On 1 December 2015, the Liquid Fuel Supply (Ethanol and Other Biofuels Mandate) Amendment Act 2015 was passed by the Queensland Parliament (“the Ethanol Mandate Act”). The Ethanol Mandate Act imposes a biobased petrol and diesel mandate to commence on 1 January 2017.

Moulis Legal has been monitoring the development of these new laws and the impact on the Australian downstream petroleum industry (available here and here).

In this Focus on Energy and Resources, Moulis Legal’s partner Christopher Hewitt and lawyer Alexandra Geelan outline the key provisions of the Ethanol Mandate Act and the new obligations on Queensland’s fuel retailers and wholesalers.

Ethanol mandate and sales targets

‘Biobased fuel’ is separated into biobased petrol and biobased diesel under the Ethanol Mandate Act. Biobased petrol means ethanol or other fuel for petrol engines produced from plant or animal oils, biomass or waste. Biobased diesel means biodiesel or other fuel for diesel engines produced from plant or animal oils, biomass or waste. According to the government, the Ethanol Mandate Act is to initially support the uptake of ethanol blended fuels but allows for other biofuels in the future.

The Ethanol Mandate Act requires 3% of all petrol sold by a fuel retailer to be biobased petrol if:

  • the fuel retailer has 10 or more service stations; or
  • more than 250,000 litres is sold per quarter at a single station.

The ethanol target will increase to 4% from July 2018.

Fuel wholesalers will not be liable to meet any biobased petrol sales targets provided that fuel wholesalers ensure that there is sufficient supply of biobased petrol available to retailers. If there is sustained, insufficient supply, the government can extend the petrol mandate to wholesalers by setting a ‘wholesale percentage’ target in regulations.

For diesel sales, 0.5% of all diesel sold must be biobased diesel and this sales target does apply to fuel wholesalers.

Fuel retailers that sell low aromatic fuels to discourage petrol sniffing in accordance with the Low Aromatic Fuel Act 2013 (Cwlth) are exempt from the mandate.

The Ethanol Mandate Act allows businesses to apply for exemptions from the mandate where a fuel seller cannot secure adequate supply of biofuels to meet the targets, or where complying with the legislation would threaten the viability of the fuel seller’s business.

Reporting and registration obligations

Fuel sellers (including wholesalers and retailers) will be required to register their details (including their contact details, details of each of their fuel facilities and the type of fuel supplied from each facility) with the Department of Energy and Water Supply (‘DEWS’) within one month of the commencement of the Act. Fuel sellers will also be required to notify DEWS of any changes to their registration within one month after the change.

In addition, fuel sellers will be required to provide an initial report on the volumes of fuel sold for the previous calendar quarter within one month of the commencement of the Ethanol Mandate Act.

Fuel sellers will then be required to submit on-going quarterly returns to DEWS to demonstrate compliance with the mandate and must retain records of all fuel sales supporting the returns for a minimum of two years.

Businesses in the downstream petroleum industry should ensure they are aware of the strict (and short) time frames for compliance under the Ethanol Mandate Act. Additionally, we recommend that all businesses review their management and record keeping practices, with a view to ensuring those practices are efficient and hassle-free.

Moulis Legal’s petroleum law team advises Australian and international business on downstream petroleum issues, including production, trade, sales and distribution, regulatory compliance, land contamination and the management and transfer of petroleum assets. For more information, please contact Christopher Hewitt or Alexandra Geelan on +61 3367 6900 (christopher.hewitt@moulislegal.com and alexandra.geelan@moulislegal.com).

This memo presents an overview and commentary of the subject matter. It is not provided in the context of a solicitor-client relationship and no duty of care is assumed or accepted. It does not constitute legal advice.

© Moulis Legal 2015