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Victoria lights up on gas conversion plans

State of the industry: The Victorian government has formally thrown its support behind plans to establish a bulk LPG conversion industry that could replace some of the jobs lost in the automotive sector.

State backs proposal to transform LPG conversion industry

26 May 2014

VICTORIA will tip its support behind a government-backed steering committee to look into a proposal for the mass conversion of new vehicles to run on liquefied petroleum gas (LPG).

The proposal, developed by Gas Energy Australia (GEA) and the Victorian Automobile Chamber of Commerce (VACC), would go some way to preserving jobs in the automotive sector when the three local car-makers and their suppliers cease production between 2016 and 2017.

The idea was pitched to the state government at the recent automotive industry roundtable meeting held in the wake of Ford and Holden’s decision to quit Australian manufacturing, and before Toyota announced it too would close its factory doors.

Victorian premier Denis Napthine has previously shown his support for the creation of a steering committee to examine the proposal, however, the VACC has since confirmed that the state will throw its support behind the project.

“Given that Ford, Holden and Toyota will cease car manufacturing in Australia at the end of 2017, we must seize all employment, production and regeneration opportunities in the automotive industry,” VACC executive director David Purchase said.

As presented, the scheme would involve the creation of three large LPG conversion centres, including one in South Australia, for the efficient conversion of new petrol-powered vehicles to also run on the gas.

Proponents of the scheme estimate that it could create as many as 500 jobs.

Apart from the conversion centres, there would also be a centre of excellence to conduct research into LPG conversion, which would also set the framework for quality standards for the LPG industry in a bid to raise its image.

Existing LPG converters would still be able to focus on converting used vehicles to LPG, which still attracts a lower excise than petrol and diesel.

Rebates for the conversion of new ($2000) and used ($1000) vehicles to LPG, introduced in 2011 to provide a stimulus for the fuel, will end on June 30.

Unveiling the plan, GEA chief executive Mike Carmody said similar high-volume new-vehicle conversion centres were operating in Europe and the US.

He said he expected demand to come from the operators of large vehicle fleets that were likely to gain the most benefit from using LPG instead of petrol and diesel.

“We hope support for this project in Victoria will lead to automotive industry partners coming on board, and also stimulate interest from the federal government,” Mr Carmody said.

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