Lotfeeding

Lotfeeders condemn Qld ethanol mandate move

Jon Condon, 08/05/2015

LOTFEEDERS have called on both sides of Queensland politics to reject a proposed mandate of ten percent ethanol content in fuel sold in the state.

The Australian Lot Feeders Association argues that the policy delivers no net public benefit, while being costly, distortionary and ineffective.

don-mackay

Don Mackay

ALFA president Don Mackay said while NSW remained the only Government in Australia which was supportive of an ethanol mandate, the policy has been broadly criticised by the NSW Treasury and the ACCC as costly and ineffective, with consumers clearly demonstrating that they did not want the product.

“Australian petroleum statistics confirm that over the last four years national demand for diesel and premium unleaded has increased by 15pc and 10pc respectively while demand for ethanol has declined by 23pc.

“This is not surprising, as 15pc of cars, 70pc of motorbikes and all marine, mower, whipper snipper, leaf blowers and other small engines are not E10 compatible due to ethanol’s corrosive and moisture-attraction properties, with a mandate forcing owners to pay up to 12c/litre more for premium unleaded petrol.

“Motorists with E10 compatible vehicles are also worse off as it needs to be at priced at least 3.5c/litre less than regular unleaded petrol in order to offset its poorer fuel economy.

In 2014 the ACCC determined that the average price differential across Australia was only 2.2c/litre.

“The NSW Treasury has perhaps best summed up the issue by stating that the only beneficiary of the NSW mandate is Manildra who have been given a legislated monopoly and a captive market. The major parties in Queensland are instead proposing a legislated duopoly in the state, pitting the grain and sugar industries against the beef sector whilst creating ‘food versus fuel’ concerns.”

“ALFA has always taken an active stance in opposing ethanol mandates, and our concerns have been shared by a plethora of disparate groups who joined an alliance to advocate against their implementation.”

“With the majority of Queensland ethanol derived from grain, ALFA has always been concerned that during low grain production years, the artificial and inflexible demand from mandates would inflate grain and food prices.”

“No industry should have a Government imposed demand for its product, particularly when consumers don’t want it, the policy costs outweigh any purported benefit and the ethanol sector is uneconomic without it. The proposed 10pc ethanol mandate, if implemented, will negatively affect almost every Queenslander, and accordingly we call upon the ALP and LNP to oppose the initiative,” Mr Mackay said.

 

AgForce Queensland, which represents the interests of both beef producers and graingrowers, is yet to offer a comment.

 

 

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Comments

  1. Peter Waddell, 11/05/2015

    Lotfeeders don’t give two hoots about sorghum in the ration these days. Much more content trucking wheat/barley from Coonamble, Nyngan and beyond back to the Darling Downs. Hard to see how an ethanol mandate would have any effect whatsoever given modern sorghum market dynamics.

  2. peter simpson, 09/05/2015

    The Lotfeededrs have an excellent point. The production of ethanol in NSW uses Starch and Sorghum to broduce its ethanol. The NSW companies always claim that they use waste to produce it. But they have never had a independent organisation audit their operatios. Sorghum is a feed lot product. So therefore the mandate has just raised the price of this product. So it is certainly a fuel vs food contest.

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