It’s a hard road for the Australian biofuels industry, which turns out bioethanol (or E10 as it’s known at the pump) and biodiesel. Until motorists instinctively reach for the bio-blend pumps the sector has had to rely on “government certainty” to help it get on its feet and grow, says Mark Sutton, the CEO of the Biofuels Association of Australia (which hosted the National Biofuels Symposium 2016 held in Brisbane in August).
“There needs to be an education campaign about the benefits of biofuels,” Sutton says.
That’s about to happen in NSW and Queensland. A biofuels mandate introduced in Queensland from January 1 next year will set a 3% floor for ethanol and 0.5% for biodiesel, following a NSW mandate which has been in place for eight years of 6% ethanol and 3% biodiesel.
If those levels sound low consider that it’s up to retailers to achieve them by offering biofuel mixes at the pumps, but many consumers have been slow on the uptake.
The Australian biofuels sector is pretty much all about transport, Sutton admits, whereas around the world it can also take in heating, electricity and co-firing power plants. But local capacity is about to be extended. NSW company Southern Oil has started an advanced biofuels pilot project at Gladstone, Queensland, to produce fuel for military use and potentially jet fuel. Air travel is an extravagant contributor to greenhouse gas emissions and airlines around the world have moved to cap emissions at today’s level by 2020, Sutton says. “We’re starting to see the new generation of biofuels. It’s a completely different process to make jet fuel.”
Virgin Australia and Qantas are keeping an eye on the project as a source of local supply should they commit to running greener fuel through their turbines. The plant “potentially” may also play a role in the US navy’s green fleet program, he says. “It’s possible down the track they may want to port somewhere in north Queensland and fill up with green fuel.” The Australian navy is also a likely client.
Biofuels in Australia are made from waste products – starch, molasses, sorghum, tallow and cooking oil – and the concern about farms of raw materials muscling out native growth or food crops doesn’t apply here, Sutton says. But is there enough waste product to satisfy the hoped-for boost in demand? There is competition for feedstock (sorghum is also used as animal fodder), “but if [the raw materials] are part of the recycle process there is definitely scope to grow the industry,” he says. A more obvious constraint on growth has been a change two budgets ago to the federal excise arrangement and producers’ grant program. The revision put a stop to offshore producers claiming grants at home and here, or “double dipping”, Sutton says. “It was understandable the government wanted to close that loophole but it put the industry under an enormous amount of pressure.”
Certainty has returned to the sector, and now the real issue is convincing motorists to choose the biofuels option. “That it’s a good product, that it’s a sustainable product, that it creates jobs – that’s the issue.”
Looming in the rear-view mirror, of course, are the electric vehicles which will take over the streets — if some predictions are accurate. Until that day there are plenty of hybrid vehicles driven by green-minded motorists that need fuel. And unless the surge in EVs is charged with energy from renewable sources it will most likely be coal-fired plants that are called on to fill their batteries.
“If we’re using electricity in Australia from brown coal or coal-fired power stations then we’re not really reducing our carbon footprint,” says Sutton, who acknowledges Tesla’s “impressive” ambitions. “There definitely is a space for biofuels; there are studies that say we’ve got another 25 or 30 years at least [before EVs are ubiquitous].”