BIOFUELS EXEMPTIONS FRAMEWORK AND GUIDELINES 1. …€¦ · retailers must meet the requirements...

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Page 1 of 11 BIOFUELS EXEMPTIONS FRAMEWORK AND GUIDELINES 1. BACKGROUND 1.1 PURPOSE These Guidelines are intended to provide information about the exemptions framework that applies under the Biofuels Act 2007 and about how the Expert Panel and the Secretary of the Department of Finance, Services and Innovation may apply the exemption provisions in the Biofuels Act and in the Biofuels Regulation (No 2) 2016. The Guidelines do not limit nor expand the range of circumstances that may justify the grant of an exemption. The Guidelines provide information about the approach that will generally be taken to exemption applications, but each exemption application will be considered in relation to its own facts and circumstances. 1.2 WHAT ARE THE BIOFUELS LAWS? On 1 January 2017 new biofuels laws commenced in New South Wales. All volume fuel retailers are now required to comply with the new laws, unless they hold an exemption or have applied for an exemption. 1.2.1 The biofuels requirements The amended Biofuels Act and the Biofuels Regulation (No 2) 2016 state that volume fuel retailers must meet the requirements set out below: ensure that a petrol-ethanol blend is made available at each of the volume fuel retailer’s volume fuel service stations (section 8 of the Act) ensure that, at each of a volume fuel retailer’s volume fuel service stations, petrol -ethanol blend is made as accessible to the customer as any other type of petrol (clause 8 of the Regulation) ensure that, at a minimum, six per cent of the total volume of petrol they sell is ethanol (in petrol-ethanol blend) (section 6 of the Act) ensure that, at a minimum, two per cent of the volume of all diesel sold is biodiesel 1 (section 7 of the Act) Those four requirements are referred to in this document as the minimum biofuels requirements or the biofuels mandate. The requirement to make petrol-ethanol blend as accessible as any other type of petrol will be taken to mean that, at all volume fuel service stations operated by a volume fuel retailer, petrol- ethanol blend is made at least as accessible to retail customers as regular unleaded (91) petrol. 1 Only ethanol or biodiesel that complies with one of the sustainability standards prescribed in clause 5 of the Biofuels Regulation (No. 2) 2016 can be counted towards the percentage of ethanol or biodiesel sold.

Transcript of BIOFUELS EXEMPTIONS FRAMEWORK AND GUIDELINES 1. …€¦ · retailers must meet the requirements...

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BIOFUELS EXEMPTIONS FRAMEWORK AND GUIDELINES

1. BACKGROUND

1.1 PURPOSE

These Guidelines are intended to provide information about the exemptions framework that

applies under the Biofuels Act 2007 and about how the Expert Panel and the Secretary of the

Department of Finance, Services and Innovation may apply the exemption provisions in the

Biofuels Act and in the Biofuels Regulation (No 2) 2016.

The Guidelines do not limit nor expand the range of circumstances that may justify the grant of

an exemption. The Guidelines provide information about the approach that will generally be taken

to exemption applications, but each exemption application will be considered in relation to its own

facts and circumstances.

1.2 WHAT ARE THE BIOFUELS LAWS?

On 1 January 2017 new biofuels laws commenced in New South Wales.

All volume fuel retailers are now required to comply with the new laws, unless they hold an

exemption or have applied for an exemption.

1.2.1 The biofuels requirements

The amended Biofuels Act and the Biofuels Regulation (No 2) 2016 state that volume fuel

retailers must meet the requirements set out below:

• ensure that a petrol-ethanol blend is made available at each of the volume fuel retailer’s

volume fuel service stations (section 8 of the Act)

• ensure that, at each of a volume fuel retailer’s volume fuel service stations, petrol-ethanol

blend is made as accessible to the customer as any other type of petrol (clause 8 of the

Regulation)

• ensure that, at a minimum, six per cent of the total volume of petrol they sell is ethanol (in

petrol-ethanol blend) (section 6 of the Act)

• ensure that, at a minimum, two per cent of the volume of all diesel sold is biodiesel1

(section 7 of the Act)

Those four requirements are referred to in this document as the minimum biofuels requirements

or the biofuels mandate.

