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Fuel Quality Standards (Renewable Content of Motor Vehicle Fuel) Amendment Bill 2005
Schedule 1 —Amendment of the Fuel Quality Standards Act 2000

1  After Part 2

Insert:

Part 2A—Renewable fuel

Division 1—Preliminary

29A  Overview of this Part

This Part sets out a regulatory regime in relation to the inclusion of cellulosic biomass ethanol and other renewable fuel in fuel supplied for use in motor vehicles in Australia.

Division 2 establishes an office of Renewable Fuel Program Administrator and sets out the functions of that office.

Division 3 deals with the requirements for the inclusion of cellulosic biomass ethanol or other renewable fuel.

Division 4 deals with reporting requirements.

29B  Definitions

In this Part:

Administrator means the Renewable Fuel Program Administrator appointed under section 29C.

cellulosic biomass ethanol means ethanol derived from any lignocellulosic or hemicellulosic matter that is available on a renewable or recurring basis, including:

                     (a)  agricultural grain and sugarcane; or

                     (b)  wood and wood residues; or

                     (c)  plants; or

                     (d)  grasses; or

                     (e)  agricultural residues; or

                      (f)  fibres; or

                     (g)  animal wastes and other waste materials; or

                     (h)  municipal solid waste.

existing refinery means a fuel plant or refinery in existence on the date of commencement of this Part or planned or under construction at the date of commencement of this Part and at a stage of development where, in the opinion of the Administrator, the provisions of this Part would substantially affect the financial circumstances of the plant or refinery or those holding an interest in the plant or refinery.

motor vehicle fuel has the meaning given by the regulations.

Reid Vapour Pressure means the absolute vapour pressure of a volatile organic liquid measured by methods approved by a relevant State or Territory authority.

relevant State or Territory authority means a body established by a State or Territory government and prescribed by the regulations as a relevant authority for the purposes of this Part.

renewable fuel means motor vehicle fuel that:

                     (a)  is produced from grain, sugarcane, starch, oilseeds or other similar biomass; or

                     (b)  is natural gas produced from a biogas source, including a landfill, sewage waste treatment plant, feedlot, or other place where decaying organic material is found; and

                     (c)  is used to replace or reduce the quantity of fossil fuel present in a fuel mixture used to operate a motor vehicle.

Division 2—Renewable Fuel Program Administrator

29C  Appointment of Renewable Fuel Program Administrator

             (1)  Within six months of the commencement of this Part, the Minister must appoint, by written instrument, a person to be the Renewable Fuel Program Administrator (the Administrator ).

             (2)  A person may be appointed Administrator for a period of five years and may be re-appointed.

             (3)  An instrument under subsection (1) is a disallowable instrument for the purposes of section 42 of the Legislative Instruments Act 2003 .

29D  Functions of the Renewable Fuel Program Administrator

             (1)  In addition to any functions conferred by this Part, the Renewable Fuel Program Administrator has the following functions:

                     (a)  overseeing the operation of the requirements of this Part, including enforcement under the provisions of Part 3 of this Act; and

                     (b)  approval of prices to be paid to each of the producers and processors in the cellulosic biomass ethanol production and marketing chain as prescribed in the regulations; and

                     (c)  approval of the composition and source of blends of renewable and fossil fuel as prescribed in the regulations; and

                     (d)  issuing and approving the sale, transfer and use of renewable fuel credits under section 29H.

             (2)  Any prices approved under paragraph (1)(c) must be set out in a written instrument which is a disallowable instrument for the purposes of section 42 of the Legislative Instruments Act 2003 .

Division 3—Renewable Fuel Program

29E  Supply of motor vehicle fuel

             (1)  A person is guilty of an offence if:

                     (a)  the person supplies motor vehicle fuel in Australia that is the subject of regulations made under section 29F or 29I; and

                     (b)  the person is a constitutional corporation or a Commonwealth entity or the person supplies the fuel in the course of constitutional trade or commerce; and

                     (c)  the motor vehicle fuel does not comply with the regulations; and

                     (d)  the supply is not in order to comply with a direction or order under an emergency law.

Maximum penalty: 10,000 penalty units.

Note:          Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.

             (2)  However, the person is not guilty of the offence if the person believes on reasonable grounds that the motor vehicle fuel that is supplied will be further processed for the purpose of bringing the fuel into compliance with the regulations.

Note:          A defendant bears an evidential burden in relation to the matter in subsection (2): see subsection 13.3(3) of the Criminal Code .

29F  Requirements for renewable fuel

             (1)  The volume percentage of cellulosic biomass ethanol or other renewable fuel which is to be included in motor vehicle fuel supplied for use in Australia is prescribed by the regulations and is to commence within one year from the date of commencement of this Part.

             (2)  Regulations under subsection (1) must include a schedule setting out different percentages to apply at different dates. The schedule must include provision for the required volume percentage to be at least 4% from 1 July 2006, at least 7% from 1July 2009 and at least 10% from 1 July 2012.

             (3)  Details of how the percentage required is to be measured and applied by any person involved in the production or dispensing of motor vehicle fuel is prescribed in the regulations.

29G  Matters to be taken into account before regulations made

                   Before the Governor-General makes a regulation under section 29F:

                     (a)  the Minister must take into consideration:

                              (i)  the available supply of cellulosic biomass ethanol and other renewable fuels; and

                             (ii)  any potential unfair effect on existing refineries; and

                            (iii)  any seasonal variations in the use of renewable fuels; and

                            (iv)  the report, including any recommendations, of the Administrator prepared under section 29K or any other recommendations of the Administrator; and

                     (b)  the Minister must be satisfied that the Reid Vapour Pressure of the motor vehicle fuel will be at an acceptable level and, if appropriate, alternative blending, storage or other arrangements may be included in the regulations.

