The Productivity Commission recently said the rule that six per cent of fuel sold by major retailers must be ethanol was anti-competitive, and not having the environmental benefits intended.

“The extent to which biofuels offer carbon emissions savings depends on how they are produced,” the commission’s report said.

“If native vegetation is cleared in order for the land to be used in biofuel production ... this can lead to several times more carbon emissions being released than the fossil fuels they displace.”

Now Manildra has struck back, accusing the Commission of relying on suspect evidence.

“Ethanol blended fuel is clean, renewable and significantly reduces greenhouse gas emissions, smog pollution and other toxic emissions such as particulate matter,” it said.

“The Productivity Commission has drawn flawed conclusions from unsubstantiated evidence.

“Ethanol drives investment and contributes to regional growth and job creation. At Manildra’s Nowra manufacturing plant, we produce food, feed and sustainable fuel (ethanol) from wheat, employing hundreds of locals and re-investing into the local community.”

Citing research by the Australian Competition and Consumer Commission and IPART, the Productivity Commission said in its review of agriculture regulation that ethanol mandate reduced consumer choice.

“The mandate affected the competitive dynamic between retailers by reducing the availability of regular unleaded petrol at many retail sites,” the commission said.

Manildra accused the commission of falling for “negative perceptions”.

“While ‘myths’ about ethanol blending have been debunked by credible research and exhaustive engine tests, negative perceptions of ethanol blending still persists with the Productivity  Commission,” Manildra said.

“Ethanol provides a vital value-added market for wheat, sorghum, sugar and other commodities, providing an economic boost to rural Australia.”