It’s Political

WHAT THE POLITICIANS THINK ABOUT TRUCKING

THE NEW ZEALAND TRUCKING INDUSTRY FACES many challenges – many of them influenced by Government policy.

Apart from the many problems currently created by the COVID-19 pandemic, there’s the ongoing driver shortage, the worsening state of the nation’s roading network and looming emissions reduction legislation…

So, who among our political parties offers any salvation for the industry in these situations?

To have some insight into what politicians are thinking about issues impacting the road transport industry, NZ Truck & Driver has offered each of the major political parties the opportunity to voice their views on trucking matters each month.

This month only the ACT Party has taken the opportunity to offer its thoughts.. T&D

The problem with biofuel mandates

By Simon Court, ACT Party spokesperson on transport

ANYTHING WHICH MAKES SUPPLYING

energy more complex and costly is bad for business and ultimately bad for consumers.

That is why the Labour Government’s biofuels mandate is such a bad idea.

In the pursuit of lower transport emissions, Labour has announced that all liquid fuels need to include a minimum percentage of biofuel from 1 April 2023.

Biofuels are typically made from waste cooking oil, corn, and palm oil. If biofuels are made from something that grew, then that animal or vegetable has already taken carbon out of the atmosphere. That is why biofuels are seen as a way to reduce emissions compared to diesel made from mineral oil.

Modern diesel engines can only run on a certain percentage of biofuels before they gunk up the injectors. But that’s not the worst problem facing business and consumers.

MBIE advisors told the Government that: “Internationally, there is evidence that increased demand for biofuels has led to negative environmental impacts and in some cases rising GHG emissions.

“Land use change (both direct and indirect) caused by biofuel feedstocks can contribute to deforestation (therefore increasing net emissions rather than reducing them), loss of soil carbon, biodiversity loss, and competition for food – potentially increasing food prices and reducing food security.”

However, around 60 countries have set biofuels targets which means New Zealand will be competing for and paying more for biofuels than ever before. And MBIE believes this will increase the potential for food and feed-based biofuels to increase competition for food and land.

How is that environmentally friendly?

And it’s not just the environment, it’s business and consumers who will pay excessive costs if they can’t get the precious biofuels, which already cost around four times as much as mineral diesel.

The Labour Government will also impose penalties of up to $800 per tonne of carbon on fuel suppliers who can’t get enough biofuel to meet their mandates.

New Zealand has signed up to reduce carbon emissions to net zero by 2050. Whether you think this is the right target or not, our trading partners expect New Zealand to play our part in reducing emissions.

Fortunately, we have an effective scheme which puts a price on carbon emissions so that businesses who emit carbon can choose to either reduce emissions or pay for others to reduce theirs. It’s a simple and glorious system, the Emission Trading Scheme or ETS. A tonne of carbon costs around $75 at the moment, if you have to buy one to offset your emissions.

Currently the cost of that tonne of carbon under the ETS adds around 20 cents per litre of diesel. As a result there are now real incentives for large fuel users to begin the switch to hydrogen and battery powered trucks. These are still expensive but rapidly coming down in price.

I spoke to an investor in the Hiringa hydrogen business this week. He told me that they finally have consents and are now building four hydrogen production and refuelling stations in the North Island. Soon they will be able to supply a network of fuel retailers with clean green hydrogen through the Waitomo chain.

This all started well before a biofuel mandate was imposed by Labour.

Bad policy like the biofuel mandate risks wrecking the environment, pushing up the price of food, and adding cost to business and consumers at a time of already soaring inflation.

The biofuel mandate, which is yet another climate smoke signal, will do nothing to reduce emissions that could not already be reduced at much lower cost under the ETS.

The mandate makes investing in alternative long-term solutions to reduce emissions really challenging for businesses, as Governments can change the playing field at any time.

ACT simply does not believe that Labour Ministers or their officials could pick a technology winner. If they could then why on earth are they still working in Wellington for Government?

That is why ACT as a party in a future government would drop expensive subsidies for EV’s, scrap biofuel mandates and let energy suppliers and energy users work out the most efficient way to reduce emissions.

New Zealand businesses are already well on their way to meeting our emissions reduction targets. The Government should trust them and get out of their way. T&D

Simon Court