Tax-free, home-brew fuel

Press, 10 April 1980, Page 1

Tax-free, home-brew fuel

PA Wellington The Government had changed the laws on distillation to allow ethanol to be produced for personal use without paying the motor spirits duty, said the Minister of Energy (Mr Birch) last evening. Amendments to the Distillation Act and regulations would be introduced when Parliament resumed, Mr Birch said.

The change would entitle a person or a cooperative to distil up to 5000 litres of ethanol a year for fuel use without paying duty, which was currently 12.7 c a litre, said Mr Birch. This is on the condition that the ethanol was only for the use of the individual or co-operative members and their families.

“Licence-holders will be required to pay an annual licence fee of $5O, post a bond of $5OO, and denature all the ethanol produced, qs directed by the Customs Department,” he said. Mr Birch said the decision to change the law would encourage biomass production and the use of wastes for indigenous fuels capable of replacing fuels derived from imported oil. Ethyl alcohol (ethanol) might be blended with petrol in amounts up to 20 per cent, he said.

Brazil had a nation-wide blending programme and was already producing vehicles that run on straight ethanol, he said. In the Mid-West of the United States, “gasahol,” a 10 per cent blend, was widely used. “The Government believes that alcohol could make a useful contribution to transport fuels here as well,” Mr Birch said. While the amendments would relax the distillation laws, measures to prevent illegal distilling and abuse of the law would be main-

tained, Mr Birch said. Government officials would make regular calls on licence-holders, who would also need to keep adequate records of their works, Mr Birch said. Ethanol distilled on the small scale envisaged, while adequate for fuel purposes, would be dangerous if drunk because crudely distilled ethanol contained fuel oils, methanol, and other impurities, Mr Birch said. He said the new measures would help provide information on costs in relation to small-scale pro-

duction of ethanol and would thus- make a contribution toward replacing imported fuels. Commercial producers of ethanol for fuel use would be charged an annual fee and would have to lodge a bond, both of which would vary according to the volume of production. The rate of duty payable by a commercial producer of fuel ethanol would reflect the merits of a particular enterprise being proposed and would be assessed in terms of national cost and benefit, Mr Birch said.