Premier & Cabinet

Type:
Premier's Memorandum
Identifier:
M2006-05
Status:
Archived

M2006-05 Biofuels and Other Alternative Fuels - NSW Government Commitments

Description

Updates C1999-15 and C2002-45. Superseded by M2007-16

Detailed Outline

On 22 November 2005, Cabinet endorsed new guidelines committing the Government to using biofuels and other alternative fuels as part of the Government's overall Cleaner NSW Government Fleet Policy.

Biofuels, such as ethanol and biodiesel, are considered a renewable fuel source when produced from agricultural crops, animal fats or cooking oils. Internationally, regional development has been one of the key drivers for many countries adopting policies to assist in the production and use of biofuels. Biofuel production has the potential to affect regional economies by stimulating investment in production facilities.

A fact sheet providing more details on 10% ethanol blended petrol (E10) and biodiesel is attached to this Memorandum.

From 1 July 2006, all executive officers and public service staff who drive Government-owned vehicles as part of their remuneration package will be required to use E10 blends (or other alternative fuels) where this is practicable, available and cost effective. This will coincide with the commencement of a new whole-of-government fuel contract which will run for a minimum of three years.

The current fuel contract does not include biofuels. However, the public tender for the new contract has invited offers for both E10 and biodiesel, as well as conventional fuels. The Department of Commerce is currently carrying out evaluation of tenders submitted. Once this process has been finalised, it will be determined whether biofuels will be available from fuel cards, or as bulk fuel delivered under the fuel contract. It is important to note that Government agencies can also choose to support any alternative fuels not included in the fuels contract.

Vehicles managed by the Department of Commerce's StateFleet will be issued with fuel cards specifically providing for the consumption of E10, should they become available under the fuel contract. Other agencies should obtain fuel cards direct from suppliers on the contract. Note that E10 may not be suitable for all Government owned vehicles, and should not be used if the manufacturer has stated that it will void vehicle warranties, or damage the vehicle in some way.

Cabinet has also agreed that public service staff or executive officers will not be permitted to obtain a V8 powered vehicle under a novated lease arrangement. This is in keeping with a decision made in 2004 to remove V8 powered vehicles from the Government contract for the Acquisition of Motor Vehicles.

Ministers should advise their Chief Executive Officers that, effective from the date of this Memorandum, they should not enter into any novated lease arrangement for V8 powered vehicles with their staff. This provision is encouraged to be applied to other employees (such as those in State Owned Corporations) who package novated lease vehicles.

In addition, public sector officials who currently have Government owned vehicles as part of their remuneration package are encouraged to replace existing vehicles with hybrid vehicles when they are due for replacement.

The Motor Vehicle Policy for NSW Government Agencies, which is available on the Premier's Department Website  (publications section under travel), has been amended to reflect these changes.


Morris Iemma MP
Premier, Minister for State Development, and
Minister for Citizenship

Issued : Workforce Capability (Public Employment Office)
Contact: Simon Waterhouse, Senior Project Officer
EMail: [email protected]
Telephone no: 9228 3147 Facsimile: 9228 3577
File no: PSM/00094
Date: 10 April 2006
This Memorandum updates Circular no. C1999-15 and Circular no. C2002-45

__________________________________________________________
 
ETHANOL

What is ethanol?
Ethanol (CH3CH2OH) is an alcohol, an oxygenated, organic carbon compound. It is produced in Australia from by-products such as wheat starch and C molasses. Ethanol is considered a renewable fuel when produced from agricultural sources. Ethanol can be used as an alternative fuel, petrol extender or octane enhancer. Octane is critical in the proper combustion of petrol. From 1 March 2004 the Commonwealth Government limited the level of ethanol in petrol in Australia to a maximum of 10%.

Where do vehicles fill up in NSW? Is there a distribution network?
In NSW there are about 130 independents retailers selling ethanol blends. Caltex (through its subsidiary company Access Energy), Shell and Park Petroleum supply ethanol petrol in NSW.

What is the impact of the use of ethanol on engine damage?
At a 10% level there is little likelihood of damage in new vehicles. According to the Federated Chamber of Automotive Industries, most new and many older vehicle models can run on 10% ethanol blended petrol (E10). However there are some technical reasons why some models, particularly pre-1986 models, cannot or should not use E10. Fleet managers should check that manufacturers' warranties are not voided by the use of E10.

What are the environmental impacts of the use of ethanol?
Greenhouse gas emission benefits from ethanol vary according fuel source and how it was produced. In general lifecycle greenhouse gas emissions from 10% ethanol blends are slightly lower (1-4%) compared to neat petrol once their lower fuel economy is taken into account (i.e. 2-3% lower fuel economy for 10% ethanol blends compared to neat petrol). Further reductions generally require use of cogeneration to supply heat and power for ethanol production.

The environmental impacts of ethanol, normally blended with petrol at 10% (E10) volume, are mixed. Compared with petrol, tailpipe emissions of carbon monoxide are lower. However, ozone precursor emissions of oxides of nitrogen and evaporative emissions from volatile organic compounds are higher. In terms of air toxics, tailpipe emissions contain lower levels of 1,3 butadiene, benzene, toluene and xylene but higher levels of aldehydes. At present little data is available regarding the impact of 10% ethanol blends on tailpipe emissions on particle emissions.

Ethanol can also be blended with diesel fuel by the addition of a co-solvent. Emission benefits include a decrease in particle emissions. However, there is currently a lack of supply outlets for this fuel.

BIODIESEL

What is biodiesel?
Biodiesel is fuel produced from vegetable oils and/or animal fats by the process of esterification. Biodiesel can be manufactured from virgin oils (eg. canola, mustard, soy or palm oils) or waste oils (eg. spent cooking oils and tallow after meat processing). Current biodiesel production in Australia is based on tallow and waste vegetable oil.

What are the advantages of the use of biodiesel?
Biodiesel is a renewable fuel, and on a life cycle basis produces much less greenhouse gas emissions compared to diesel. Reduced particulate emissions are also a significant environmental advantage of biodiesel. Generally, studies of biodiesel indicate slightly higher emissions of oxides of nitrogen compared to ultra low sulphur diesel fuel.

Biodiesel is biodegradable and non-toxic, thus it has significant operational health and safety advantages, as well as being favourable for use in marine environments where there is a potential for spills. The toxic polycyclic aromatic hydrocarbon content of exhaust emissions is reduced. The absence of sulphur also avoids contamination of exhaust oxidation catalysts.

What is the impact of the use of biodiesel on engines?
Engines should not require any modification to run on biodiesel that meets the Australian fuel standard. However, it is important to check with vehicle manufacturer/supplier to ensure that the vehicle warranty covers the use of biodiesel blends (eg 5%, 20% or 100%) biodiesel. Note that biodiesel should not be stored for extended periods between uses.

Overview

Compliance

Not Mandatory

AR Details

Date Issued
Jun 29, 2006
Review Date
Jun 29, 2016
Replaces
Replaced By

Contacts

Contact
Contact us
Phone
02 9228 5555
Publishing Entity
Department of Premier and Cabinet
Issuing Entity
Department of Premier and Cabinet