The chief executive of Australia’s largest renewable fuel company Australian Renewable Fuels, Daryl Butcher, said the government had reneged on a pledge by scrapping the tax-free status of biodiesel, and this could push $60 million in planned investment offshore, reported The Australian Financial Review (26/6/2006, p.9).
ARF loses $4.5m contract: Butcher said the decision, which passed the Senate last week and becomes effective next month, had already cost his sharemarket-listed Australian Renewable Fuels (ARF) a $4.5 million contract.
No rebate for biodiesel: The legislation means commercial vehicles using biodiesel will not get the 38c-a-litre rebate available to users of regular diesel.
CEO angry with feds: "This is disgraceful," Butcher said. "We were given an undertaking by the Federal Government that nothing it did would disadvantage the biodiesel industry."
$150m in biofuels investment: In the past two years, $150 million has been invested around the country in biodiesel plants that convert animal fat and used cooking oils into fuel. Queensland Nationals senator Barnaby Joyce, who voted against the legislation, said the abrupt change in policy would make biodiesel uncompetitive and "chop the industry off at its knees". He said the change came after lobbying from the big oil companies.
Rural plants not likely: ANZ Banking Group said the legislation would prevent its infrastructure funds building any further plants in rural Australia. The head of ANZ infrastructure services, John Clarke, said Australia was the only country in the world with a discriminatory tax on biodiesel.
$60m plans at stake: ARF has two plants in Australia and had planned to build a further three at a cost of $60 million, but Butcher said those investments were now in doubt. One mining company had planned to convert its entire fleet to biodiesel, a contract worth $4.5 million a year, but had cancelled.
The Australian Financial Review, 26/6/2006, p. 9
Source: Erisk Net