Australian government moves toward ethanol mandates

By | October 02, 2006
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Federal and state elections in Australia in the next year are creating opportunities to nurture growth in the biofuels industry, according to Bob Gordon, executive director of Renewable Fuels Australia. Progress came in August as two states announced plans to consider ethanol blending mandates. "We're hoping that we can get over those remaining barriers for getting ethanol and biodiesel into the main transport fuel markets," he told EPM.

There is a growing realization that perhaps the only way to get oil companies to accept ethanol is to introduce mandates, Gordon said. Queensland and New South Wales are leading the way with that idea, putting pressure on the federal government to put federal mandates in place as well.

Two of the three existing ethanol plants in Australia are operated in Queensland, a northern state where most of the nation's sugarcane is grown, Gordon said. CSR Ltd. produces about 16.9 MMgy, while Rocky Point Distillery produces about 2 MMgy or more.
New South Wales is on the east coast of Australia and is the largest populated state in the country, Gordon said. The Manildra Group operates a 26 MMgy ethanol plant south of Sydney, Australia, in this state. If policy settings are made more favorable to ethanol, the group anticipates it could double the capacity of that plant, he told EPM.

Ethanol plants in Australia produce a mix of industrial- and fuel-grade ethanol, according to the Australian Government Department of Industry, Tourism and Resources Web site. The Manildra plant takes in waste wheat starch for feedstock, while CSR and Rocky Point produce ethanol from molasses, a by-product of sugarcane operations.

Currently, the only subsidy for Australian ethanol producers is a fuel taxation exemption, which equals 38 cents per liter, Gordon said. While that has been essential to existing producers, it doesn't help spur new growth. Financial incentives and increased confidence of financial institutions to move forward with the construction of new plants is a crucial factor for the future of the industry, he said.

Gordon said he would also like to see all vehicles in Australia come off the assembly line as flexible fuel vehicles. "It would be a relatively low-cost initiative for the government, and it would provide a big boost for the ethanol industry in particular," he said.
The National Roads and Motorists' Association (NRMA) in Australia considers biofuels essential for the country's future, according to Alan Evans, president of the organization. NRMA would like to see the federal government require service stations to have ethanol-blended fuel pumps available so motorists have additional fuel choices. "We believe that one of the ways to make sure that people both use ethanol and feel comfortable about it is to make sure that it is readily available," Evans said. "At the moment, ethanol-blended fuel is only available at a limited number of service stations."