Biofuel industry slams government decision

The Biofuels Association of Australia (BAA) has expressed its “deep disappointment” in the Abbott Government’s decision to abandon commitments that had been made to retain the effective excise-free status of renewable biofuels through until 2021.

In a statement, the BAA said that while it was supportive of the Government’s stance to save funds by removing subsidies for imported biodiesel that has already been subsidised in its country of origin, the Association was concerned at how the “U-turn in policy” will be interpreted by local investors.

In 2011, the previous Labor government proposed an amendment to the Alternative Fuels Act that would have enshrined biofuels with an effective excise-free status until 2021.

The bill was passed with bipartisan support and the intention was made clear that one of the aims was to provide the biofuels industry with certainty. The BAA claims that since 2011 over $100 million has been invested in the industry based on the policies that were in place and added that industry members were “very disappointed” at the Budget decision.

The BAA recently commissioned a report from Delloite Access Economics, which found that the industry net of subsidies generates over $466 million to the Australian economy and leverages more than 3,300 jobs. The BAA said it believes that biofuels still represent a genuine opportunity for Australia to diversify its liquid fuel supply and that the current major producers had been focussed on sourcing base material from waste and non-staple food crops.

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