Ethanol-based Fuel Supplies

The Hon. EDDIE OBEID: My question is directed to the Minister for Regional Development. Will the Minister update the House on moves to increase the availability of ethanol-based fuels in New South Wales?

The Hon. TONY KELLY: I thank the Hon. Eddie Obeid for his interest in this important issue. Yesterday I had the pleasure of launching Caltex's first ethanol storage and blending facility in Sydney at the company's Banksmeadow terminal. This new facility will mean more Caltex service stations in Sydney and regional New South Wales will now be able to offer E10 fuel: unleaded petrol blended with 10 per cent ethanol. As a side issue, perhaps now Woolworths will be able to start offering E10 fuel also and not have an excuse not to. This means it will be easier for more people to access this cleaner, greener and cheaper fuel. I congratulate Caltex on the completion of this very important infrastructure project.

I now look forward to rapid increases in Caltex's E10 sales to meet the 2 per cent mandate, and to its continued co-operation in developing a sustainable biofuels industry in New South Wales. The Iemma Government is committed to supporting biofuels and we are leading Australia in mandating the use of ethanol in petrol. We are seeing some very positive action by the major petrol companies to meet the requirements of the mandate. We will continue to work with them to ensure more ethanol-blended petrol is available at more New South Wales petrol pumps.

As the world grapples with the spiralling cost of oil it is incumbent upon governments to ensure greater diversity in the mix of our transport fuels. Importantly, new transport fuels must also be capable of making a significant contribution to reducing greenhouse gas emissions, and they must not lead to unintended consequences, such as increasing the price of food. The New South Wales ethanol mandate gets this balance right. I have made it clear that New South Wales wants a sustainable biofuels industry that is at the cutting edge of technological developments.

Hundreds of millions of dollars are being invested in developing second-generation biofuel technologies around the world. Numerous projects are looking to ensure that ethanol produces food as well as fuel. I am aware of projects that are looking to capture carbon emitted from coal-fired power stations and to create biodiesel using algae. These are technologies that exist today and that are looking to be commercialised over the next few years. To realise the benefits of the technological advances that they can bring we must take action now. If we wait, others will seize these opportunities and New South Wales will lose those jobs and the investment that these advances will bring.

The biofuel industry can make a real contribution to what will be a difficult transition away from oil and transport fuel. I urge all members who have taken an interest in this important policy to understand the complexities and challenges that confront this emerging industry. The reality is that in 20 years our cars and trucks will all be running on some form of biofuel and some of our vehicles will be hybrids. The Iemma Government is committed to ensuring that when it comes to biofuels we get the balance right in New South Wales—unlike the Coalition, which did absolutely nothing when it was in government federally.