The requirement to make petrol-ethanol blend as accessible as any other type of petrol will be

taken to mean that, at all volume fuel service stations operated by a volume fuel retailer, petrol-

ethanol blend is made at least as accessible to retail customers as regular unleaded (91) petrol.

1 Only ethanol or biodiesel that complies with one of the sustainability standards prescribed in clause 5 of the Biofuels

Regulation (No. 2) 2016 can be counted towards the percentage of ethanol or biodiesel sold.

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This will be determined on an objective basis by comparing the numbers of nozzles of petrol-

ethanol blend and regular unleaded petrol, respectively.

If the volume fuel service station does not offer regular unleaded petrol for retail sale, the

availability of a petrol-ethanol blend (that is, at least one nozzle) will be considered sufficient to

establish compliance.

A volume fuel retailer is:

• a person who operates or controls the operation of a volume fuel service station, or

• a person who operates or controls the operation of 20 or more service stations, where none

of those are volume fuel service stations.

A volume fuel service station is a service station at which:

• three or more types of petrol or diesel are sold and

• the total volume of petrol and diesel (combined) sold at the service station exceeds

900,000 litres per quarter in two consecutive quarters.

1.2.2 Reporting requirements

The Biofuels Act also requires any person who carries on the business of a primary wholesaler or

who operates or controls the operation of a service station to register as a primary wholesaler, a

volume fuel retailer or an operator of a service station.

Volume fuel retailers and primary wholesalers are also required to provide a return to the

Secretary within one month after the end of each quarter. The Secretary may also require service

station operators who are not volume fuel retailers to provide a return.

Returns must provide the following information about the sales of petrol and diesel during the

preceding quarter:

• the total volume of petrol sold (including petrol-ethanol blend)

• the total volume of ethanol sold

• the total volume of diesel fuel sold (including biodiesel blend)

• the total volume of biodiesel sold

• for a volume fuel retailer, the number of the retailer’s service stations at which petrol-

ethanol blend is available, how many of those service stations are volume fuel service

stations and how many bowsers and nozzles are available for delivery of petrol-ethanol

blend at each of those service stations

• for a volume fuel retailer, the number of the retailer’s service stations at which regular

unleaded petrol is available, how many of those service stations are volume fuel service

stations and how many bowsers and nozzles are available for the delivery of regular

unleaded petrol at each of those service stations.

The Biofuels Act also requires a person required to provide the above information to keep such

records as will enable them to provide the information, and to keep these in accordance with the

regulations for seven years.

The exemptions regime does not apply to the obligations to provide the above information and

keep appropriate records.

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2. COMPLIANCE WITH THE BIOFUELS REQUIREMENTS

If a volume fuel retailer does not comply with the requirement to offer a petrol-ethanol blend at

every volume fuel service station, or the requirement to make the petrol-ethanol blend as

accessible as regular unleaded, or a requirement to sell the required percentage of ethanol or

biodiesel, the retailer must either:

1. establish a defence set out in section 9A(2) of the Act, or

2. hold an exemption from one or more of the requirements.

2.1 Defences to prosecution for failure to comply

Section 9A(2) of the Biofuels Act and clause 9(3) of the Biofuels Regulation provide that it is a

defence to a prosecution for failure to comply with a biofuels requirement if the retailer proves

that:

1. the retailer has taken the steps set out in the regulations to comply, or

2. the retailer has otherwise taken all reasonable steps to comply, or

3. in the case of offering a petrol-ethanol blend and making it as accessible as regular

unleaded petrol (section 8 of Act and clause 8 of Regulation), because:

a. the retailer, despite their best efforts, has not been able to secure finance to install

or upgrade infrastructure at the service station as necessary to comply,

b. the capital costs of installing or upgrading infrastructure at the service station, or, if

the service station is in a remote or regional area, the recurrent costs transporting

petrol-ethanol blend to the service station (or a combination of those costs) were

such that it was not economically viable to offer petrol-ethanol blend, taking into

account the price that would have to be charged to cover the costs, or

4. in the case of the requirement to sell a minimum of six per cent ethanol or offer a petrol-

ethanol blend, at the time of the alleged offence it was not economically viable for the

retailer to comply:

a. because the wholesale price of ethanol for use in the production of petrol-ethanol

blend exceeded the reasonable wholesale price determined by IPART under

section 17A(1)(a), or

b. because of the price at which the retailer was reasonably able to produce or obtain

petrol-ethanol blend for retail sale, or

c. on any other grounds.

