The Biofuel Industry Is Ready to Expand
The biofuel industry says ethanol is easy to use because it is already in the Australian market.
In short:
Biofuels can replace some of Australia's crude oil use with organic matter to create fuel with lower emissions.
There has not been consistent demand for biofuels because imported fuel was cheaper.
What's next?
Advocates want a biofuels mandate to promote the industry's growth, lower emissions, and fuel prices.
Billions of dollars in investment will come if the government mandates biofuels in the fuel supply.
If the government decides on biofuels, investor Danny Elia can raise funds to build a refinery, lowering fuel prices.
Danny Elia would invest $3 billion in a plant to produce 8% of the country's aviation fuel.
Danny Elia manages $266 billion in investments for super funds and their members.
Fuel security has been a concern since the Middle East war affected global oil markets.
Biofuels can be a renewable alternative to fossil fuels, bolstering fuel supply.
The prime minister announced $10 billion to bolster Australia's fuel security, including expanding onshore reserves.
The government also announced $1.1 billion in grants to promote biofuel production last September.
Farmers are ready to supply biofuel raw materials.
Australia imports 77% of its refined fuel needs, with the rest refined from crude oil imports.
In February, only 9% of fuel used in Australia was pumped from its ground or waters.
Agricultural groups can help with fuel sovereignty by building a biofuels industry.
Farmers already supply products for biofuel industries overseas.
Australia has the ingredients for biofuels but lacks consistent demand for big investments.
$3 billion in super investment is ready and waiting.
IFM manages $266.1 billion in funds and can invest in a biofuels plant.
The plant would be built next to Ampol's refinery in Brisbane and be ready in five years.
GrainCorp will build a plant to crush canola for the new refinery.
Canola crops are a key component of biofuels.
The market needs strong signals about demand to trigger long-term investment.
More than $10 billion will be spent on fuel security to shield Australia from the Iran war's consequences.
Australia could produce a billion liters of low-carbon fuel by 2030 or 2032 with the right signals.
This could grow to 30-40% of liquid fuel by 2040.
Not a supply problem, but a lack of demand.
Biofuels like sustainable aviation fuel are more expensive to produce in Australia than imported fossil fuels.
Australia exports canola seed to make sustainable jet fuel sold back to Australia.
With global liquid fuel prices elevated, biofuels are competitive.
But this competitiveness may not persist if global crude oil prices fall.
Locally produced fuel would become more expensive than imported products without consistent demand.
The Australian industry cannot expand without consistent decades-long demand.
Mark Brown says investors need to know they will get a return on biofuels investment.
A demand-side mechanism like a government mandate would build confidence among investors.
Professor Brown points to overseas examples of successful bioenergy and renewable fuels.
Calls for legislated biofuel mandates are growing.
Barbara Kiss, a consultant, worked with ethanol producer Manildra Group.
She spoke about sugarcane biofuel blended with petrol for standard cars.
A sugarcane refinery belongs to the Manildra Group.
In the US, a demand-side mechanism ended up being a mandate.
The US federal government mandated the use of biofuels across the board.
Now E15, a mix of petrol and up to 15% ethanol, is available at 90% of US fuel stops.
Ethanol is the easiest biofuel to increase the use of, already in the Australian market.
An education campaign and legislated mandate are needed to boost ethanol consumption.
The body representing sugarcane growers shares similar sentiments on ethanol mandates.
An enforced ethanol mandate would build demand and justify new investment in supply.
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What are the downsides to biofuels?
Aside from higher costs, concerns include environmental impact and competition for agricultural land.
Australia has a small biofuels industry, with most output exported.
More than 70% of Australia's canola is exported to other countries for biofuels.
The biofuels industry is still behind the rest of the world.
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