KEY POINTS:
Laws have been passed that require oil companies to sell a certain amount of biofuel each year, beginning on October 1.
In the first year biofuels will have to make up 0.5 per cent of an oil company's sales, rising by 0.5 per cent increments to reach 2.5 per cent in 2012.
Principles have been written into legislation to try to avoid companies selling imported biofuels that are unsustainable - such as ones that have a bad impact on global food production.
But it is not yet known how it will be determined if a fuel meets the principles.
A top independent official remains concerned that the Government's push for biofuels could backfire, despite late changes to laws that will soon force oil companies to sell them.
Parliament passed legislation on Wednesday night that will make oil companies start selling a small but progressively higher amount of biofuel from October 1.
Parliamentary Commissioner for the Environment Jan Wright - who is effectively a watchdog for the environment - issued a warning before the legislation passed that it threatened New Zealand's reputation as a clean, green country.
Yesterday she repeated that even after amendments, the Biofuel Act remained a concern.
"The amendments to the bill may well have improved it," Dr Wright said. "But my concerns about the wisdom of a biofuel obligation at this time still remain."
One of the major features of the global biofuel debate has been worry that some biofuels do more harm to the environment than good.
The growing of some crops for biofuel production is being blamed for pushing up world food prices and potentially leading to shortages of crucial foods.
The potential that New Zealand oil companies could import some of these biofuels in order to meet their sales obligation led the Government to insert three "sustainability principles" into the legislation.
They are designed to make sure biofuels sold towards the obligation will avoid negative impacts on food production, not reduce indigenous biodiversity, and must emit significantly less greenhouse gas over their life cycle than fossil fuels.
But a crucial element still has not been decided - how it will be worked out whether a fuel meets the principles or not. That is to be decided by June 30 next year and will be implemented by a decision made in the Cabinet.
National voted against the legislation and its climate change spokesman, Nick Smith, yesterday said the problem was that the legislation simply would not stop unsustainable imports.
"Will this bill stop a company importing unsustainable biofuel out of say, Indonesia?," Dr Smith asked.
"No, it won't."
National is set to unveil its environment policy at the weekend and it appears set to pledge to repeal thecompulsion aspect of the biofuellegislation.
It would instead rely on financial incentives for biofuels and ensure that those tax-based incentives are the same for biodiesel as for ethanol.
The Greens and Labour - who voted for the biofuel legislation - strongly defended it yesterday and suggested the sustainability issue was not as serious as Dr Smith made out.
"A half a per cent obligation, which is all it's going to be in the first year, is not going to lead to massive quantities flowing in," Greens co-leader Jeanette Fitzsimons said of unsustainable biofuels.