5. in the case of the requirement to sell a minimum of two per cent biodiesel, at the time of the

alleged offence it was not economically viable for the retailer to comply:

a. because of the price at which the retailer was reasonably able to produce or obtain

biodiesel blend for retail sale, or

b. on any other grounds.

2.2 Exemption from the biofuels requirements

The Biofuels Act and Regulation set out a number of grounds for exemption from the biofuels

requirements. These are examined in the next section.

3. EXEMPTIONS FROM THE BIOFUELS REQUIREMENTS

3.1 THE EXEMPTIONS PROCESS

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3.1.1 Prospective or retrospective

Exemptions can be prospective or retrospective. Prospective exemptions are preferable and

provide certainty for a volume fuel retailer.

3.1.2 Exemption duration

The Biofuels Act provides for exemptions to be granted for an indefinite period or for a specified

period. However, in practice the Panel should consider exemptions up to a maximum of two

years in duration.

Where the retailer is already complying with section 8 of the Act by offering a petrol-ethanol blend

at their volume fuel service stations, exemptions will ordinarily be granted for a 12 month period

from the date of granting the exemption.

Where the retailer is not complying with section 8 of the Act — that is, failing to offer a petrol-

ethanol blend at volume fuel service stations — then the exemption will typically be granted for a

six month period from the date of granting the exemption.

However, there may be exceptions to the above guide, if the Secretary is satisfied, having

considered all relevant factors including any advice given by the Expert Panel, that an exemption

should be granted for a period that is more or less than the applicable 12 or six month period.

Relevant factors which may satisfy the Secretary that a grant of an exemption period more than

the prescribed ordinary period is required can include, but are not limited to:

• Where the cost of upgrading infrastructure made it not economically viable to comply

because an existing underground storage tank unsuitable for storing ethanol has not

exhausted its service life cycle

• Where the cost of upgrading infrastructure made it not economically viable to comply

because an existing underground storage tank would not for any other reason be

replaced or upgraded, except in compliance with the Biofuels Act.

Two years is the maximum period for an exemption granted in order to allow a person time to

take steps to comply with a biofuel requirement. There is no statutory limit on the number of

times an exemption can be renewed after the expiry of a previously granted exemption.

3.1.3 Conditions

An exemption can be granted subject to conditions. It is an offence under section 9B(3A) of the

Biofuels Act to contravene a condition of an exemption.

3.1.4 Partial exemptions

An exemption can be granted as a partial exemption specifying a percentage that is less than the

six per cent ethanol percentage or the two per cent biodiesel percentage.

3.1.5 Variation or revocation of an exemption

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The Secretary may vary or revoke an exemption or a condition of an exemption at any time by

notice in writing to the volume fuel retailer concerned.

3.1.6 The Biofuels Expert Panel

The Secretary may not grant an exemption or vary or revoke an exemption unless the proposed

exemption, variation or revocation has been referred to the Biofuels Expert Panel and the

Secretary has considered the advice of the Panel. The Expert Panel meets at least quarterly to

consider applications and provide advice to the Secretary.

The Expert Panel is currently chaired by the Commissioner for Fair Trading and includes expert

representatives from government and the petroleum and biofuels industries.

3.1.7 How to apply

Exemption applications may be made via the online forms approved by the Secretary, or by email

to [email protected] and accompanied by any required information. A link to the

online process is available on the NSW Fair Trading website and is linked to a service station

operator’s registration for FuelCheck.

Exemption applications for the following quarter should be lodged at the same time quarterly

returns are submitted – that is, within one month after the end of the previous quarter.

