People would expect the Green Party to celebrate a technology that replaces scarce and polluting fossil carbon with cleaner renewable carbon in our motor vehicles, but in fact, the Greens approach the issue of biofuel with very considerable caution.

The advocates of biofuel claim it will reduce climate-changing greenhouse gases, provide oil security and energy independence for the future, revitalise rural communities with new farming and processing industries, and clean up local air pollution. The critics point out that some biofuel takes as much, or more, fossil fuel to make as it saves, that it replaces one scarce resource, oil, with an equally scarce and probably more precious resource, fertile land, that it will seriously increase world hunger, and it could destroy the last great areas of wilderness and biodiversity such as tropical forests.

There is some element of truth in both of these claims and that is why the Greens have negotiated a clause in this bill that sets out criteria for biofuels that qualify to meet the New Zealand standard. There is no doubt that burning ethanol or bio-diesel in vehicles does have lower harmful emissions that contribute to respiratory disease and that it releases no fossil carbon directly into the atmosphere. But we have to take a lifecycle analysis here and look at how the biofuel is made.

The biofuel with the worst press — and deservedly so, and the previous speaker referred to it as well — is ethanol from corn. In the United States Government subsidies encourage diversion of corn from food markets to fuel and the high price of petroleum with which it competes has encouraged a large increase in corn growing and has just about dried up US exports of corn for food. The price of tortillas in Mexico has doubled as a result and a source of food grains for Africa has virtually gone.

Some say that raising the price of corn will help struggling farmers in developing countries, but the simple fact is that the poor in those countries cannot buy food at that price. Worse, high corn prices for fuel are international so the market will divert corn grown in developing countries into exports for fuel production in the West, perhaps making a few farmers in those countries a bit richer, but starving many more of their people.

To put it crudely, to make ethanol we need sugars or starches, to make bio-diesel we need oils — those are what food is made of too. Biofuel can be made of any food grain or sugar, or oilseed — the determining factor is how much can be got from an acre of land. Even if biofuel is not made from a food crop it may be grown on land that would otherwise be used for food production. If it needs nitrogen fertilisers, water, and tractorable land it is competing with food production, and in the competition of the market, the engines of the rich will always out-compete the stomachs of the poor even though the result is large-scale death.

Food is not the only land use that can be out-competed by biofuel. The forests of South East Asia, last home to an incredible number of rare species like the orang-utan are being clear-felled to plant palm oil plantations for bio-diesel. Add to that that some biofuels do not even reduce carbon dioxide emissions; the amount of fossil fuel that is used to grow them, fertilise them, cultivate them, harvest them, transport them, and process them outweighs the benefits of having a renewable fuel.

Why then would the Greens support this bill? We are supporting the bill because there are some possibilities, particularly in New Zealand, of making some biofuel without causing starvation or destruction of habitat. There are some possibilities of making biofuel with a significant net energy gain and we want to provide for that kind of industry here. First of all, there are wastes — wastes from all forms of farming and crop production, wastes from food processing, by-products from agricultural industries such as tallow and whey. We could get maybe 5 percent of our current fuel use from those sources. It is a very small amount, but it is a start and it could be very valuable in an oil-constrained future.

Getting a small-scale industry started, getting the cars and the fuel distribution system organised and capable of accepting biofuel will set the stage for second generation biofuels that may give us much more than that, if they come to pass. The first of those, and a particular advantage for New Zealand, is wood. Waste wood, and woody biomass of many kinds, is harder to break down — the lignin and the cellulose — but it does not need top quality food land to grow, it generally does not need added water, and it generally does not need added nitrogen. The energy yield may be not all that high, but if the energy inputs are from wood, that may still be acceptable. We do not know when or if that will be commercial, but we do know there are some very interesting trials going on, for example with willow.

I have spoken to Genesis Research and Development, the firm that is developing the salix to ethanol projects and it has this exciting vision in the Taupō basin where we have to de-stock land where animal excreta are causing serious pollution of Lake Taupō. The company reckons it can offer beef and dry stock farmers as good an income from growing willow, coppicing every couple of years, for biofuel as they currently get from animals. At the same time, the willow would tend to suck the nutrients out of the subsoil and would not add more nitrogen into the lake and some of that land has to be de-stocked anyway. So there are some possible win-win solutions where there are environmental benefits as well as fuel benefits and they are the ones we should be pursuing.

A second biofuel in New Zealand is bio-diesel from algae grown on sewage and if that actually becomes commercial — and there are still a lot of questions around it — that is a real win-win. It does not take any land, it grows on sewage ponds, and it cleans up the sewage much better than current treatment methods. It is hard to think of something that could be more of a win-win solution than that. It is a very long way from being commercial, but I have driven in a car fuelled from a small quantity of bio-diesel obtained from the algae so it is not totally a pipedream.

Because there are good biofuels and there are bad biofuels, the Greens have negotiated for a requirement that biofuel cannot be counted towards the sales obligation unless it is produced sustainably and that is given effect to in clause 34G(2)(e), which provides for an Order in Council to set a sustainability standard. That would ensure that the biofuels are not significantly impacting on food production or the environment, and biodiversity. I am not convinced the wording is quite right yet; I think the select committee needs to have a look at it, and needs to amend it to make it an absolute requirement rather than an opportunity for an Order in Council to be passed to set those standards, and we will certainly be looking for that in the Committee stage.

This bill is very tentative — a toe in the water. By 2012 only 3.4 percent of our fuel will be biofuel. That is less than 1 year's growth in demand at the moment. It shows the futility of our starry-eyed belief that we can carry on just as we are with our inefficient transport systems, our inefficient vehicles, and just stick biofuel in the fuel tanks instead.

New Zealand is much better placed than most countries, with its land, and its climate, and its knowledge of growing things,to make a success of biofuels if it can be done. But they will only ever provide a part of our needs.
We have to face the unsustainability of our wasteful vehicles and our wasteful use of them.

We can actually save far more oil much faster through efficiency standards for vehicles, as we have just provided for in the National Energy Efficiency and Conservation Strategy with a stretch target of 25 percent better efficiency for vehicles coming into the country by 2015. We also need to expand our provision and use of public transport and travel demand management. If we do all those things on the demand side, not just the supply side, then 3.4 percent by 2012 might actually mean something.