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Posted on  

October 31, 2003

Ethanol delayed till 2006

By Nigel Wilson

THE full-scale introduction of ethanol/petrol blends is likely to be delayed until 2006 because of oil industry pressure.

Deputy Prime Minister John Anderson conceded yesterday that his demand that the fuel industry aim to market at least 80 million litres of fuel ethanol and bio-diesel to Australian consumers by June next year would not be met.

"It is my view that the oil refiners will start adding ethanol from 2006 to petrol to raise octane levels," Mr Anderson said in a statement attacking Labor's plan to remove ethanol production subsidies.

The Australian Biofuels Association said the Government had reneged on its ethanol policy. Executive director Bob Gorgon said Mr Anderson's statement suggested the big oil companies had rebuffed the Government's requirement for 80 million litres of ethanol-based fuels this year.

"The Government's attempt to encourage a renewable fuels industry is in tatters and it appears it is the major oil companies that are dictating policy," he said.

In July this year the federal Government limited ethanol in petrol to a maximum of 10 per cent following claims blends of more than 20 per cent were being sold by independent retailers and could damage engines.

The Government has received a report from Malcolm Irving, appointed earlier this year to "facilitate" the introduction of ethanol, after Labor claimed the policy directly benefited Manildra Group and alleged John Howard had misled parliament over his contacts with Manildra boss Dick Honan.

The industry believes Mr Irving's report points out that consumer confidence in ethanol blends needs to be restored before they can be successfully marketed.

Mr Irving took evidence from oil companies, which argued the Government might be focusing on the wrong end of the petrol chain, with 91 octane unleaded petrol likely to be phased out before the end of the decade.

They said 95 octane would become the standard fuel as the Australian automotive industry introduced cars with more efficient, high-compression engines.


 

 

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