3.1.8 Timeframes

The Department of Finance, Services and Innovation will aim to ensure that a final decision on an

exemption application is made within 90 days of its receipt.

3.2 GROUNDS FOR EXEMPTIONS

A volume fuel retailer may apply to the Secretary for an exemption from a biofuels requirement

on the following grounds:

1. In the case of an exemption from the requirement to offer a petrol-ethanol blend and

make it as accessible as other types of petrol, it is not economically viable for the retailer

to comply because:

a. the retailer, despite their best efforts, has not been able to secure finance to

install or upgrade infrastructure

b. the capital costs of installing or upgrading infrastructure made it not economically

viable to comply, taking into account the price that would have to be charged for

the petrol-ethanol blend to recover those costs

c. if the service station is in a remote or regional area, the recurrent costs of

transporting petrol-ethanol blend to the service station made it not economically

viable to comply, taking into account the price that would have to be charged for

the petrol-ethanol blend to recover those costs

d. the combination of the costs of infrastructure upgrades and recurrent transport

costs (for stations in a remote or regional area) made it not economically viable

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to comply, taking into account the price that would have to be charged for the

petrol-ethanol blend to recover those costs, or

2. In the case of an exemption from the requirement to sell six per cent ethanol, the retailer

has taken all of the following steps prescribed in the Biofuels Regulation:

a. taking all reasonable action to upgrade the retailer’s infrastructure to enable it to

distribute sufficient petrol-ethanol blend to ensure compliance

b. taking all reasonable action to ensure the availability of facilities for the sale of

petrol-ethanol blend at the retailer’s service stations

c. making all reasonable efforts (on a continuing basis) to secure sufficient supplies

of ethanol or petrol-ethanol blend to comply

d. taking all reasonable action (on a continuing basis) to market petrol-ethanol blend,

including by ensuring that at each service station at which E10 is sold, the price of

E10 is conspicuously displayed on a sign alongside the price of other fuels

e. taking all reasonable action (on a continuing basis) to ensure that all E10 sold by

the retailer contains at least nine per cent ethanol, or

3. In the case of an exemption from the requirement to sell two per cent biodiesel, the

retailer has taken steps mirroring (a) to (d) above to comply, or

4. The retailer has otherwise taken all reasonable steps to comply with the biofuels

requirements, or

5. In the case of an exemption from the requirement to sell six per cent ethanol or offer a

petrol-ethanol blend, it is not economically viable for the retailer to comply:

a. because the wholesale price of ethanol exceeded the reasonable wholesale price

determined by IPART

b. because of the price at which the retailer was reasonably able to produce or obtain

petrol-ethanol blend for retail sale

c. on any other grounds, or

6. In the case of the requirement to sell a minimum of 2 per cent biodiesel, it is not

economically viable to comply:

a. because of the price at which the retailer is reasonably able to produce or obtain

biodiesel blend for retail sale, or

b. on any other grounds, or

7. In the case of any of the biofuels requirements:

a. that an exemption is reasonable to allow the retailer a period within which to take

the steps required to establish a defence for failure to comply

b. that compliance may result in a risk to public health and safety, or

c. that there are other extraordinary circumstances justifying the grant of the

exemption.

3.3 REQUIREMENTS FOR EXEMPTION APPLICATIONS

3.3.1 General documentation requirements

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In order to avoid retailers being required to attach large quantities of documentation to exemption

applications, volume fuel retailers will be asked to declare certain facts that support the

application, but generally will not be asked to attach supporting documentation.

Retailers are, however, required to either hold or be able to readily obtain the relevant

documentation to support the facts stated in their exemption application. NSW Fair Trading may

carry out spot checks to check the claims made in exemption applications, and may request

production of supporting documentation in particular cases.

All potential grounds for exemption, and requests for exemption from different elements of the

mandate, can be addressed in a single application.

3.3.2 Exemption from the requirement to offer a petrol-ethanol blend and make it as

accessible as other types of petrol on the grounds that it is not economically viable

for the retailer to comply because:

a. the retailer, despite their best efforts, has not been able to secure finance

to install or upgrade infrastructure

b. the capital costs of installing or upgrading infrastructure made it not

economically viable to comply, taking into account the price that would

have to be charged for the petrol-ethanol blend to recover those costs.

