With the rising cost of fuel, increasing pressures on our resources coupled with offerings of exemptions from the federal excise, Biofuel projects have responded to this demand and new business opportunities in Regional Australia are emerging.
In 1999, transport contributed to 16 per cent of Australia’s greenhouse gas emissions with road transport making up to 83 per cent of these emissions. Adoption of Biofuels will result in significantly lower greenhouse emissions, it is a renewable energy supply thereby reducing our reliance on imports, and it will create more regional development and employment whilst improving air quality.
Research undertaken by the Western Research Institute(WRI) showed that Biofuels will have a significant effect on the sustainability of regional Australia but will also save billions of dollars each year in health expenses.
Tom Murphy CEO of WRI told Regional Business: “Biofuels will reduce the dependence we have on fossil fuels. Australia’s oil deficit is increasing rapidly. We are more dependent, paying more whilst importing more.” When asked the impacts Biofuels will have on regional Australia Tom said: “…apart from everything else [economic, environmental and public health] we will grow and process Biofuels in regional areas, there is however a concern that this will push up grain prices due to the increased demand and that this could have a negative effect on particular industries, however history has shown that Regional Businesses are adaptable and would adjust to these increases… for the regions as a whole, Biofuels would be a net positive.”
With the then expected rising costs of grain as an input, this is only likely to accelerate the current food-fuel debate; however advances in biotechnology will see shifts towards using microorganisms and enzymes to convert cellulose products into sugars for the fermentation Biofuel production process. The exciting thought going forward is that cellulosic ethanol will be able to be produced using inputs such as wood chips, grasses and weeds, agricultural leftovers and entire plant material, so for example the cob, stalk and silk of corn plants, thereby lowering input costs to the production process.
This month we look at one of the Biofuel developments in our region and explore the opportunities that are emerging due to this eco-market shift within this industry.
FUEL RETAILER E10 UPGRADE GRANTS
Ethanol Distribution Program (EDP): Quick Facts
What does it aim to achieve?
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increase the number of retail service stations selling 10 per cent ethanol blended petrol (E10)
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increase the volume of E10 sold
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encourage the sale of E10 at a lower price than regular unleaded petrol.
What does EDP offer?
The program provides grants of up to $20,000 for retail service stations to reduce the cost of installing or converting infrastructure to supply E10.
There are two types of grants:
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an Infrastructure Upgrade Grant of up to $10,000 for retail service stations that upgrade existing equipment or install new equipment to provide for the sale of E10. The work must be completed between 1 October 2006 and 30 September 2007
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a further Sales Target Grant of up to $10,000 for those retail service stations that have upgraded their site and that have reached an E10 sales target within 12 months of completing the upgrade.
The Sales Target Grant is only available to retail service stations that have received the Infrastructure Upgrade Grant.
For more information and to apply visit http://www.ausindustry.gov.au/
STOP THE PRESS
Condobolin Ethanol Project Plan
Agri Energy Limited advised the Australian Stock Exchange that the Company has submitted to the New South Wales State Government an application for development approval for the Condobolin Ethanol Project.
The planned project is expected to produce 200 million litres of ethanol at full production and is expected to use 600,000 tonnes of grains per year as inputs. The cost of the planned plant construction and upgrading of required infrastructure is estimated to cost $120 million. |
SNAPSHOT: Biodiesel Producers Limited www.biodieselpl.com.au
Established: 2003; in 2004 $9.6million was granted by the Federal Government with a Biofuel Capital Grant.
PBL Team: Operations Manager Mr Chris Attwood is an engineer, experienced in fermentation processes, and has worked for the multinational Burns Philp establishing plants in the USA, Brazil, Argentina, Vietnam, Turkey and China. In July 2006 Chris and his young family relocated to Wodonga from Sydney. They found the move relatively easy as they do not require schooling yet and Chris’s wife is not looking for paid employment at this stage.
Other members of the team include the Chair – Curt Leonard who was the Regional President of Mars Inc; the MD – Andrew White who was the Finance Director for Mars Pet Care, and a Board of Directors, who are mostly representatives of the major investors coupled with strong industrial and financially experienced people.
Primary Products or Services:
Development and production of biodiesel using tallow and waste cooking oil, with a growth plan of 3 to 4 plants in the Australasian region.
Main Customers or Clients: Haven’t entered into production at this stage, the initial target market will be large independent fuel resellers and large on road and off road diesel users, possibilities for sales to the oil majors may open later
Company Structure: Unlisted public company
Office or Plant Locations: Albury–Wodonga region. The plant will have a production capacity of 60 million litres per annum, and is located in Barnawartha, about 20kms SW of Wodonga. Commissioning should start at end of May 2007.
Plant Construction Costs: $35 million investment, a large amount of the construction work has been awarded to regional companies and preference was given to utilisation of local contractors
Number of Employees: Recruitment is currently underway for plant operators, 17 people will be required for the plant operations, and 5 for the corporate side of operations.
Annual Turnover: In the order of 60 million dollars once production starts.
Background:
The company has grown from an entrepreneurial concept which had sourced a suitable process technology supplier into a robust regional business.
The technology supplier is located in Austria and has been involved in the Biodiesel industry since the 80’s, BDI (Biodiesel International) have completed 10 to 12 plants with another dozen under construction. Austria has been one of the leading pioneers in Biodiesel and was one of the first countries to have a formal specification for biodiesel.
Environmental:
Aside from the renewable aspect of biodiesel, raw materials are generally waste products or are reclaimed material. Palm oils have not been considered as a major raw material. The environmental and health benefits are significant with a 50 per cent reduction in Carbon Monoxide emissions, particulate emissions being reduced by up to 50 per cent over regular diesel, and Carbon Dioxide and Aromatic Hydrocarbons emissions can be reduced by up to 78 per cent.
In the event of spill, Biodiesel is 98 per cent biodegradable within 30 days and it has around the same toxicity as common table salt.
Social: The provision of Biofuels allows end users and consumers to exercise a conscious environmental choice in fuels.
Economic Benefits:
Value adding products within regional areas will result in flow on effects to regional businesses, whilst providing improved air quality with obvious health benefits. Using domestically produced materials will result in a lower environmental and dollar cost.
What do you see as the top impediments to Regional Businesses?
Extreme cyclical nature of the weather makes it very hard to build a business that is largely dependent upon climate on a year to year basis, when profitability can be so variable.
On the positive side though we are lucky in this region that major companies have invested heavily, so there are a good reserve of well qualified people.
What future opportunities do you see for Regional Businesses?
Environmental and renewable type applications should feature strongly. For example solar, wind, biofuels, should see similar growths in regional Australia as in many other countries, and obviously higher demand will fuel better prices for grains and cereals as they will be required for inputs into biofuels production.
Advances in research should see, within in the next 5 years the production of ethanol from cellulose based feed stocks, as opposed to carbohydrate based ethanol, the later is produced using inputs such as corn, wheat and sugar. Whilst cellulose uses traditionally low value or waste streams such as straw, wood chips or any cellulose based material. This has the potential to significantly reduce the cost of the inputs and therefore ethanol prices at the fuel bowser. |
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