Fuel tax cut will see huge numbers switch to biofuels

Nearly a third of New Zealanders say they will switch to using biofuels if the tax on them is reduced.

Large numbers will also look to buy a vehicle capable of running on 10% biofuel if the fuel is made cheaper with a tax cut.

Lowering biofuel petrol and diesel prices, by cutting road user taxes, is supported by 58%, according to a new national survey of 2851 New Zealanders.

A price cut of up to 10c per litre will trigger 29% of people to buy biofuels. A cut of more than 10c per litre will be needed to prompt a further 38% to start using them.

According to a ShapeNZ national online survey commissioned by the New Zealand Business Council for Sustainable Development, a biofuel price cut will influence the choice of next vehicle bought by 80% of people. (38% say cheaper biofuel petrol or diesel will influence them greatly to buy a biofuel capable vehicle. 42% say they would be influenced somewhat).

However, only 2% of those surveyed use biofuel now, and 66% don’t know if the vehicle they use most often can run on a 10% biofuel mix.

The tax incentive policy is being investigated by Government officials, to fill the gap left by December’s repeal of the law which required oil companies to sell 2.5% biofuels by 2012.

Business Council Chief Executive Peter Neilson says price incentives should work well to drive up sales of lower-emission biofuels.

There is also strong support for other policies, if offered by the Government, to:

• lower registration fees for low-emission, fuel-efficient vehicles (80% support)
• offer financial incentives to people to buy low emission, fuel efficient vehicles (74% support), and
• raise registration charges for high-emission, fuel-inefficient vehicles (52% support, 23% neutral, 17 oppose).

“A cut in road user taxes to boost biofuel sales will also sit well with a country in which 77% rate fuel prices as the most serious problem facing them and their families.

“The move would need to be accompanied by an information campaign so people can find out if their vehicles can use biofuels. The policy could have big and exciting implications for the fuel and vehicle industries,” Mr Neilson says.

“We’re going to need to do more than have an emissions trading scheme to help lower emissions – and fuel tax incentives are one complementary measure the public will take to heart.”

The ShapeNZ survey was conducted between February 9 and 11. It is weighted by age, gender, personal income, employment status, ethnicity and party vote 2008 to provide a nationally representative population sample. The maximum margin of error on the national sample is + or – 1.8%.

The full ShapeNZ biofuels survey report is available at www.nzbcsd.org.nz