The requirement to make petrol-ethanol blend as accessible as any other type of petrol will be

taken to mean that, at all volume fuel service stations operated by a volume fuel retailer, petrol-

ethanol blend is made at least as accessible to retail customers as regular unleaded (91) petrol.

If the volume fuel service station does not offer regular unleaded petrol for retail sale, the

availability of a petrol-ethanol blend will be considered sufficient to establish compliance.

An exemption on the basis of inability to secure finance for infrastructure costs or excessive costs

for infrastructure upgrades will only be considered in relation to the most cost-effective means of

compliance with the biofuels requirements at that site. For example, flushing out an existing tank

and using it to supply a petrol-ethanol blend would be a more cost effective means of

compliance, where this is possible, than installing a new tank. It will be up to the retailer’s

discretion to decide which product to replace with petrol-ethanol blend, if the retailer chooses this

means of compliance.

The retailer will therefore be asked to explain whether the use of existing tanks to offer a petrol-

ethanol blend is possible and which aspects of the infrastructure at the service station will need

to be upgraded to comply with the biofuels requirements. Where the age and other details of the

manufacture of underground tanks cannot reasonably be determined, the retailer should

investigate options for tank replacement. The risk of environmental contamination due to biofuels

being stored in older underground tanks should be carefully considered by both the retailer and

the Expert Panel. There should be a presumption in favour of granting exemptions where a risk

of environmental contamination is identified.

The retailer will also be asked about the terms of any franchise or commission agent agreement

they are a party to, in particular how the cost of infrastructure upgrades due to regulatory

changes would be apportioned. If the costs are to be borne by someone other than the volume

fuel retailer, then it is unlikely the retailer will receive an exemption on the grounds of finance for

or costs of infrastructure upgrades.

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In the case of an exemption for inability to obtain finance, the retailer will be asked to obtain two

quotes for finance and provide a declaration that either the finance applications were rejected or

finance was offered on unaffordable terms. The retailer may be asked to provide documentary

evidence to support the declaration.

For an exemption on the grounds that the costs of installing or upgrading infrastructure make

compliance economically unviable, the retailer will be asked to provide a declaration containing

information about the retailer’s net average annual profit for the last two year period. The retailer

will also be asked to obtain two quotes for the necessary infrastructure changes and provide a

declaration about these quotes. The retailer may be asked to provide evidence to support these

declarations.

If the cost of upgrades is more than 25 per cent of average net annual profit over the last two-

year period, the Panel will closely consider providing an exemption, especially if the retailer is a

small business. The retailer will also be asked to provide any further information which may

assist the Panel to determine whether an exemption is appropriate. This could include

information about the retailer’s long and short term assets and liabilities.

3.3.3 Exemption from the requirement to offer a petrol-ethanol blend and make it as

accessible as other types of petrol on the ground that it is not economically viable

for the retailer to comply because:

c. if the service station is in a remote or regional area, the recurrent costs of

transporting petrol-ethanol blend to the service station made it not economically

viable to comply, taking into account the price that would have to be charged for

the petrol-ethanol blend to recover those costs.

For an exemption from the requirement to offer a petrol-ethanol blend on this ground, the retailer

will be asked to provide a declaration about the costs of transporting ethanol or petrol-ethanol

blend to the service station from the closest available source, without breaching the terms of

existing supply contracts by seeking supply elsewhere.

3.3.4 Exemption from the requirement to offer a petrol-ethanol blend and make it as

accessible as other types of petrol on the ground that it is not economically viable

for the retailer to comply because:

d. the combination of the costs of infrastructure upgrade and recurrent transport

costs (for stations in a remote or regional area) made it not economically viable

to comply, taking into account the price that would have to be charged for the

petrol-ethanol blend to recover those costs.

The retailer will be asked to provide the information referred to in 3.3.2 and 3.3.3 above.

