Biofuel on the brink of becoming mainstream?

We are getting fairly consistent reporting that the biofuels industry in Australia is doing it tough. This quote from Bob Gordon, the Executive Director of the Australian Renewable Fuels Association, was in The Age a week ago:

Australia could produce 700 million litres of ethanol and biodiesel annually — twice the Federal Government target of 350 million litres by 2010. There were barriers to the biofuels market that stopped new entrants taking advantage of the Government’s biofuels subsidy — the lack of excise until 2011. This subsidy is only available when evidence is presented of the actual sale of ethanol into the transport fuel market. The brutal outcome is: no fuel sale, no fuel-excise benefit. If investors can’t get fuel into the marketplace, they can’t convince banks to lend them money.

Then reports like this one from Western Australia where a Biofuels Taskforce made 24 recommendations including:

  • That the State Government introduces a 5 per cent biofuel target of total transport fuel produced and consumed in Western Australia by 2010.
  • That the State Government introduces a 5 per cent biofuel mandate of total transport fuel produced and consumed in Western Australia by 2011 if the 2010 target is not achieved.
  • That the State Government purchase ethanol and biodiesel compliant vehicles that
    allow for the maximum biofuel standard.

And of course there is the New South Wales push towards 2% ethanol petrol blends by September this year and the fact that Queensland already has 200 petrol stations selling ethanol blended fuels and South Australia isn’t too far behind.

Add to this the Senate committee into Australia’s future oil supply and alternative transport fuels saying it considers

biodiesel can make a small scale but worthwhile contribution to Australia’s fuel mix

and

The committee is supportive of the development of an ethanol industry in Australia, but notes the very significant barriers that need to be overcome before it becomes a mainstream fuel.

So what’s the true story? Is it the confusing and politically convenient picture it appears to be or are biofuels on the verge of becoming mainstream in Australia? Let’s hope it is the latter.

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