This is a guest post by David K. David worked in the oil industry for many years in the Middle East, Europe, Asia and New Zealand.

Legislation to mandate biofuel percentages in New Zealand’s petrol and diesel is going through parliament and will become law in the near future. The intention is undoubtedly well meaning, but I believe it is misguided. At best it will have little impact on climate change. At worst it will be strongly negative, especially in New Zealand.


At first sight, biofuels seem an elegant response to climate change. The thinking is – plants and trees absorb Carbon Dioxide (CO2) from the atmosphere and convert it to biomass. If the plant can be converted to a burnable fuel, then the CO2 emitted back to the atmosphere balances and no net CO2 is produced.

Plants used as a biofuel production. Credit: The Biology Notes

In practice, fossil fuels are the result of millions of years of solar, biological and geological energy accumulation. The central problem is that we have become reliant on using high levels of this accumulated energy; we’re using capital as if it is income. There should be no surprise that multiple problems arise when we attempt to replace fossil fuel with energy produced annually from solar energy by plants. A biofuels strategy works only if:

  • The CO2 emitted in growing the plant and gathering, producing, transporting and burning the biofuel is less than emitted using the equivalent fossil fuel.
  • Biofuel production has no serious environmental consequences on land use for food production, loss of forest cover and cost of food.
  • More broadly, biofuel use does not slow the necessary societal behavioural changes such as shifts to public and active mode transport and less carbon intensive food production, nor slow the change to more effective technological solutions such as transport electrification.

The government briefing papers show awareness of some of these problems and propose mitigation steps for several. There is good reason to believe, however, that the proposed mitigation will be largely ineffective in real world scenarios.

Background and Basics

For land transport fuels, biofuel is usually used as a 5 to 15% “drop in” component with conventional fossil fuels. The maximum limit avoids motor running problems or more serious damage.

The volume of biofuel required for a mandate is considerable. At present there are only two sources of biofuel available on the industrial scale necessary to replace part of our national fuel pool:

  • Bioethanol added to petrol. Bioethanol at scale is produced by fermenting corn or corn waste (notably in USA), sugarcane (e.g. in Brazil) or wheat and sugar beet (in the European Union).
  • A range of edible oils added to diesel. By far the most common, and the only one produced without large subsidies, is edible palm oil. Other sources include various edible vegetable oils and tallow from animal hides. All of them require chemical treatment (esterification and sometimes hydrotreating) to avoid damaging the motors, except in niche climate/use situations.

Both these biofuel sources are “first generation”, i.e. they have alternative uses as food. They are therefore very contentious.  Organizations such as Greenpeace Europe and Friends of the Earth are strongly opposed to biofuels, from both food and deforestation perspectives.

Research funding has been poured into “second, third and fourth generation” non-food grade sources of transport biofuel such as algae, wood derived lignin/cellulose fermentation, recycling of used edible oils and many others. But to date none are technically or commercially viable at the scale required.

Europeans are trying to shift from food based to “waste based” biofuels – mainly used cooking oil sourced from China. Available volumes are too small and there are concerns over fraudulent certification.

Credit: Sandra Ruudu, Greenpeace.


Difficulty Number 1: Most Biofuels Have Higher Emissions Than Fossil Fuels

The CO2 emitted during biofuel production is never zero. The emissions depend on the specific growing/gathering/production and transport chain but are significant. Reasonable yields usually require high carbon footprint artificial fertilizers. For first generation biofuels, the emissions just from the change in land use alone can exceed those from the equivalent fossil fuel.

Land Use Change of Different Biofuels. My notes on a chart from the European Commission’s report The Land Use Change Impact of Biofuels Consumed in the EU, 2015

In most cases, once the production, fertilizer and transport emissions are added, the total biofuel emissions are significantly worse than the fossil fuel alternative.

As one example, in the New Zealand market Indonesian and Malaysian palm oil is the most likely diesel biofuel component. The palm oil comes from the palm seed kernels which are usually processed on the plantation. The oil is delivered by diesel truck to the blending point at an oil refinery or shipped to New Zealand for blending at import terminals. Approximately every seven years, kernel production drops off and the tree is cut down and burned. For those living in Malaysia, Singapore or Indonesia, the entire region is blanketed with smoke for approximately six weeks every dry season. The net CO2 emissions from those two country plantations are estimated at a little under 1% of global greenhouse gas emissions and are net negative when used as a biofuel. The health impacts from particulates are enormous, particularly on children and the elderly.