3.3.5 Exemption from requirement to sell a minimum of six per cent ethanol on the basis

that the retailer has taken all the steps in clause 9(1) of the Biofuels Regulation (No

2) 2016

Step 1 – taking all reasonable action to upgrade the retailer’s infrastructure to enable it to

distribute sufficient petrol-ethanol blend to ensure compliance

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The retailer will need to declare that it has provided tanks and bowsers capable of holding and

delivering petrol-ethanol blend. This may include replacement of a tank if necessary.

If the retailer has an exemption from the requirement to make petrol-ethanol blend available at all

of the retailer’s volume fuel service stations, information about this exemption must be provided.

Step 2 - taking all reasonable action to ensure the availability of facilities for the sale of petrol-

ethanol blend at the retailer’s service stations

The retailer will be asked to declare that it has provided tanks, bowsers and nozzles for delivering

petrol-ethanol blend to retail customers, and that it has complied with the requirement to make

petrol-ethanol blend as accessible as regular unleaded (91) petrol at the service station.

When assessing compliance with this requirement, the Expert Panel should use FuelCheck to

find out whether E10 and/or E85 is being offered, as well as information about the number of

bowsers and nozzles in the retailer’s quarterly return.

If the retailer has an exemption from the requirement to make petrol-ethanol blend available at all

of the retailer’s volume fuel service stations, information about this exemption must be provided.

Step 3 - making all reasonable efforts (on a continuing basis) to secure sufficient supplies of

ethanol or petrol-ethanol blend to comply

The retailer will be asked to declare that it is making these efforts on an ongoing basis.

This claim may be checked against data on FuelCheck, which shows petrol-ethanol blend being

offered, and the quarterly returns showing the amount of ethanol sold, along with the number of

bowsers and nozzles.

If a petrol-ethanol blend is not being offered at the retailer’s volume fuel service stations, and the

retailer does not hold an exemption from the requirement to offer a petrol-ethanol blend, the

retailer will need to provide evidence that it has attempted and continues to attempt to obtain

sufficient ethanol or petrol-ethanol blend and an explanation of why a petrol-ethanol blend is not

being offered.

The retailer is expected to be able to provide evidence of supply contracts or supply quotes if

requested, but is not expected to breach the terms of existing supply contracts by seeking supply

elsewhere.

Step 4 - taking all reasonable action (on a continuing basis) to market petrol-ethanol blend,

including by ensuring that at each service station at which E10 is sold, the price of E10 is

conspicuously displayed on a sign alongside the price of other fuels

The retailer will be asked to declare that the price of E10 is conspicuously displayed on a price

board so that it is as prominent as the prices of other fuels and complies with the Fair Trading

Regulation 2012.

The retailer will also be asked to declare that it is taking other reasonable steps to market petrol-

ethanol blend, and outline what these steps are.

Step 5 - taking all reasonable action (on a continuing basis) to ensure that all E10 sold by the

retailer contains at least nine per cent ethanol

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A retailer will be asked to declare that they have taken all reasonable action to satisfy themselves

that the product they obtain and sell that purports to be E10 contains at least nine per cent

ethanol and complies with one of the sustainability standards prescribed in the regulation.

3.3.6 Exemption from requirement to sell a minimum of two per cent biodiesel on the

basis that the retailer has taken all the steps in clause 9(1)(a)-(d) of the Biofuels

Regulation (No 2) 2016

A biodiesel blend that contains up to five per cent biodiesel in Australia does not need to be

labelled as biodiesel and can be labelled and marketed simply as diesel. Accordingly, any retailer

who sells diesel will not necessarily need to upgrade infrastructure to sell biodiesel but can sell a

B5 blend.

The retailer will be asked to declare that it is making all reasonable efforts on an ongoing basis to

secure sufficient supplies of biodiesel blend.

When there is a significant shortage of biodiesel, the Panel will take this into account.

3.3.7 Exemption from the requirement to sell a minimum of six per cent ethanol or two

per cent biodiesel or to offer a petrol-ethanol blend on the grounds that the retailer

has otherwise taken all reasonable steps to comply with the biofuels requirement

The retailer will be asked to explain how it has otherwise taken all reasonable steps to comply.

