Industries at Odds Over Queensland Ethanol Mandate Bill

The opposing reactions of various primary industries to the Queensland Government’s introduction of its Liquid Fuel Supply (Ethanol and other Biofuels Mandate) Amendment Bill 2015 to State Parliament demonstrate the conflicting interests affected by subsidized ethanol production.

Essentially, the bill would require that 20% of all Regular Unleaded Petrol (RUP) sold within the state be mixed with ethanol.

AgForce Queensland, representing the interests of both grain producers and beef producers, applauded the decision, noting that the move was one the organization had been lobbying in favor of for a number of years under successive administrations.

“Targets will help provide surety for the grain industry, as it will provide a good, all year round consumer of Queensland grain. A domestic renewable biofuel industry will bring more diversity and security to the supply of fuel in addition to providing a reliable alternate market for grain grown by Queensland producers,” said Arthur Gearson, vice president of AgForce Grains.

AgForce also made note of multiple addtional benefits tied to the legislation including employment opportunities, import replacement, energy security, the expansion of demand streams for grains and oilseeds, cleaner burning fuels, and the reduction in greenhouse gas emission leading to human health benefits.

In contrast however, the Australian Lot Feeders Association (ALFA) claims that the legislation was ‘poor government policy’, The Association explained that ethanol mandates would lead to increased food prices given that 57% of the state’s ethanol will be produced from grain, adding that the pull of grain away from food production would artificially raise the price of beef, diary, chicken, egg and pork.

“No industry should have a Government-imposed demand for its product, particularly when consumer don’t’ want it, mandates increase food and fuel prices and the policy costs will likely outweigh any purported benefits,” said ALFA president Don Mackay.

The AFLA also claims that such subsidies have not worked in the past, noting that the ethanol industry has received nearly $1 billion in government assistance since 1980, but there remains only three ethanol producers in all of Australia, and ethanol accounts for only 1% of all of the country’s total road transport fuel mix.

The association adds that the subsidy would benefit the sugar and grain sectors while effectively imposing a tax on beef, dairy, chicken, egg and pork producers due to increased grain and molasses prices, especially during points of low production.