PM Transcripts

There is a strong view in the community that Australia should move towards increased biofuels use to encourage sustainable energy sources for fuel for the future.
As part of the Government';s strategy to encourage the use of biofuels in transport over time, I announce today that the Government will remove the current fuel tax exemption on ethanol and will provide a producer subsidy for the next 12 months to domestic ethanol producers. This short-term production subsidy will provide a targeted means of maintaining the use of biofuels in transport in Australia, while longer term arrangements are considered by the government regarding the future of the emerging renewable energy industry.
The biofuels industry depends on Australian agricultural production for its feedstock and builds on expertise in Australia';s agricultural industries.
An excise (and related customs duty) is to be imposed on ethanol used in petrol at the rate currently applying to petrol (38.143 cents per litre). The government will also be providing a production subsidy of 38.143 cents per litre for ethanol used in petrol. This subsidy is to be paid to producers of ethanol in Australia, and will be administered by the Department of Industry, Tourism and Resources (DITR). DITR will be in contact with Australian ethanol producers as soon as possible concerning arrangements for the payment of the subsidy. The subsidy scheme and the excise and customs changes will take effect from midnight on Tuesday 17 September.