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Liquid Fuel (Ethanol) Amendment Bill 2014
Explanatory Notes
Short title
This Act may be cited as the Liquid Fuel (Ethanol) Amendment Bill Act 2014
POLICY AND OBJECTIVES
The objectives of the Bill
The objective of the Bill is to amend the Liquid Fuel Supply Act 1984 to require
minimum ethanol content in relation to the total volume of motor spirit sales in
Queensland.
The policy rationale for the Bill
Amend the Liquid Fuel Supply Act 1984, specifically to require a minimum
ethanol content in relation to the total volume of motor spirit sales in
Queensland.
Allow the required percentage and relevant periods to be determined by
Regulation if required.
Stimulate the orderly development of, and investment in, a fuel ethanol
industry in Queensland.
Stimulate regional and rural development through the creation of an
alternative and stable market for feed stock produced in Queensland and
the creation of new jobs in the fuel ethanol industry.
Improve the quality of unleaded petrol and reduce greenhouse gas
emissions from motor vehicles in Queensland by blending a minimum
quantity of the oxygenate, ethanol, with unleaded petrol used in
Queensland.
Reduce Queensland's reliance on foreign oil imports and Queensland
motorists' exposure to the vagaries of the global oil market.
Take advantage of the emerging second generation technology producing
ethanol from lignocellulosic biomass (such as wood residues, municipal
paper waste, grain sorghum, agricultural residues and dedicated energy
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crops), eliminating the need to use traditional food crops and creating a
renewable, clean and green liquid fuel alternative to fossil fuels.
ADMINISTRATIVE COST
It is expected that there will be minimal extra cost to Government.
FUNDAMENTAL LEGISLATIVE PRINCIPLES
The Bill is consistent with the fundamental Legislative principles.
NOTES ON PROVISIONS
Clause 1 - Short Title
Clause 1 provides that the short title of the Act will be cited as the Liquid Fuel
Supply (Ethanol) Amendment Act 2014.
Clause 2 - Amendment of the Liquid Fuel Supply Act 1984.
Act Amended
Clause 2 provides that the Bill amends the Liquid Fuel Supply Act 1984.
Clause 3 - Amendment of s5 (Interpretation)
Section 5--
insert--
initial period, for part 5A, see section 35AD.
motor spirit, for part 5A, means prescribed motor
spirit.
motor spirit-ethanol blend, for part 5A, see
section 35AD.
primary wholesaler, for part 5A, see section
35AD.
relevant period, for part 5A, see section 35AD.
return, for part 5A, see section 35AD.
sell, for part 5A, see section 35AD.
Clause 4 - Replacement of pt 5A, hdg (Ethanol substitution)
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Part 5A, heading--
omit, insert--
Part 5A Ethanol in motor spirit
Clause 5 - Replacement of s 35A (Requirement to purchase
ethanol)
Clause 5 omits and replaces the existing Section 35A of the Liquid Fuel Supply Act
1984.
35AB Purpose of pt 5A
The purpose of the new part `35AB Purpose of pt 5A' is to require a minimum
ethanol content in relation to the total volume of motor spirit sales in Queensland.
This provision clearly enunciates the policy intent of the Act in requiring that
ethanol should make up a minimum percentage of total motor spirit sales in
Queensland.
35AC Application of pt 5A
35AC (1) applies to the sale of motor spirits by a primary wholesaler, either for
delivery in Queensland, regardless of where the sale is actually made, or to a
person in Queensland.
35AC (2) provides that this part does not apply in the case of one primary
wholesaler selling to another primary wholesaler.
35AC (3) defines for (1)(b) a sale for motor spirit in Queensland occurs if the spirit
is delivered or provided into or within Queensland.
35AD Definitions for pt 5A
This part introduces new definitions to the Act for a ``initial period", "motor spirit-
ethanol blend", "primary wholesaler", "relevant period", "return" and "sell".
An initial period means, unless otherwise prescribed by regulation, a three year
period starting three years from the date of assent.
Motor spirit-ethanol blend means motor spirit containing ethanol.
Primary wholesaler means a relevant person who supplies motor spirit, or supplies
motor spirit from an oil refinery, a shipping facility or a motor spirit facility supplied
by a pipeline or a shipping facility.
Relevant period means, unless otherwise prescribed by regulation, a period of
three months starting from the beginning of January, April, July and October each
year.
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Return means a return under section 35AH(1).
The definition for sell encapsulates all forms of trade including barter, exchange
and supply for profit.
35AE Initial minimum percentage ethanol content
35AE (1) states that this section applies to motor spirit sales in the initial period.
35AE (2) outlines the responsibility of the wholesaler to ensure that sales of
ethanol during a relevant period meet the required fixed percentage and states the
maximum penalty for failure to comply.
35AE (3) defines that in this section fixed percentage is either the percentage
prescribed by regulation or, if no such regulation exists, as being five percent (5%).
35AF Subsequent increased minimum percentage ethanol content
35AF (1) states that this section applies to sales by a primary wholesaler from a
prescribed day.
35AF (2) outlines the responsibility of the wholesaler to ensure that sales of
ethanol during a relevant period meet the required fixed percentage and states the
maximum penalty for failure to comply.
35AF (3) defines that in this section, fixed percentage is either the percentage
prescribed by regulation or, if no such regulation exists, as being ten percent
(10%). Prescribed day is defined as the day immediately after the initial period
ends.
35AG Exemptions from ss 35AE and 35AF
Section 35AE forms the remainder of the provision that allows motor spirit
producers and refiners not to comply with the mandate provided for in Sections
35AE(2) and 35AF(2). Motor spirit producers, refiners and sellers can only avoid
complying if the Minister grants them an exemption under section 52 and then only
if the Minister is satisfied that an applicant for exemption cannot secure sufficient
quantities of ethanol, at a prescribed price, to satisfy the requirement.
The exemption provision accepts that there will be shortages of ethanol while the
industry is in its infancy. The exemption provision should provide protection against
the import of ethanol, which may occur on a large scale without the provision of an
exemption, and which may impede the development of a domestic industry. It
should also limit any opportunity for oil companies to increase fuel prices to
motorists; negating any argument that ethanol is more expensive to source than
conventional motor spirit.
35AH Returns
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35AH (1) states that the primary wholesaler must supply the Minister a return
within one month of the end of a relevant period and states the maximum penalty
for failure to comply.
35AH (2) states that a return must be in an approved form and contain information
on the total volume of motor spirit sold, the total volume of ethanol sold and any
other prescribed information.
35AI Requirements to keep records
35AI (1) details the requirements relating to record keeping and states the
maximum penalty for failure to comply.
35AI (2) states that records must include details prescribed under a regulation
without limiting (1).
35AJ False or misleading returns
35AJ(1) concerns false or misleading returns and states the maximum penalty for
failure to comply.
35AJ(2) states that for a return mention in subsection (1), Section 47 does not
apply.
35AK Allegations of false or misleading matters
35AK(1) states that a false or misleading statement, document or information are
the basis for an offence in this part.
35AK(2) states that it is not necessary for a complaint to specify which in (1) apply.
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