Transport
Ethanol

Ethanol Market Monitoring 2018/19

Status
Review completed
Start Date
Sep 2019
End Date
Mar 2020
What

IPART submitted its final report to the Minister in December that monitors the retail and wholesale markets for ethanol fuel in 2018/19.  Alongside it we have released a worksheet which contains all of our calculations and references. 

 

 

 

Why

The Biofuels Act requires IPART to:

  • monitor the retail market (including prices) for petrol-ethanol blend,  and
  • make reports to the Minister on the effect of its price determinations for wholesale fuel ethanol.

IPART has been determining the wholesale price of ethanol since 2017. This  price does not cap the wholesale price of ethanol, but is part of the exemptions framework for the ethanol mandate (which requires that at least 6% of the total volume of fuel sold in NSW is ethanol).  If wholesale prices exceed IPART’s determined price, then the Minister may exempt fuel retailers from meeting the ethanol mandate.

 

Key Findings and Recommendations

 

  • E10 continues to be sold at a discount to unleaded fuel and is widely available.  Similar to last year, the average difference between ethanol and premium unleaded over 2018-19 is 2.3 cents.
  • Consumer choice remains effective, with unleaded petrol available at around 75% of all stations. Of the stations not selling unleaded petrol, 99.7% are located within 10 minutes’ drive of one that does.  
  • E10 sales have dropped slightly to 25% of fuel sales, below the (approximately) 60% required by the ethanol mandate. 
  • The Biofuels Act is currently under review. In the future, electric cars could help address some of the objectives of the Biofuels Act, including reducing emissions and lowering reliance on imported fuels.
  • As competition in the retail market constrains the price of E10, we do not consider that there have been significant changes that would warrant a move away from our approach to determining wholesale prices.
  • Now that IPART's wholesale determinations have been in place for several years, we will determine and monitor prices less frequently. Since we have started setting wholesale ethanol prices, there have not been significant changes in the market, and our determined prices have been fairly stable. Our price has not been used when applying the exemption framework for meeting the ethanol mandate. Given these factors, less frequent reporting and determinations would help reduce some of the regulatory costs associated with the ethanol mandate. We will determine the price of wholesale ethanol annually and monitor the market every two years.

 

How

We monitor the ethanol market by:

  • Looking at the price and availability of ethanol blends (E10) relative to other fuels
  • Estimating the wholesale price of ethanol and comparing it to our determined price
  • Considering the level of competition in the wholesale market

 

Key Contact
Jessica Robinson
Email
Have Your Say
IPART routinely seeks public input into our reviews via submissions, public hearings, stakeholder workshops and community surveys.
View all reviews open for submissions