MTA backs biofuels decision

The government’s decision to scrap the biofuels mandate is a win for cash-short Kiwis, says the Motor Trade Association (MTA).

Prime Minister Chris Hipkins announced on February 8 that the mandate will not proceed because it “would have increased the price of fuel and, given the pressure on households, that’s not something I’m prepared to do”, he says.

The effect on households was an issue the MTA foreshadowed in its submission on the Sustainable Biofuels Obligation Bill last month.

“The obligation and its implications for the importation of biofuels, at least in the short to medium term, will increase fuelling costs motorists face,” states the MTA’s submission. “Budget-constrained households will be disproportionately affected.

“Such households are more likely to already experience higher fuelling costs as they predominantly own older, less fuel-efficient vehicles compared with the average age of New Zealand’s fleet.

“The obligation is estimated to increase fuel prices by five to 10 cents per litre – adding further strain to budget-constrained households. Reduced energy affordability diminishes New Zealand’s public ability – more specifically, the ability of low-income and budget-constrained households to participate in society. For instance, their ability to commute to work and school affordably.”

Notwithstanding the decision, the MTA recognises the need for pragmatic action to address climate change and that the sector has a key role to play to achieve targets.

The association wants to ensure the industry can innovate and diversify so New Zealand can leverage all available low-emissions technologies and work towards a net-zero emissions future.