Ethanol content in petrol will be capped at 10 per cent and all service stations will have to advertise ethanol levels at the bowser, under measures agreed yesterday by key federal ministers.
Most ethanol-blend petrol is sold in Sydney, but, unlike Victoria, NSW has no law requiring the content to be labelled.
The decisions, made at a specially convened meeting of cabinet's energy sub-committee, follow several months of fractious debate over the cost, environmental benefits and regulation of the fuel additive.
It is understood ministers have also agreed to oil company demands to mount a campaign to counter negative public perceptions of ethanol-blend petrol.
However, deep divisions remain in cabinet over the 38-cent-a-litre subsidy paid to ethanol producers, which is estimated to cost more than $150million a year.
National Party members, led by the Deputy Prime Minister, John Anderson, want the subsidy extended beyond its initial period, which expires in September.
Most of the ethanol produced in Australia comes from sugar and wheat grown in National Party electorates.
The Finance Minister, Nick Minchin, is believed to have argued strongly against extending the subsidy.
The Treasury has also warned that the cost to taxpayers of subsidising ethanol could blow out to several hundred million dollars as production rises.
Those arguments are expected to gain increasing currency as the Government puts the final touches to the May 13 budget, already under pressure from the costs of war and the drought.
However, ministers also see strong political reasons for retaining the subsidy. Its removal would mean a significant increase in the price of ethanol-blend petrol, reducing its appeal to motorists.
It would also kill plans by ethanol producers such as Manildra and CSR to build plants in crucial National Party electorates.
The decision to impose a 10 per cent cap on ethanol follows warnings from car manufacturers that a higher concentration of the additive could harm engines and void car warranties.
The issue of the subsidy and the parallel excise duty imposed on ethanol imports are now likely to be thrashed out by cabinet at its pre-budget meeting on Tuesday.
Ethanol has emerged as a politically volatile issue after the Federal Government issued a commitment in the 2001 election campaign to a greenhouse target of producing 350 million litres of biofuels by 2010.
Although ethanol, the most commonly available biofuel, has some proven effects in reducing greenhouse emissions, doubts over its effects on engines have bred strong consumer resistance.
A survey commissioned last year by the Herald found that independent service stations in Sydney were selling fuel containing up to 30 per cent ethanol.
A trial of 10 per cent ethanol-blend petrol at eight Brisbane service stations is believed to have seen a 20 per cent drop in sales.
The Environment Minister, David Kemp, is expected to announce the new measures in the next few days.
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You know, somebody actually complimented me on my driving today. They left a little note on the windscreen. It said, 'Parking Fine.'So that was nice.
Apparently the ethanol in petrol at a certant ratio itself is not that bad. It does not decrease the preformance of the car and makes the engine run cleaner and more efficient.
The problem with ethanol it absorbs water unlike petrol. This buggers up your engine.
An interesting experiment is to measure out 20ml of ethanol and 20ml of water and add them together. Now measure how much liquid there is...
When the government starts doing everything the opposition, media and other groups have asked it to do all along, I start to wonder where the catch is.
For the to suddenly turn 180 degrees on their policy makes me look for the rat!
I'm normally a Howard supporter, but I thinks I'm smelling a fish of some sort here
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Originally posted by Jonny An interesting experiment is to measure out 20ml of ethanol and 20ml of water and add them together. Now measure how much liquid there is...
So are you going to tell us what you get???
I think it's all well and good to advertise it, so at least you know it's in there. But you still will never know how much. I thinks once they start advertising it, their business will slow down as not many people want ethanol in their cars.
Originally posted by Jase_ELXR8 So are you going to tell us what you get???
I think it's all well and good to advertise it, so at least you know it's in there. But you still will never know how much. I thinks once they start advertising it, their business will slow down as not many people want ethanol in their cars.
Basically less than the expected 40ml of liquid, the water is 'absorbed' by the alcohol
The main Fuel places dont use it and have No Ethanol stickers under the fuel name. But places like Bogas and Burmah since i can remeber have always had it displayed the fuel containes ethanol.
Ethanol is required to increase the Octane rating of petrol. If you use normal ULP, it is more than likely that it would not conatin ethanol. Effectively it is added to ULP to increase the octane rating to make PULP. And at the moment, there is not enough ethanol in Australia to make all PULP from it. But it will probably be the major additive in the next 5 to 10 years, as production and acceptance of ethanol increases.
I'm sure there are servos out there that don't give two hoots about 'ethanoling' down their petrol, as the tax on ethanol is cheaper than petrol. If you do need to use the cheap stuff, limit it to 1/2 a tank, mixed with 1/2 a tank of 'good' stuff. That way the ethanol content would be no more than 15%, and more than likely would be around 10%, which is the level that the manufacturers agree is not harmful.
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