The Government has scrapped the proposed biofuels mandate as it looks to focus on the cost of living.
It was among a number of programmes that are being cancelled or delayed with new prime minister Chris Hipkins saying the focus would now be on the cost of living.
In the announcement on Wednesday, Hipkins said Cabinet agreed that the biofuels mandate will not proceed.
“The mandate would have increased the price of fuel, and given the pressure on households that’s not something I’m prepared to do.”
The Government first announced its proposed biofuels mandate in December 2021 and said it will help reduce greenhouse gas emissions in the transport sector.
When first announced, measure were supposed to kick in from April 1, 2023 but this was later postponed to 2024 with the Government citing the cost of living and saying the sector also needed more time to prepare.
Fuel wholesalers would have needed to meet emissions intensity reduction targets of 2.4% for 2024 and 3.5% for 2025. Provisional targets were to be set for 2026 and beyond, increasing up to 9% by 2035, with adjustments on the intensity targets in the intervening years to make up for the year’s delay in implementation.
However, it was revealed advice from officials had warned the policy would add between five to 10 cents a litre to the cost of fuel.
The mandate was expected to prevent about one million tonnes of emissions from cars, trucks, trains and ships over the next three years and up to nine million tonnes by 2035.