Over the last thirty years in these two countries approximately 19 million hectares of mostly virgin rain forest has been cleared for plantations and continues to be cleared in western New Guinea and Borneo. For comparison, New Zealand’s total area is about 27 million hectares.

On a personal note, having lived many years in these areas, I have witnessed extensive, large scale clear felling of rainforest for palm oil. The annual dry season smoke stops outdoor activities, forces school closures and at worst is like living in a chimney.

Fires to clear land for palm oil plantations. Credit: Antara Foto / Wahdi Septiawan via Reuters
Widescale destruction for Palm Oil production. Credit: Greenpeace

Difficulty Number 2: Biofuels Compete for Arable Land

When an arable crop is diverted to a biofuel, it has two effects; the resulting shortage of food puts the price up, and the land is not available for growing other crops. Even the “waste crops” now being promoted for biofuels are still potentially food for an animal or another part of the agricultural cycle.

All the European and USA biofuels have these side effects. As one example, North American bioethanol is produced from corn starch. After successful lobbying for subsidies in the early 2000s, farmers began using not just the corn stalks after harvesting, but the whole plant for bioethanol.

This resulted in a shortfall in corn supply and a dramatic price increase in central America where it is a staple food. Despite lobbying from many groups, these subsidies remain largely in place and the USA is the world’s largest producer of (highly subsidized) biofuel. At present, the only large-scale, non-food biofuel crop is the jatropha plant grown mostly in India. However the land used for this has been diverted from food production. The jatropha plant is resistant to herbicides so can easily become a wilding pest.

Jatropha Farming is a Monoculture, Needs a Lot of Water and Diverts Land from Food Production. Credit: John Daly

Difficulty Number 3: Non-Food Biofuels are Not Available at Scale

Some second and third generation biofuels are available, but in small volumes. Examples in New Zealand are bioethanol from diary whey, recycling used edible oils (such as the local fish and chip shop) and digesting pine forest slash. All are possible. However for a mandate of say 10%, approximately 700 million litres of biofuel are required each year. Dairy whey volumes are around 40 million litres and have an existing market.

Tallow can be processed into a biofuel and Z Energy has even built a plant in Auckland. However New Zealand tallow comes from cow hide processing and is edible grade. It commands a high price as a component of products like soaps, lipstick and makeup, making the tallow plant completely uneconomic without very large subsidies.

Protest in Hamburg against Food as Biofuel. Credit: Greenpeace

Difficulty Number 4: Plants Are an Inefficient Way to Make Energy

Plants are the right way to make food, but are simply not very good at converting sunlight into energy to power transport.

Diesel cars running pure palm oil convert just 0.09% of sunlight energy to movement. Ethanol in petrol efficiencies are similar. In contrast, solar panels running electric cars convert around 7%. Therefore, solar panels need less land: up to 7/0.09 = 77 times less. At the same time, the space underneath is useful for crops and livestock.

There is no fix for this. Plants will never be a good way to make energy, and growing energy will never become an efficient use of land.

Difficulty Number 5: Biofuels Mask the Need for Real Action

In my mind this is the biggie. A biofuel mandate in New Zealand maintains the status quo where people drive large, mostly fossil fuel powered cars and avoids any hard political or personal decisions about modifying behaviors.

Jerome Kaino with a Walking School Bus. Credit: Jason Dorday / Fairfax NZ, via Stuff

As an example; a busy person can still drive around in a large car, but feel good about protecting the environment. In the climate friendly version, the person walks, bikes, uses public transport or drives a much smaller car – preferably electric or hybrid. The truly climate friendly change we all need to make is to drive less and to walk, cycle and use public transport more. Biofuels will defer the necessary mode shift, contribute to car congestion and divert money away from the infrastructure required to make walking/biking possible.

Difficulty Number 6: The Subsidies to Biofuel Lobby Groups

There are strong lobby groups who benefit from generous production subsidies and New Zealand runs the risk of establishing them here. From the beginning biofuels have been about profits rather than saving the planet.

New Zealand can look to Europe, where more focus has been given to developing sound mitigation strategies. Europe has banned edible oils in biofuels and has a certification system to avoid the use of food crops and clear felling.

