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Z Energy welcomes release of the Sustainable Biofuels Mandate

16/12/2021 - General News

Z Energy (Z) welcomes today’s announcement from the Government that New Zealand’s Sustainable Biofuels Mandate will be in place by 1 April 2023.

"Biofuels are an important step on the journey to help New Zealand decarbonise the transport sector,” says Z Energy GM Transition Julian Hughes.

"This announcement sets a clear agenda for us and the wider industry on what we need to achieve and how to get there."

Many other countries such as Europe, the UK, US, Japan and South Korea already have a biofuels mandate, as well as production incentives that have helped to create a biofuel industry in those markets. Z has been advocating for this type of policy as a way to reduce the carbon intensity of the fuel that all retailers sell.

"We’ve long said that we want to be at the heart of the climate change solution and biofuels is an area we have been committed to for some time now. We built a biodiesel production plant, and despite a pause in local production, continue to supply biodiesel to our most committed commercial customers. We’ve also signed an MoU with Neste, the world’s leading producer of renewable diesel and sustainable aviation fuel (SAF), to collaborate to bring low-carbon fuels to the New Zealand market,” continues Julian.

Z believes this mandate will create mass demand for low emissions fuels for use in existing internal combustion engine vehicles and looks forward to working with Government and industry on how it can supply this to its customers.

"We commend the Government for making key changes from the initial proposals, including increasing the maximum penalty from $300 to $800 per tonne of carbon dioxide equivalent emissions not achieved, to incentivise compliance," says Julian.

"However, we would like to continue working with the Government on ways to support domestic production, including access to domestic feedstocks as a way to allow local producers to compete more effectively with demand from subsidised markets overseas. For example, we suggest that double accounting for the emissions reductions created by locally produced biofuels could be considered as a way of supporting a domestic biofuel industry."

As we have advocated for, Z supports the development of a separate mandate for sustainable aviation fuel (SAF) during 2022 given the unique challenges the sector faces and looks forward to responding to the RFP set by Air New Zealand and MBIE.

Z believes the best fuel for the best use case will be the foundation of a successful energy transition, recognising electric and hydrogen will have a role to play alongside biofuels. It sees the announcement today as a step in the right direction on our journey to a low carbon future, with biofuels helping to reduce emissions as we make the transition to low emissions vehicles.

Media enquiries: Haley Mortimer — haley.mortimer@z.co.nz; 027 549 9323