'Greener' petrol plan stalls before start line

By SIMON COLLINS science reporter

Plans to mix "green" ethanol with petrol in New Zealand cars have collapsed.

Australian-owned Gull Petroleum, which had planned to blend up to 10 per cent ethanol into its petrol, has shelved the idea after importers of Japanese used cars refused to guarantee that the fuel would run smoothly in their vehicles.

Gull retail operations manager Ulrik Olsen said New Zealand and Japan were now virtually the only developed countries not using ethanol.

"The US has been running this for 25 years. It's hardly new. The ethanol blend is much better for the environment.

"But from the car manufacturers' point of view, apart from the goodwill in being able to market that your car is up to speed with the latest innovation in fuel, it's just not worth the risk."

The Government announced in September that ethanol would be exempt from excise taxes for two years to encourage oil companies to introduce an ethanol blend.

The Energy Efficiency and Conservation Authority (EECA) won approval from the Environmental Risk Management Authority for a blend of up to 10 per cent.

EECA chief executive Heather Staley said every litre of petrol saved would help New Zealand to keep its promise under the Kyoto Protocol to cut emissions of greenhouse gases back to 1990 levels.

Emissions of carbon dioxide alone, driven mainly by more cars on the roads, rose by 22 per cent from 1990 to 2000. Worldwide, greenhouse gases are blamed for raising global temperatures by 0.6C over the past 150 years.

Mr Olsen said new cars exported from Japan were all suitable to run on ethanol blends to meet market demands in the US, Europe and Australia. But cars for the Japanese domestic market, which were later sold to New Zealand second-hand, were not made for ethanol.

"We believe they are fine as well. No one is saying they are not. It's just that they have never been tested."

He said Japan was introducing an ethanol blend in its domestic market this year, so it should become possible in New Zealand a few years from now.

Motor Importers Association director Perry Kerr said Japanese manufacturers could not guarantee that their existing used cars would be able to run ethanol blends because "they don't know".

"In the light of that, MIA members are reluctant to say it's suitable," he said.

Anchor Ethanol, a Fonterra subsidiary which makes ethanol from whey at Tirau, Reporoa and Edgecumbe, said it was disappointed, but it was "early days".

"I still think it's going to happen, but let's call it like it is at the moment, and that is that it's not going anywhere right now," said manager Tim Mackle.

However, a separate trial with biodiesel made out of tallow from meat factories still looks set to go ahead this year.

BP Oil communications manager Diana Stretch said BP planned a trial in the Auckland area, possibly in a fleet of cars, using fuel from a small Auckland company, Biodiesel Oils.

Meridian Energy is also completing a study on converting tallow into biodiesel, originally planned for use in earthmoving equipment for Project Aqua.