To date these measures have not been effective. Reports published this year show European biofuels are still mostly rape seed and other edible oils, and raise concerns over fraudulent certification of “waste” oils. The Ukraine war is constraining supply, triggering further food price increases and debates over relaxing the mandates.

There is no reason New Zealand should expect to have more success: the volume of non-food grade biofuel is simply not enough to supply mandated demand, and the certification is easily defrauded in the producing countries.

Biofuels in New Zealand

The push for biofuels in New Zealand comes from the Climate Change Commission pathway assuming biofuels can reduce emissions in the short term, pending more significant initiatives. The CCC’s assumptions around biofuels seem to ignore impacts outside our territorial limits. The government briefing papers, on the other hand, propose solutions to some of the difficulties listed above, based on the EU sustainability model:

  • The biofuel carbon balance must be provided to account for CO2 in the various growing, gathering, processing and transport steps.
  • Biofuel is certificated as not coming from a food grade oil, causing deforestation, using excessive water and having appropriate land use.

In practice, as the EU is demonstrating, the only currently available sources of biofuel imports at the scale required, are food grade crops, mostly with severe or very negative climate impacts. The oil companies will be faced with the prospect of either not filling the mandates, or accepting fuels with suspect certification.

It is also worth noting that all biofuels are more expensive than fossil fuels so a mandate will result in a fuel price increase, but without any corresponding climate benefit.

The Way Forward

New Zealand should not ignore the European Union’s ongoing difficulties with sourcing ethically sound, non-food based biofuels. We need to “follow the science” to find more effective strategies.

The urgency and magnitude of climate change means we need to direct our focus, effort and money to actions with a quick, direct and positive climate impact. With few exceptions, biofuels don’t qualify. (There may be a place for local biofuel production in specific locations with short transport links and where the carbon footprint is indeed better than the fossil fuel alternative.)

Examples of initiatives that are climate positive, and which should be receiving the government’s focus, include incentives to increase the renewable percentage of power generation, electrification of vehicle fleets and building safe infrastructure for walking and cycling.

A few links of interest

Report on Unsustainability of EU Directed Biofuels:

Reuters on EU biofuel and palm oil:

The Guardian on Biofuel impacts:

EECA Biofuel Report:

Europe’s Concerns over biofuel certification fraud:

Newsroom on the consequences of NZ’s biofuel mandate:

David K is part of advocacy group Don’t Burn Our Future, which is launching a campaign to stop the NZ biofuels directive from being implemented. Follow them on FB at

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  1. How anyone thinks that ‘fuel’ is the way forward for transportation is beyond me. If we have to use cars, and with the battery tech we will have in the near future (smaller /cheaper/longer range/less materials) then it simply becomes a no brainer. I can buy fuel off someone, or just generate my own renewable energy. Talk about flogging a dead horse.

    1. Even if 100% of all new cars being sold tomorrow were EV – and we are long way from that, then given the average turnover of cars, we are still decades away from the fleet being mostly EV

      Biofuels – at least when Z proposed introducing it 5+ years ago give you a quicker though modest win of about 4 – 5% for the existing fleet without the long complex and expensive process of replacing the entire fleet of millions of cars.

      And it’s not just about cars. There is no BEV commercial airliner in operation in NZ and probably won’t be for some time.
      There is also diesel powered trains, ships/boats, generators etc, that could benefit in the short to medium term even if long term the answer is pure EV

  2. This is the problem around the current approach of decarbonization. A country is responsible only for the emissions actually occurring within their borders. This means drilling for oil and selling it is not a problem. And neither is consuming imported high emission products (like Biofuels or EVs or Steel) as long as they have no emission when using them.

    So Norway is doing great going towards net zero. They export their oil in abundance (which doesn’t count negative for Norway, but it increases their wealth and since they are greedy they even plan to expand oil production with no end in sight) and import EVs en masse (again, who cares what the emissions were during production, didn’t happen in Norway) and their transport has “no” emissions…

    In my opinion all three pillars need to be accounted for in each and every country, adding imported and exported emissions.

    1. Totally agree. Human behaviour needs to change and without accounting for ALL emissions related to consumption it’s just a joke.

  3. Degrowth of the economy is critically important. We need to reduce our impact on the planet by using fewer resources, creating less stuff.

