[Greens-Media] NSW motorists misled to boost ethanol giant's profits

[John Kaye]

NSW motorists misled to boost ethanol giant's profits

Media release: 16 December 2015

The NSW Office of Fair Trading has begun enforcing a two year old law that
deeply misleads motorists about the energy and sulphur content of E10
petrol, according to Greens NSW MP John Kaye.

('Servos face $1m fines over wrong octane ads', Sydney Morning Herald, 16
December, page 10,  http://j.mp/smh151216E10)

An Office of Fair Trading fax (copy available at http://j.mp/fax151129FairT)
sent to all service stations owners late last month threatened a $1.1
million fine if ethanol-blended petrol is not labelled octane 94 fuel. The
higher rating implies E10 is close to a premium grade, when it has a much
lower energy density and a much  higher sulphur content.

The move comes as the Baird government considers its next move to force
motorists to consume more ethanol. This is another attempt to boost
Manildra's sales. The monopoly ethanol producer is a major Liberal and
National party campaign donor.

Greens NSW MP John Kaye said: "The Baird government's Office of Fair
Trading is intimidating petrol stations into making ethanol-blended fuel
look like it is premium quality.

"The power of campaign donations and lobbying has trumped the rights of
consumers.

"While the Baird government's consumer watchdog has the black letter law on
its side, the timing of the decision to enforce a two-year-old labelling
standard is a measure of the success of the lobbying power of a major
political donor.

"Petrol stations are being forced to mislead motorist over the energy and
sulphur content of E10 in order to fatten up the profits of a major
campaign donor to the Liberals and Nationals.

"Labelling E10 with an octane rating of 94 implies it is a premium grade
fuel when it is anything but what motorists expect in terms of performance
and sulphur content.

"Generations of motorists have come to rely on octane rating as a measure
of  fuel energy density and suitability for advanced vehicles.

"The Baird government is exploiting that trust to cajole consumers into
purchasing the product of one of their largest campaign donors," Dr Kaye
said.

For more information: John Kaye 0407 195 455

Comment also available from: Mark McKenzie 0447 444 011. Mark is the CEO of
Australian Convenience and Petroleum Marketers Association.


BACKGROUND

Energy Content

Division 3 of the Fair Trading Regulation 2012 came into force on 1
September 2013. Section 12 requires on-the-pump display of the octane
rating of E10 fuel.

Regular unleaded petrol (RULP) has an octane rating of 91. When blended
with 10 percent ethanol to make E10, its energy density is even lower than
RULP.

However, because the octane numbers of different types of petrol sold in
Australia are determined by a method that measures engine knock properties
(Research Octane Number – RON), E10 has been required by the Office of Fair
Trading to be labelled as 94.

That places the lowest energy density liquid fuel on sale in most petrol
station just below the rating of the premium fuels, which begin are
generally 95 and 98. These fuels have much higher energy density than RULP.

While the Office of Fair Trading is technically correct, the Baird
government would also be aware that motorists interpret the octane number
as a measure of energy density and performance.

Sulphur Content

Owners of vehicles with advanced pollution reduction equipment also
purchase premium grade fuels to protect their catalytic converters.

Petrol with octane ratings 95 and 98 has less than 50 ppm sulphur.

Regular unleaded can have a sulphur content of up to 150ppm, as permitted
by the Commonwealth Fuel Quality Standards Act.

E10, made from blending RULP with 10 percent ethanol, can have a sulphur
content of 135 ppm, although 90 ppm is more typical of imported fuels.

E10 sulphur content is between 1.8 and 2.7 times the maximum level for
premium petrol.

Labelling E10 as a near-premium fuel implies it is appropriate for vehicles
which are not designed to withstand the higher sulphur content.

The Fair Trading fax  (available at http://j.mp/fax151129FairT)

The fax to all petrol stations in NSW was sent on 26 November and
threatened fines of up to $1.1 million for companies and $220,000 for
individuals who do not label E10 with octane rating of 94.

Manildra – monopoly supplier of ethanol in NSW and major campaign donor

Manildra is the monopoly manufacturer of ethanol in NSW. Its donations to
the three major parties exceed $4.3 million since 1998. Between 1 July 2010
and 30 June 2014, the NSW ethanol monopoly gave more than $532,000 to the
Liberals around Australia, $395,000 to the Nationals and $414,000 to Labor.

In the period 1 September 2014 to 30 September 2015, Manildra met with nine
ministers in 20 separate events.


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John Kaye
Greens NSW MP
phone: 0407 195 455
web: www.john.nsw.greens.org.au
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