The Queensland Parliament has approved a bill that would mandate the blending of 3% ethanol into regular petrol and 0.5% biodiesel into petroleum diesel starting January 2017. The ethanol blend will be raised to 4% from July 2018. There was bipartisan support for the bill.

Ethanol-blended fuel has been offered in the Australian state of Queensland for more than a decade, but sales have declined from a peak of about 900 megalitres in 2010 to about 350 megalitres in 2013-14.

Energy and Main Roads Minister Mark Bailey said the mandate would support the development of a sustainable biofuels industry that could help the state to transition to a clean energy economy, contribute to regional growth and job creation and promote the development of an advanced bio-manufacturing industry.

Two of three ethanol producers in Australia are based in Queensland — in Dalby and Sarina.

“I think we’ll see some new growth but to do that you’ve got to have a bigger marketplace, and that’s what we’re seeking here – a bigger marketplace, more investment, more jobs, that’s where we’ve got to go,” Bailey said.

“Regular unleaded petrol will still be available for those who can’t or don’t want to use ethanol fuels,” he said.

The state government had earlier proposed a 2% blend, but argued that a higher blend was needed to attract investment in the industry.

“The Government recognises that some fuel retailers will need time to fully adjust to the mandate requirements and to make infrastructure changes in order to sell E10 and there is flexibility to accommodate those adjustments,” Bailey said.

Petrol retailers in communities that sell low aromatic fuels to discourage petrol sniffing will be exempt from the mandate.

Opposition spokesman Andrew Powell said it made sense to delay the introduction of the mandate from the original start date of July 2016 to allow retailers to install new tanks and pumps, as well as conduct a proper public education campaign.