    But don’t confuse this with a need for “a 50% reduction in the short term” of humans. Nature might do that for us, but only because we’ve been refusing to reduce our impact.

    Human decency requires us to reduce the number of people gradually; the short term work to do is about substantially reducing our per capita impact.

    “I don’t see anyone sticking their hands up to volunteer to go first.” Have you stuck your hands up to not fly, not drive, and not do all the other quite abnormal things that people are doing that cause climate change? Or do you think culling people to let you continue that extravagance is better?

    80% of people have never set foot on a plane. Think about the inequity of what you’re suggesting.

  4. You can fit the entire human population of the world on Bali. The issue isn’t the number of people. It is the expectations those people have.

  5. Could we reduce air travel emissions a lot by increasing the number of people (and reducing luggage allowance) on each plane resulting in less trips needed? Get rid of business and first class for example.
    Will flying economy be the new green thing to do?
    And of course NZ could reduce air travel emissions a lot by ditching international tourism. The economy seems to have survived well so far without it. It would work both ways as NZers could afford to holiday in our own country.
    Also if they improved Auckland City it could become a destination for NZers instead of having to go overseas to experience a proper city.

  6. I looked at biofuels during my Bachelors, coming to the conclusion that they were a nice niche product for use in sensitive environments.

    If you spill ethanol or biodiesel in a pristine lake, it’s far more biodegradable.

    Waste streams like used fryer oil seemed pretty well integrated to animal feed production and biofuel just seemed like a solution looking for a problem. The only viable feedstock was virgin rapeseed.

    The EU had a subsidy for ‘set aside’ land that was not in food production, but farmers could claim it and grow oil for biofuel. A lucrative double dip on marginal land that the subsidy was designed to make fallow or reforest.

    Vehicle manufacturers found that biofuel blends could help them meet the progressively tighter EU emissions standards and got behind them too.

    A good example of unintended consequences or an industrial complex conspiracy?

  7. I didn’t know about difficulty number 1, but I have always seen biofuels as taking food from poor children’s mouths.

    1. Yes. In an era of massive soil erosion and depletion, creating a global crisis in both the area available for horticulture and agriculture and in biodiversity, the idea of diverting land suitable for food crops, which can be regeneratively and diversely grown, to monocultures of crops for transport fuel production is simply inhumane.

    2. Agree, always thought biofuels were a load of greenwash bullsh!t. How many starving kids does it take to run a Landcruiser for a year?

  8. Just to add that the biofuels bill has not yet been introduced, although it is supposed to be passed this year. So there should be an opportunity to submit soon. If it does pass, the details about which biofuels are to be allowed, who assesses their lifecycle emissions etc become crucial.

    I suspect the government is very keen to see a domestic second-generation biofuel industry start here, based on forestry waste, but the cost and technical obstacles are formidable. There is one such plant under construction in the US.

    Transport is a difficult nut to crack and all its components affect each other. The Green Paper’s pathway with a 40% reduction in driving is surely a far better way to go than the 20% reduction that is now in the Emissions Reduction Plan. But even that is not going to be easy.

    Similarly on cars. It’s easy to say “rapid electrification” and “pricing driving” but in practice we are squeezed between the current torrent of new ICE vehicles coming into the country, and the clean vehicles bill itself being a big achievement and likely the strongest thing we could have gotten – it was even strengthened at the last minute.

    1. Totally agree. If government is so keen to see a domestic second-generation biofuel industry start here then they need to fund the science & development first and foremost. Relying on “the market” to delivery is woefully inefficient.

      1. Agreed, there are ways in theory the Govt could make wood-to-fuel happen (i.e. through massive direct investment), but an obligation on suppliers isn’t it. The financial and technical barriers and risks are too high, and the lead time is many years.

  9. I am skeptical of biofuels for mass market vehicles; BEVs are a way forward for private cars, with possibly hydrogen (which I am also skeptical of) playing a part in some niche markets like heavy trucks. Though less VKT would be another more easier solution

    There could be some technology breakthrough like waste-water algae or using forest waste (lignin?), but right now biofuels seems of limited value other than niche markets, and I agree with most of the points made

    But… I feel the post is focused on Europe and not looking specifically at Auckland/New Zealand which should be our starting point for NZ regulations

    Yes, growing corn/beets etc in the US/South American is a bad idea, but not really relevant to us, as hopefully nobody is suggesting using anything but non-food waste (and I am totally against import of Malaysian palm oil)

    Over 5 years ago I had a minor role with the Z Energy ‘Project Daisy’ – the Wiri biofuel plant. Couple of things wrong with #3.

