NSW Government Introduces Bill To Broaden Ethanol Sales Mandate
Thursday 17 March 2016 @ 12.04 p.m. | Legal Research | Trade & Commerce
NSW Minister for Innovation and Better Regulation, Victor Dominello, has introduced a Bill into Parliament to extend the ethanol mandate across NSW so that more retailers must comply with minimum ethanol requirements and provide sales reports on volumes sold. The Biofuels Amendment Bill 2016 was introduced into the Legislative Assembly on 16 March 2016.
Introducing the Bill into Parliament, Mr Dominello referenced the controversial nature of the Bill, saying:
“Debate about the merits of ethanol-blended fuel is nothing new. Government intervention in a free market is never desirable. I understand why, philosophically, it creates unease among some members of this House, but we must recognise that we do not live in a free market utopia…
The reality is that governments regularly intervene in the market to protect consumers against unchecked market forces. That is why we have agencies such as Fair Trading, the Australian Competition and Consumer Commission, the Australian Prudential Regulation Authority, the Energy and Water Ombudsman, and the State Insurance Regulation Authority, amongst many others. Let me be very clear: My focus is squarely on the consumer interest. I am unashamedly wearing my hat as Minister responsible for consumer affairs in pursuing these reforms. It is important that E10 is a competitively priced product and that price is reflected at the bowser. It is important that consumers be given a choice between El0, regular unleaded and premium fuels. It is important that we have more transparency in the market, including real-time prices available online, and transparency on the true cost of ethanol production and it is passed through to the bowser. It is important that we encourage a viable and competitive homegrown biofuels industry. This is what this bill seeks to do.”
Key Details
The Bill would amend section 4A of the Biofuels Act 2007 (NSW) to change the Act’s application from “major retailers” (currently applying to a person who operates or controls more than 20 service stations” to “volume fuel retailers”. The new definition would apply to both previous “major retailers” and to service stations selling 3 or more types of petrol or diesel fuel, who sell an amount of petrol that exceeds a threshold to be prescribed by regulation. In his second reading speech, Mr Dominello noted that setting the threshold by regulation would allow him to use the regulatory impact statement process to engage in “meaningful consultation with the industry” to decide how to set this level, and noted:
“The threshold will be set to target the majors, not small businesses. I have listened extensively to the community and understand that for mum-and-dad operators, many in regional areas, complying with the mandate is often not possible.”
The Bill also removes some of the obligations of wholesalers to transition to regulation of retail sales. Wholesalers will still have to comply with registration, returns and records requirements.
The Bill also includes a new offence of “failure to comply with minimum biofuel requirements”, with a first offence carrying a maximum penalty of 500 penalty units (currently up to $55 000), with subsequent offences carrying a maximum penalty of 5000 penalty units (up to $550 000). The provision also contains a list of statutory defences, including if the defendant can prove it was no economically viable to comply with the requirement.
The Minister will also be able to grant exemptions from the minimum biofuel requirements.
While Mr Dominello indicated in his speech that ethanol mandates had in the past had bipartisan support, the Sydney Morning Herald has published an article claiming that Liberal MLC Peter Phelps has threatened to not support the legislation in the upper house. The article also states that the Australasian Convenience and Petroleum Marketers Association do not support the measures, saying that petrol prices could increase by as much as 8c a litre.
The Bill is currently being considered by the NSW Legislative Assembly.
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Sources:
Biofuels Amendment Bill 2016, Explanatory Notes and Second Reading Speech - available from TimeBase's LawOne Service