29H  Renewable Fuel Credits

             (1)  Refineries, blenders or importers of motor vehicle fuel may be given credits for the production or sale of motor vehicle fuel that contains a quantity of renewable fuel greater than the quantity required by the regulations in effect at the time of production, importation or sale.

             (2)  In accordance with arrangements prescribed in the regulations, credits received under subsection (1) in a financial year may be counted in assessing compliance with the regulations made under section 29F or 29I applying in the following financial year or other period prescribed in the regulations.

             (3)  Credits received under subsection (1) may be transferred or sold to another person.

             (4)  The regulations may provide that receipt or purchase of credits under subsection (1) can be used to offset a failure to comply with a requirement which occurred in a previous year.

29I  Variation of requirements for different areas

             (1)  The regulations may specify a different volume percentage of renewable fuel to apply in respect of supplies of motor vehicle fuel in specified areas of Australia.

             (2)  Regulations under subsection (1) must not:

                     (a)  give preference (within the meaning of section 99 of the Constitution) to one State or part of a State over another State or part of a State; and

                     (b)  have an effect equivalent to a value of more than 2% of the annual motor vehicle fuel sales in Australia.

             (3)  Before the Governor-General makes a regulation under subsection (1), the Minister must consult with the Administrator and be satisfied that the variation is necessary as a remedy for hardship or similar special circumstances.

29J  Supplies of motor vehicle fuel to be accompanied by documentation

                   If:

                     (a)  a person (the supplier ) supplies motor vehicle fuel in Australia to another person and the fuel is subject to regulations under section 29F or 29I; and

                     (b)  the supplier is a constitutional corporation or a Commonwealth entity or the supplier supplies the motor vehicle fuel in the course of constitutional trade or commerce; and

                     (c)  the other person is not the end-user of the motor vehicle fuel;

the supplier must, within the period prescribed by the regulations, provide the other person with a document or documents containing:

                     (d)  a statement as to whether or not the motor vehicle fuel complies with the regulations; and

                     (e)  any other information relating to the motor vehicle fuel that is prescribed by the regulations.

Maximum penalty: 60 penalty units.

Note:          Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.

Division 4—Record keeping and reports

29K  Initial report by Administrator

             (1)  Within 6 months of the commencement of this Part, the Administrator must prepare a report on the likely impact of this Part on the motor vehicle fuel market in Australia, including:

                     (a)  any likely adverse impact on consumers; and

                     (b)  an evaluation of renewable fuel supplies and prices, blendstock supplies and supply and distribution capabilities.

             (2)  The Minister must have regard to the report, including any recommendations of the Administrator, before the Governor-General makes regulations under section 29F or 29I.

29L  Annual report by Administrator on use of renewable fuels

             (1)  The Administrator must, as soon as practicable after the end of each financial year (commencing after 30 June 2005), prepare and give to the Minister, a report setting out for each State, Territory or area covered by specific regulations, the market share of:

                     (a)  fuel containing ethanol; and

                     (b)  fuel containing other renewable fuel;

and any other matters prescribed in the regulations.

             (2)  The Minister must cause a copy of the report to be laid before each House of the Parliament within 15 sitting days of the day on which the report is given to the Minister.

29M  Record keeping

             (1)  If:

                     (a)  a person supplies motor vehicle fuel in Australia that is the subject of regulations under section 29F or 29I; and

                     (b)  the person is a constitutional corporation or a Commonwealth entity or the person supplies the fuel in the course of constitutional trade or commerce;

the person must keep and maintain records in relation to such supplies in accordance with the regulations.

Maximum penalty: 60 penalty units.

Note:          Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.

             (2)  This offence is one of strict liability.

Note:          For strict liability , see section 6.1 of the Criminal Code .

29N  Annual statements

Producers

             (1)  If:

                     (a)  a person produces and supplies motor vehicle fuel in Australia during a calendar year; and

                     (b)  the fuel is the subject of regulations under section 29F or 29I; and

                     (c)  the person is a constitutional corporation or a Commonwealth entity or the person supplies the fuel in the course of constitutional trade or commerce;

the person must provide an annual statement for the year.

Importers

             (2)  If:

                     (a)  a person imports motor vehicle fuel into Australia, and supplies the fuel in Australia, during a calendar year; and

                     (b)  the fuel is the subject of regulations under section 29F or 29I;

the person must provide an annual statement for the year.

When statement to be provided

             (3)  The statement must be provided on or before:

                     (a)  14 February in the following year; or

                     (b)  any later day allowed by the Administrator.

Content of statement

             (4)  The statement must:

                     (a)  be in a form (which may be an electronic form) approved by the Administrator; and

                     (b)  contain any information required by the Administrator; and

                     (c)  be provided to the Administrator in accordance with the regulations.

Offence

             (5)  A person is guilty of an offence if the person contravenes a requirement of this section.

Maximum penalty: 60 penalty units.

Note:          Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.

             (6)  This offence is one of strict liability.

Note:          For strict liability , see section 6.1 of the Criminal Code .

2  After subsection 72(1)

Insert:

          (1A)  A review conducted before the second anniversary of Part 2A of this Act does not need to include the operation of Part 2A.