    One is that Z were planning on making biofuels at scale as NZ produces a lot of meat products. You need to make at scale to get economy of scale, so the Wiri plant was really a small pilot level factory but still could have played a part with some gas turbines in particular or mild biofuel blends

    The tallow was not a food source as suggested above, but non-edible product used for making cake soap. Which was going out of fashion (replaced by liquid soap) but came back into popularity raising the price of what was nearly a total waste product

    It was not stupidly expensive; last time I looked (pre current fuel price spike), Z were talking about 2 c per litre more expensive for a product that would lower emissions by ~4% for fuel it was used in. Not great, but also not “completely uneconomic without very large subsidies”

    It was a close run thing; if the government at the time had mandated biofuel blends (taking care to avoid non eco-friendly imports), then I think reducing imports of diesel by ~5% would have been useful.

    Maybe that boat has sailed, but I think the aviation industry (including RNZAF) will need something like biodiesel as nothing else feasible in the near future to reduce emissions other than flying less.

    1. Thanks Grant B for your comments.

      This blog is New Zealand focused. The references to the EU are because the draft NZ legislation is heavily based on the EU guidelines, almost to a cut and paste level.

      We all agree that importing food based biofuel is a very bad thing. A key point here is that unfortunately non food grade biofuels are simply not available in any quantity, or have fraudulent certification. The draft legislation is alert to this, but does not address the impossibility of filling the obligations ethically. This could imply a willingness to “look the other way”.

      Edible grade tallow does not mean it is food. Only that it can be safely ingested as a side effect – from licking lipstick, swallowing a bit of soap etc. This contrasts with non edible grade tallow, usually produced synthetically, which cannot be safely ingested.

      Lastly, the aviation industry is a very hard problem to solve. Worth a blog on its own. The current fuel in jet engines is kerosene not diesel, but can be produced from bio sources quite easily. However for aircraft the size of a 747, the challenge is the enormous fuel volumes required would consume vast areas of land and displace food production. The electric and hydrogen alternatives are not plausible for the foreseeable future due to the high weight/volumes required. David K

      1. Read your article and would like to know more, but frustratingly a lot of what I read about biofuels (for and against) rings of advocacy.

        Talking about south america or the US using food crops like corn feels like poisoning the well, rather than substantive discussion about Aotearoa in 2022.

        Emotional language about the extreme cost of doing so, yet at the same time admitting that we are looking at 10c a litre (Z Energy estimate for their NZ plant was ~2 cents per litre). Increased prices will also decrease VKT and emissions if fuel demand is somewhat elastic

        I have questions like “The policy will add an estimated extra 10c/litre fuel cost (note, NZ consumes roughly 45M barrels of oil per year. So at 10c/litre, the NZ biofuels obligation will add roughly $720M per year of extra cost to consumers at the pump)

        Is the intention to blend all oil consumed in NZ?

        Maybe I am being simplistic, but from my reading last night, the most relevant objections seem to be “we don’t have enough good biofuel in NZ to meet targets”. Where ‘good’ = biofuels which provide net emission reductions and don’t affect food or other have environmental impact (like palm tree burning).

        It feels like an all or nothing approach; all fuel blended or no biofuels. Is it not possible to target what we can actually supply with NZ produced or sustainable biofuels? For instance target diesel or A1 only?

        1. You are quite right in saying – “we don’t have enough good biofuel in NZ to meet targets”. Where ‘good’ = biofuels which provide net emission reductions and don’t affect food or other have environmental impact (like palm tree burning).”

          If the NZ government proposal wasn’t a mandate/obligation then we could just revert to blending whatever “good” biofuels we can produce over time.

          I don’t believe the blog is really advocacy – it’s just attempting to summarize the science of biofuels for a general audience, and draw attention to the facts of deforestation and food to fuel diversions. You can check out any number of reputable sources on the internet which will give the same story. Maybe start with Wikipedia or the EU and go from there?

