OREANDA-NEWS. Australia's Queensland state has introduced a bill into its parliament to mandate targets for the use of ethanol-based gasoline and biodiesel.

The legislation, if passed, will see Queensland adopt a 2pc ethanol mandate for all gasoline sales and a 0.5pc biofuels mandate for all diesel sales from July next year.

"In practical terms, this mandate will require E10 to make up 20pc of regular petrol sales in Queensland," said Queensland's minister for energy and water supply Mark Bailey.

The Labor-led Queensland state government plans to increase the target after two years, subject to a review by analysis body the Queensland Productivity Commission.

The move by Queensland is in contrast to the federal Australian government's decision in June to introduce legislation to end grants to ethanol and biodiesel producers, removing more than A$250mn ($178mn) of funding through until June 2019.

The federal bill will also increase taxes for domestically produced biodiesel and ethanol for four years from July 2016. Taxes will incrementally increase each year until ethanol will be about 33pc of the excise rate for gasoline and biodiesel is equivalent to 50pc of the excise rate for diesel.