In a speech today to the American Chamber of Commerce in Sydney entitled Fuelling a brighter future, Caltex Managing Director & CEO Julian Segal called for new policies on transport fuels.

"Caltex believes that transport fuels can improve our future economy, environment and quality of life - a brighter future," said Mr Segal. "Biofuels and other alternative fuels can be a significant part of Australia's future fuel mix but policymakers need to put in place the right measures to allow the potential of these fuels to be realised.

"It does seem there is inadequate funding of biofuels R&D and industry development.  We need an energy white paper that addresses the energy security and climate change challenges facing Australia and the need for renewable and alternative liquid fuels, particularly biofuels.

 "A major policy question is whether we should just rely on markets to provide the liquid fuels we need or whether governments should intervene to regulate or incentivise alternatives to fuels made from crude oil.  As a nation we haven't adequately debated what the policy balance should be.

"However, if Australia is to develop a second generation biofuels industry that is capable of providing long-term, sustainable supply of biofuels, an industry based on first-generation technology is necessary to develop a biofuels market and infrastructure for product distribution.

"A portfolio of conventional and alternative fuels including biofuels will be required in the future - there is no single solution. Petrol and diesel will remain important fuels for passenger vehicles for many years, including as part of biofuels blends and in hybrid vehicles, and growth in commercial diesel and jet fuel will underpin Caltex refinery output and profitability.

"Carbon prices would have very little impact on fuel consumption, a long term reduction of only two per cent, so would have very little impact on emissions.  As a result, Caltex proposes that motorists and light commercial vehicles should not be included in any emission trading scheme.  Regulation and incentives are more effective than carbon prices for cutting transport emissions.

"Caltex believes Australia should have targets for light vehicle greenhouse gas emissions, set in consultation with vehicle manufacturers.  In addition, there should be financial incentives for consumers to purchase lower emission vehicles.

"A small carbon price of say $10 per tonne initially would not be an acceptable alternative to the CPRS for industry emissions. A carbon tax would create the same problems for internationally competitive industries like oil refining as the CPRS but with less ability to provide an appropriate assistance mechanism."

A copy of the speech and charts is available at www.caltex.com.au.

Caltex contact:
Felicity Wilson, Media Adviser
02 9250 5887
fwilson@caltex.com.au