Biofuels and the sustainable biofuel obligation

Biofuels are any fuel produced from biological matter or 'biomass'. This can include agricultural and forestry crops and residues, organic by-products, and waste. Biofuels can help reduce emissions and contribute towards meeting Aotearoa New Zealand’s climate targets.

How biofuels are used

Biofuels are made from renewable biomass such as plants or organic waste. 

Liquid biofuels are a renewable, low-emissions fuel that can be blended with petrol and diesel to reduce greenhouse gas emissions from transport. They are also less dependent on new vehicles (for example, electric vehicles or hydrogen fuel cell vehicles) because they can be used in existing internal combustion engine (ICE) vehicles.

Currently, the use of biofuels in New Zealand is very low and there is limited domestic production.

Transport contributes about one-fifth of Aotearoa New Zealand’s gross domestic greenhouse gas emissions, and accounts for almost half of domestic carbon dioxide emissions.

Biofuels are a technologically and economically viable option that could be utilised to reduce transport emissions, while we transition to a low-emissions transport system. Biofuels also provide emissions reduction pathways for hard-to-abate areas of transport, like heavy trucking and shipping.

Sustainable Biofuels Obligation Bill

The Sustainable Biofuels Obligation Bill was introduced to Parliament in November 2022. On 8 February 2023, the Prime Minister Rt Hon Chris Hipkins announced that the biofuels obligation would be discontinued, as part of the Government’s policy refocus.

Government takes new direction with policy refocus(external link) —


Below are links to previous consultations on sustainable biofuels:

Increasing the use of sustainable biofuels in Aotearoa New Zealand consultation – July 2021

Submissions on the use of sustainable biofuels in Aotearoa New Zealand consultation

Consultation on the Sustainable Biofuels Obligation regulations – July 2022

Submissions on the Sustainable Biofuels Obligation regulations

Cabinet Papers

Last updated: 12 July 2023