NEWS RELEASE
22 August 2002
Landmark Determination on Ethanol in Petrol
Three of Australia’s peak automotive industry and consumer bodies have urged the
federal government to support a maximum limit of 10 percent of ethanol in petrol and
not to mandate its use.
The landmark determination by the three bodies sets a clear agenda for government
deliberations.
The joint agreement by the Australian Automobile Association, the Federal Chamber
of Automotive Industries and the Australian Institute of Petroleum comes at a time
when the Federal Government is determining its policy on the inclusion of ethanol in
petrol.
The three organisations have considered issues of price, operating efficiency, and
supply.
They say that while a 10 percent ethanol level is acceptable, mandatory introduction
would severely disadvantage consumers and potentially have negative impact on raw
material suppliers.
The FCAI, representing car makers and importers, has determined existing vehicle
warranties could support and ethanol level of up to 10 percent. However FCAI chief
executive Peter Sturrock has warned ethanol levels in excess of 10 percent could
cause severe operational malfunctions including loss of drivability, loss of fuel
economy and accelerated wear of engine components and fuel lines.
“A proportion of ethanol greater than 10 percent would place Australia outside world’s
best practice and would seriously impact on world maker’s ability to purpose build
cars for our market,” Mr. Sturrock said.
“Certainly it would have an effect on warranties.”
“Apart from that challenge it is irrefutable that high ethanol levels lead to increased
fuel consumption.”
The Executive Director of the Australian Automobile Association, Lachlan McIntosh,
said that mandating a fixed proportion of ethanol in petrol would have serious
ramifications for the 6.4 million motorists his organisation represented.
“Ethanol has lower energy content than petrol and costs more to produce. The likely
outcome would be more expensive petrol with reduced fuel economy,” Mr McIntosh
said. “That would only serve to anger motorists who are very sensitive to petrol
prices.”
“There is also a concern about the effect on engine components. Manufacturers
consider warranties void if a vehicle has been using petrol with ethanol content higher
than 10 percent.”
Constituent Members
“AAA is keen to encourage the introduction of alternative fuels such as ethanol but is
concerned to ensure that overall quality and price is not distorted by use of other
products in the fuel mix,” he said.
The Australian Institute of Petroleum said local sugar growers could be
disadvantaged by a “flood of imported ethanol.”
According to AIP Executive Director Bryan Nye moves to help the local sugar industry
which provides the raw stock could be thwarted by imports.
“There are serious issues of impact on costs and efficiency the Australia’s already
struggling oil refining industry,” Mr Nye said.
“In trying to help primary industry, a government mandate on ethanol could put our
industry on the floor.”
“Any consideration of mandates should also consider all bio-fuels not just ethanol.”
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Contact
Lauchlan McIntosh
AAA
0418 424 886