mg KOH/g, when measured by ASTM D664.

   
   

   6.2 Water content maximum of 200 + 300*X mg/kg, when measured by IP 438.

   Schedule 3 of the PPSR (retail diesel specifications)

7. Agree that diesel/biodiesel blends for retail sale must meet the requirements for retail petroleum diesel in Schedule 3 of the PPSR.
8. Agree that the following amendments be made to Schedule 3 of the PPSR:

   8.1 Maximum biodiesel content is 5% by volume when tested by EN 14078, and that this must meet the biodiesel (B100) specifications.

   
   

   8.2 The test method for particulates to be amended from ASTM D6217 to IP 440.

   
   

   8.3 The addition of ASTM D6890 as an alternative test method for cetane number.

   
   

   8.4 The test method for water content to be amended from ASTM D6304 to IP 438.

   
   

   8.5 Cloud point for summer to be amended from +4ºC to +6ºC for Auckland and Northland.

   
   

   Ethanol and petrol/ethanol blends

9. Note that petrol/ethanol blends are already provided for in the PPSR, with up to 10% ethanol by volume permitted in petrol.
10. Note that the PPSR do not currently provide specifications for the ethanol component of a petrol/ethanol blend.
11. Agree that ethanol used as a blending component with petrol must meet the specifications set out in Annex 2, including that:
    
    

    11.1 The ethanol specifications provided in the PPSR be for denatured ethanol; and

    
    

    11.2 Ethanol must contain corrosion inhibitor.

    
    

    Biofuel blend labelling requirements

12. Note that Cabinet agreed that labelling requirements for biofuel blends be set out in regulations, with appropriate offence and penalty provisions, and that such labelling requirements will include that biofuel blends must be labelled as containing biofuel if the blend comprises by volume more than five per cent biodiesel or more than one per cent ethanol (CAB Min (07) 4/2 refers).
13. Agree that retail containers or pumps dispensing petrol/ethanol blends of more than 1% ethanol by volume must be labelled as follows:
    
    

    13.1 The maximum percentage of ethanol by volume must be clearly displayed; and

    
    

    13.2 The words "May not be suitable for all vehicles/engines. Check with the manufacturer before use" must be displayed.

    
    

    Next Steps

14. Invite the Associate Minister of Energy to issue drafting instructions to the Parliamentary Counsel Office to amend the PPSR to give effect to the decisions referred to in the Recommendations above.
15. Note that the Associate Minister of Energy intends to issue a press statement announcing the agreed biofuel specifications and labelling requirements and will make this Cabinet paper publicly available.
16. Agree that the Associate Minister of Energy have the power to approve any minor changes to the agreed biofuel specifications.
17. Note that it is intended that the biofuel specifications be reviewed by 2010.