3.3.8 Exemption from the requirement to sell a minimum of six per cent ethanol or offer a

petrol-ethanol blend on the ground that it is not economically viable for the retailer

to comply:

a. because the wholesale price of ethanol exceeded the reasonable wholesale

price determined by IPART

b. because of the price at which the retailer was reasonably able to produce or

obtain petrol-ethanol blend for retail sale

The retailer will be asked to provide information about the price at which it can obtain petrol-

ethanol blend and about its supply contracts. A retailer is not expected to breach the terms of

existing supply contracts by seeking supply elsewhere.

3.3.9 Exemption from the requirement to sell a minimum of six per cent ethanol or offer a

petrol-ethanol blend on the grounds that it is not economically viable for the

retailer to comply on any other grounds.

Grounds that may justify an exemption in this category include:

• other significant regulatory compliance costs have been incurred in the last two years and

further substantial costs for infrastructure upgrades will be necessary to comply with the

requirement to offer a petrol-ethanol blend

• infrastructure upgrades will require closure of a service station for 28 or more days, or

• any other grounds that mean it is not economically viable to comply.

The retailer will need to explain why it is not economically viable to comply, and make a

declaration about the financial basis of this claim. The retailer may be asked for documentary

evidence to support this declaration.

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3.3.10 Exemption from the requirement to sell a minimum of two per cent biodiesel on the

ground that it is not economically viable for the retailer to comply because of the

price at which the retailer is able to produce or obtain biodiesel blend for retail sale

The retailer will be asked to provide information about the price at which it can obtain biodiesel or

biodiesel blend and about its supply contracts. A retailer is not expected to breach the terms of

existing supply contracts by seeking supply elsewhere.

3.3.11 Exemption from the requirement to sell a minimum of two per cent biodiesel on the

ground that it is not economically viable for the retailer to comply on any other

grounds

The retailer will be asked to provide a declaration about these grounds and why they mean it is

not economically viable to comply, and to hold evidence to support this declaration.

3.3.12 Exemption from any of the biofuels requirements on the ground that an exemption

is reasonable to allow the retailer a period within which to take the steps required

to establish a defence for failure to comply

An exemption on this ground may be appropriate when a service station becomes subject to the

biofuels requirements for the first time and needs time within which to take all reasonable steps

that will be necessary to comply or to establish grounds for an exemption.

The retailer will need to provide an explanation of why it is reasonable to provide time within

which to take these steps.

3.3.13 Exemption from any of the biofuels requirements on the basis that compliance may

result in a risk to public health and safety

An exemption on these grounds may be justified, for example, in situations where disturbance of

an underground fuel tank is unsafe, or in any other situation where compliance may result in a

risk to public health and safety.

The retailer will be asked to provide a declaration as to the grounds on which the exemption is

sought and should hold evidence to support that declaration.

3.3.14 Exemption from any of the biofuels requirements on the grounds that there are

other extraordinary circumstances justifying the grant of an exemption

Examples of circumstances that may justify the grant of an exemption on this ground could

include:

• that the retailer requires development approval to comply, and that approval has been

refused, or the retailer is awaiting that approval

• infrastructure upgrades are necessary to comply, but cannot commence for a specified

time period because, despite their best efforts, the retailer has been unable to engage a

contractor at this time to undertake the upgrades

• the retailer or their site has recently been subject to a natural disaster or other

catastrophic event and this has affected their ability to comply

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• closure of the service station for the period necessary to carry out upgrades will cause

hardship to the local community, for example because the retailer is the sole fuel supplier

in a remote or regional location

• the retailer cannot obtain appropriate insurance to cover upgrade works

• the retailer leases a service station site and the lease will expire in the near future

• the constraints of a service station site make infrastructure upgrades impractical

• where tank replacement is necessary, the remaining useful life of the tank, as estimated

by an appropriately qualified expert, would likely exceed four years, or

• the retailer is a specialist supplier, for example of marine fuel.

© State of New South Wales (NSW Fair Trading). For current information go to fairtrading.nsw.gov.au