          The NZ government mandate/obligation would require blending a certain percentage of biofuel into New Zealand’s petrol and diesel pools. So far they’re meaning the total pool for each product. The exact quantity required will depend on the mandated percentages, but certainly will require imports in the medium term, as New Zealand doesn’t produce much biofuel at all now.

          The imports will definitely be sourced from US ethanol or EU/Chinese edible oils or palm oil as they are the only sources available in volume. Reading the official EU reports on some of the links supplied highlights this.

          NZ advocates sometimes point to wood waste as a source of second generation bioethanol. It’s a great idea, but the technology doesn’t exist at scale yet, will take quite a few years and considerable investment to have a material impact. Also, given the temperatures required, I’m not sure it will be net positive for CO2 reduction.

          If the government approach is not a mandate/obligation then the importers can avoid the ethical dilemma of importing food grade biofuels.

          On some of your other points;
          New Zealand fuel demand isn’t very price elastic. Over many years, demand fluctuations reflect GDP, but doesn’t change much when the price goes up. We moan, but we still drive.

          To avoid exceeding the product specifications giving problems with our vehicles, bioethanol can only be blended into petrol, and a range of oils – mostly vegetable or palm oils – can be blended into diesel. You could target only one fuel – but then the volume of biofuel added would be less.

  10. Great article explaining some of the pitfalls of biofuels. Jathropa however can be grown in very poor non arable soils so could be grown without taking away land for food production.

    1. The problem with Jathropa is that when it is grown in poor soils it produces a poor crop. it is not the answer. There is never a free lunch

  11. I think there is a market for ethanol. When you get AI to control the growing evironment of algae you do get yeilds that are sustainable. They don’t need to take up crop growing lands. Ethanol creates roughly 40% reduction in co2. It is an excellent short term mitigator of co2 if done right. Converting the fleet to ev will take many decades. I’m sick of petrol prices. It’s cheaper to make it than going to the pump.

    1. Hi David A. We all wish it were cheaper to make ethanol from algae than than fossil fuel petrol. Sadly it isn’t so. Despite several decades of significant government and private investment, I don’t believe there is any algae fuel production bigger than pilot plant scale anywhere in the world.

      Also, assuming the laws of physics don’t change, it is unlikely that any biofuel will ever be cheaper than the fossil fuel alternative. (short term photosynthesis/transport/digestion versus millions of years of anaerobic digestion, pressure temperature etc).

      Using AI is definitely a good thing – it may make small volume, local solutions viable. But not at NZ fleet scale.

  12. All of the above is interesting.
    One point missed is if the bio component of the fuel is produced domestically. Domestic production would have the effect of reducing the amount of imported fuel with the main benefit being to the nations current account balance. Secondary benefit would be local job creation and the carbon sink effect.
    Imported biofuel however has little to no benefit to NZ as per the post.

    1. Depends what problem you are trying to solve. Locally produced fuel does create local (subsidized) jobs, but if we are wanting to help climate change, there are a lot more effective ways to spend the dollars.

      Given the volumes required, most of the biofuel will have to be imported.

  13. This is a good summation of the situation and its very hard to see much future in it. However things change I bet the management and directors of the Marsden refinery are kicking there own arses over its shutdown right at the point where we have a global shortage of refining capacity. Why else would diesel cost nearly as much as 91.
    I am crying for all the people who recently purchased double cab utes. Ha Ha Ha.
    One thing we should think about is the replacement of dairy products with plant based products. This could free up land for bio fuel especially in traditional cropping area like Canterbury even the Waikato can grow Maize. I am assuming grains, sugar and vegetable oils would be needed as the raw materials for plant based dairy products. Maybe there would be a surplus which could be used for biofuels. Anyway any bio fuels produced from arable farming should be reserved for hard to electrify tasks like international flights. But don’t forget about the annual 3 million tonnes forestry waste. This could be used to produce process heat or maybe peak electricity in the middle of winter when the wind isn’t blowing.

  14. Looks like biofuels may be “some limited opportunities for NZ production and use.” Making it cost-effective to take forestry waste off the ground for some beneficial use is different from solving NZ emissions, which can only be “drive less”.

  15. The only biofuel source in my mind that would make sense is from left over cooking oils but it’s quite a limited quantity & by the time you factor in distribution etc would probably hardly be worth it….just my 20 secs brain thought.

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