The Government’s decision to scrap the biofuels mandate is a win for cash-short Kiwis, the Motor Trade Association says.

Prime Minister Chris Hipkins today announced the biofuels mandate will not proceed.

“The mandate would have increased the price of fuel, and given the pressure on households that’s not something I’m prepared to do,” he said in making the announcement.

The effect on households was an issue MTA foreshadowed in its submission on the Sustainable Biofuels Obligation Bill last month.

“The obligation, and its implications for the importation of biofuels, at least in the short to medium term, will increase the fuelling costs motorists face. Budget constrained households will be disproportionately affected,” MTA wrote in the submission.

“Such households are more likely to already experience higher fuelling costs as they predominantly own older, less fuel-efficient vehicles compared with the average age of New Zealand’s fleet.

“The obligation is estimated to increase fuel prices by 5 to 10 cents per litre – adding further strain to budget-constrained households … Reduced energy affordability diminishes New Zealand’s public ability - more specifically the ability of low-income and budget-constrained households, to participate in society, for instance, their ability to commute to work and school affordably.”

Notwithstanding today’s decision, MTA recognises the need for pragmatic action to address climate change and that the sector has a key role to play to achieve targets.

MTA wants to ensure the industry can innovate and diversify in a way that New Zealand can leverage all available low emission technologies and work towards a ‘net’ zero emissions future.

• The Motor Trade Association (Inc) (MTA) was founded in 1917. MTA currently represents approximately 3,800 businesses within the New Zealand automotive industry and its allied services.Members of our Association operate businesses including automotive repairers (both heavy and light vehicle),collision repair,service stations, vehicle importers and distributors and vehicle sales. The automotive industryemploys 57,000New Zealandersand contributesaround $3.7billionto the New Zealand economy.

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