New Zealand Biofuels Activities

Outline map of New Zealand.

Beginning in July 2008, New Zealand's fuel companies are expected to offer biofuels as part of a government plan to tackle climate change and reduce dependence on fossil fuels. According to the Biofuels Bill announced in February 2007, biofuels will need to account for 0.53% of total fuels sold in New Zealand in 2008 and increase to 3.4% by 2012. Considering that the biofuels industry in New Zealand is in its first stage of development, oil companies will likely initially satisfy their sales obligations with imported biofuels.

In response to the growing biofuels demand in New Zealand and to address the challenges facing the industry, seven prospective producers formed the New Zealand Biofuels Manufacturers Association (NZBMA). Initial members of the group are Argent Energy New Zealand, Biodiesel New Zealand, Biodiesel Oils NZ, Ecodiesel, Biodiesel Australasia, Flo-Dry Engineering, and Aquaflow Bionomic. In an interview with the media in March 2008, a NZBMA spokesman pointed out three main concerns facing the biofuels industry in New Zealand: import of cheap biofuels from the United States, lack of biofuels standards, and the proposed fuel-duty differential between ethanol and biodiesel. The association thinks that because ethanol is not subject to fuel duty and biodiesel tax through the road user charge, oil companies would be encouraged to import sugar cane ethanol from Brazil for economic advantage at taxpayers' expense (The New Zealand Herald 2008).

New Zealand lacks the large-scale grain industries that are providing raw materials in other parts of the world. Thus, ethanol production relies on whey, a byproduct of the dairy industry, or second-generation technology as it becomes commercially available. There is one ethanol plant in New Zealand, operated by the leading dairy producer Fonterra, using whey as feedstock. Fonterra's Edgecumbe plant produces 30,000 liters of ethanol a day and more than 5 million liters in a dairy season. Fonterra also produces ethanol at other plants, including Reporoa and Tirau, for use by the alcohol beverage, chemical, and pharmaceutical industries (Biopact 2007).

There are three biodiesel production plants in New Zealand. Two of them, BioDiesel Oils NZ Ltd and Ecodiesel Limited, are using tallow (a byproduct of the meat industry) as feedstock and have an annual capacity of 60 million liters and 20 million liters, respectively. Both companies are expecting to expand in the next few years, and a few others have announced their plans for building biodiesel facilities using tallow. New Zealand produces 130,000 tonnes of tallow annually, surplus to its domestic requirements, which translates into approximately 127 million liters of biodiesel. The third operational biodiesel plant in New Zealand, operated by BioDiesel New Zealand Ltd., uses waste vegetable oil; and it hopes to ultimately produce biodiesel from rapeseed oil. At the moment, it has plantings of 1,200 hectares of canola, which it hopes to expand to at least 5,000 to 6,000 hectares (USDA 2007). Aquaflow Bionomic is testing biodiesel production from algae.

Biofuels blend was not commercially available in New Zealand until August 2007, when Gull Petroleum started offering E10 (10% ethanol and 90% gasoline) at three sites in Auckland. The company plans to expand the supply to most of its 30 stations over time. E10 (Gull Force 10) will be included in Foodtown, Countdown, and Woolworth's grocery fuel discount programs.

Sources

  1. The New Zealand Herald, March 2008
  2. The New Zealand Herald, October 2007
  3. Biopact, August 2007
  4. U.S. Department of Agriculture (USDA), GAIN Report, February 2007 (PDF 27 KB)