according to the Queensland Farmers’ Federation.

QFF chief executive Officer John Cherry said the current ethanol excise reductions were poorly designed because it provided equal weighting to ethanol from different

crops even though the greenhouse gas emissions performance varied widely.

"Ethanol made from grains delivers only a modest greenhouse gas reduction compared to ethanol from sugar, but puts pressure on grains prices and food prices

right thought the chain," Mr Cherry said.

"Research by the Rural Industries Development Corporation released last year showed that when used in an E10 blend, greenhouse gases reductions were just a

third of those from sugar-based ethanol (1.7 per cent compared to 5.1 per cent).

"All ethanol from sugar is reduced from molasses which is a waste product and therefore has minimal effect on greenhouse and food supply.

"Even when sugar is used directly to reduce ethanol it is still greenhouse positive."

Mr Cherry said that diverting grains into ethanol also puts pressure on prices of intensive animal industries like dairy, poultry, pork and beef, which rely on grains as

an input.

"With a massive world shortage of grains and the emissions intensive nature of grains-based ethanol, it makes good sense to wind back the concessions," he said.

"But, it also makes sense to continue to provide excise concessions for ethanol that delivers greenhouse gas reductions without pressure on food prices, and sugar fits

that bill."

Mr Cherry also said QFF will support an excise reduction regime that links the excise reduction for renewable fuels to their greenhouse gas abatement potential.

On

this basis, the excise would be halved for ethanol based on sugar, but reduced by only 17 per cent for ethanol based on grains.

"This would encourage the continued expansion of a sugar-based ethanol industry in Queensland, while removing the current policy distortion that favours grains over sugar as an ethanol source," he said.

SOURCE: QFF