The history of ethanol-blended fuel in NSW.
In July 2003, following consultation with the States and Territories, the Commonwealth Government introduced national standards for regular unleaded petrol and ethanol-blended petrol, which capped the amount of ethanol that could be added to petrol at 10%.1
On 1 March 2005, the Fuel Quality Information Standard (Ethanol) Determination 2003 was introduced nationally, setting a standard for the labelling of ethanol-blended fuel.
1 Most cars in NSW that use unleaded petrol can safely use petrol-blended with up to 10% ethanol (E10).
The first biofuels mandate in Australia commenced in NSW on 1 October 2007. The Biofuel (Ethanol Content) Act 2007 (the Act), later re-named as the Biofuels Act 2007, initially only applied to primary fuel wholesalers, such as Caltex, BP, Mobil and Shell (Viva), and required them to ensure that ethanol made up a minimum of 2% of petrol sold in NSW.
The ethanol mandate was conceived as a step towards reducing NSW dependence on fossil fuels and reducing the State’s reliance on imported petroleum products.
2009 was a busy year for the ethanol mandate in NSW:
- The Biofuels Act was amended to effectively phase out regular unleaded petrol by 2011 – a measure intended to encourage motorists to switch to ethanol-blended fuel.
- A series of graduated increases to the ethanol mandate were inserted into the laws which would see an increase to 4% in 2010, followed by 6% in 2011.
- The mandate was extended to cover all major fuel retailers, including major oil companies and service station chains such as Coles Express, Woolworths and 7-Eleven.
- And the NSW Government introduced the concept of sustainability to the ethanol mandate – whereby only ethanol produced in accordance with a sustainability standard published by the US-based Roundtable on Sustainable Biofuels could be counted towards compliance with the ethanol mandate.
On 1 January 2010, the ethanol volume mandate increased from 2% to 4% in line with the 2009 changes to the Act.
On 1 January 2011, the ethanol volume mandate was further increased to 6%.
The planned phase-out of unleaded petrol was delayed until 2012.
Around this time, NSW petrol retailers undertook to replace regular unleaded petrol nozzles with E10 nozzles in preparation for the expected phase-out of regular unleaded.
In May 2012, the Government withdrew its plan to phase out regular unleaded petrol. Concerns had been raised publicly that removing regular unleaded entirely would increase some NSW motorists’ fuel bills, because some cars could not run on E10 and their owners would be forced to switch to premium petrol products such as 95 or 98.
In January 2015, the NSW Government asked the Independent Pricing and Regulatory Tribunal (IPART) to identify and assess options to increase the uptake of ethanol-blended petrol. The request for IPART advice was in the context of a long term decline in the industry’s performance against the ethanol mandate.
In August 2015, the Office of Biofuels within the Department of Trade and Investment was closed and its administrative responsibilities transferred to NSW Fair Trading within Department of Finance, Services and Innovation.
In its report, IPART set out options for reforms the Government could introduce to improve the retail fuel industry’s performance against the ethanol mandate, as well as measures to encourage more consumers to use E10.
In December 2015, the Government announced it would:
- introduce a package of amendments to extend and better target the ethanol and biofuels mandates
- develop an online fuel price information tool and implement a consumer awareness campaign to tackle the myths and address consumer aversion to E10.
During 2016, amendments to the Biofuels Act 2007, the Biofuels Regulation and the Fair Trading Regulation 2012 (fuel price signs) were finalised and commenced on 1 January 2017.
In August 2016, the online fuel price tool FuelCheck, was launched.
On 1 January, 2017, Queensland became the second state in Australia to mandate the sale of ethanol-blended fuel, by introducing a 3% ethanol mandate.
In NSW, fuel retailers regulated under the Biofuels Act were required to comply with the new requirements from either 1 January or 1 April 2017, depending on whether or not the retailer was regulated by the previous mandate.
Following a detailed analysis of fuel sales patterns, the mandate has been re-focused towards 'volume fuel retailers', which is any person who operates a volume fuel service station.
A volume fuel service station is one which:
- sells three or more types of petrol or diesel, and
- sells in excess of 900,000 litres per quarter of petrol and diesel combined, in two consecutive quarters.
Detailed information about the operation of the biofuels mandate and the full list of volume fuel retailers is available on the Fair Trading website.
On 29 May 2017, the E10 Fuel for Thought consumer advertising campaign was launched, together with the E10 Fuel for Thought website and E10 Compatibility Check.
A statutory review of the Biofuels Act 2007 was conducted as required by section 32 of the Act. To assist in conducting the review, the Department of Customer Service released a discussion paper in 2019 for public consultation. The review found the regulatory framework and the objectives of the Act to be well aligned. The Review made eight recommendations following consideration of stakeholder feedback. The recommendations were mostly administrative and were designed to reduce regulatory burden and improve the regulatory regime.
The recommendations of the review were implemented during the course of the year. This included:
- Removing the requirement of primary wholesalers to be registered with NSW Fair Trading and to report their volume of sales,
- Reducing the frequency of reporting requirements of volume fuel retailers from three months to 6 months;
- Releasing data regarding exemptions from the mandate granted under the Act; and
- Incorporating the E10 Fuel for Thought website and E10 Compatibility Check into the NSW Government website to increase consumer awareness
The Biofuels Regulation (No 2) 2016 was due to be repealed under the sunsetting provisions of the Subordinate Legislation Act 1989. As a result, the Regulation was remade in September 2022 with minor changes to record lodging and record keeping requirements. The Biofuels Regulation 2022 is currently in force and continues to provide fit-for-purpose legislative support to the Biofuels Act 2007.