Government assistance to alternative transport fuels

If, like me, you have often read about how the incoming excise on alternative fuels is going to make it difficult for the fledgling industry to compete against fossil fuel the following article may provide some clarity. It is a few years old so if anyone has a current version please let me know.

Government Assistance to Alternative Transport Fuels.pdf

Commonwealth of Australia 2006: Government Assistance to Alternative Transport Fuels (PDF)

In basic terms LPG, CNG, LNG, ethanol and biodiesel are excise free until 30 Jun 2011. From then on excise gets applied at different rates through to 2015 depending on the type of fuel. Click the image above to read more.

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Koreans patent seaweed to ethanol

The Korea Institute of Industrial Technology has filed an International patent application for a method of producing biofuel using sea algae.

This is the first time I’ve attempted to read a patent and I’ve got to tell you that most of it makes no sense whatsoever. However, some of it is in plain English.

Abstract

The present invention relates to a method of producing biofuel, more specifically a method of producing biofuel comprising the steps of generating monosugars from marine algae, or from polysaccharides extracted from marine algae by treating the marine algae or the polysaccharides with a hydrolytic enzyme and/or a hydrolytic catalyst; and fermenting the monosugars using a microorganism to produce biofuel. The method of producing biofuel of the present invention solve the problem of raw material suppliance since it uses marine algae as a raw material for biomass, and reduce the production costs by excluding lignin eliminating process that has been required by the conventional method using wood-based raw materials, resulting in economic and environmental advantages.

Description of the Related Art

Compared with other type of land biomass, marine algae are growing very fast (4 – 6 harvest per year is possible in subtropic region) and easy to cultivate using wide arable area of the ocean without using high priced materials such as irrigation water, land, fertilizer, etc. Utilization of marine algae takes advantages of simple production processes for biofuel because it does not contain lignin that has to be eliminated. In addition, the amount of annual CO2 absorption ability of marine algae is 36.7 tons per ha, which is 5 – 7 times higher than that of wood-based. Therefore, if E20 (gasoline containing bioethanol by 20%) is used, the annual greenhouse gas reduction rate will be approximately 27%, which will reduce carbon tax approximately 300 billion Korean Wons, if converted into money value.

Sounds good to me as long as we don’t do the same thing to the oceans that palm oil plantations are doing to rain forests.

If you understand the technical aspects of this particular technology and can translate it into something most of us can understand you can find the patent here. Feel free to contact us with a translation.

Source: New Scientist

Reading: Fuel for thought

While digging around the Commonwealth Scientific and Industrial Research Organisation (CSIRO) web site I discovered Fuel for thought, a publication by the Future Fuels Forum 2007. This June 2008 publication informs us how the Future Fuels Forum thinks transport fuels will pan out in our future with modelling from now to 2050.  It is an interesting document and I suggest you read it if you are at all interested in the future of transport fuels in Australia. Click the cover page below to download the PDF (1.5Mb).

challenges and opportunities (PDF)

CSIRO 2008: Fuel for thought - The future of transport fuels: challenges and opportunities (PDF)

Apart from being relatively easy to read and informative for those of us without a scientific or economic background it provides great insight into the conservative information upon which our governments are making decisions that impact your future and mine. It isn’t all conservative mind you. The modelling for a continuing rise in demand for oil and a sharp decline in supply shows we could pay as much as $8 per litre for petrol in the not too distant future and the authors do stress the urgency with which alternatives for oil must be found.

While the document was written before the global financial crisis really started to bite the bulk of it remains relevant. If you do read it I’d like to know what you think so please leave a comment.

South Australia boosts research into algal biodiesel

Research into the production of biodiesel from algae in South Australia has been boosted by the granting of $1.2 million to Flinders University and South Australian Research and Development Institute (SARDI) from the Premier’s Science and Research Fund. The grant is being matched by Sancon Resources Recovery, the SARDI and Flinders University to total a $4 million investment. The goal is to develop a proof-of-concept facility to explore production of algal biodiesel feedstock and high value co-products.

SARDI will lead the development of the algae production system while Flinders University will focus on the production of high value co-products from the biomass after the oil for biodiesel has been extracted. This process is similar to the petrochemical industry where petroleum fuels (the main product) and high value petroleum based chemicals all result from the one refining process. For this reason both SARDI and Flinders University are referring to their model as a bio-refinery.

The proof-of-concept will include a pond facility on Torrens Island that will utilise nutrient rich saline water from the Port River estuary, carbon dioxide from adjacent power plants and solar energy to produce the algae. In the ponds will grow an algal strain that SARDI will develop from their existing collection of native strains that show high oil production potential. SARDI also have the considerable task of optimising the algal production systems, reducing production costs, ensuring scalability and developing harvesting and extraction technologies.

No information has been provided on the intended use of the technology by Sancon Resources Recovery but given they specialise in waste reprocessing it appears likely they are interested in monetising high nutrient waste streams.

CSIRO investigates energy efficiencies for Australian grain growers

CSIRO scientists have been investigating potential opportunities in energy efficiency, regional biodiesel self sufficiency and bioenergy production for Australian grain growers. The research is explained in an article entitled Bioenergy opportunities for grain growers in the December issue of Farming Ahead magazine.

The article explains that there is potential for Australian grain farms to improve energy efficiencies, become self-sufficient in biodiesel and use stubble for energy production. Nitrogen fertiliser was found to be the most energy-intensive input. When combined with diesel fuel use the two account for about 70 percent of total energy inputs when conventional farming methods are used. Amongst others, the researchers examined the use of crop rotation using legumes to replace nitrogen fertilisers and on-farm or regional biodiesel self sufficiency to remove the need for diesel use.

The article concludes that it is possible for grain farmers to significantly reduce their energy inputs but these reductions will require trade-offs in the amount of grain produced. The authors say it is physically possible for most grain farms to achieve self sufficiency in biodiesel but the economics of farm and regional scale biodiesel production are not favourable at the moment.

Australian Biodiesel Group gains access to new technology

In November 2008 the Australian Biodiesel Group (ABG) announced a planned strategic alignment with White Mountain Group (WMG). This alignment was in the form of an investment of $16 million in ABG by WMG and the transfer of a patented and commercially proven biodiesel technology to ABG that produces low cost renewable diesel fuel. Today ABG has foreshadowed the strategic alignment will take place early in 2009 subject to finalising due diligence and gaining shareholder agreement.

After reading both press releases a number of times I’m still not sure I have the facts straight as the information provided is sometimes contradictory and vague.  Hopefully future press releases by ABG and WMG will provide a clearer insight into the new arrangements. My best efforts in decyphering the information concludes that there are five significant aspects to the deal that will take place if the alignment goes ahead:

WMG, a US company operating in Arizona, will own 51 percent of ABG.

WMG want to convert ABG’s existing facilities to run the  Solverdi process by mid-2009. The Solverdi thermal depolymerization process shears long chain oils into renewable fuel through the use of heat, vacuum and pressure. Part of the $16 million investment will be used for licensing the technology and the installation of a new processing and refining plant to be located on current ABG premises.

ABG will have access to the Danzik Shallow Water Reactor Process which is also owned by WMG. This technology enables waste water to be processed into biodiesel when the waste water contains long chain polymers such as grease or oil. The waste water is converted without chemicals such as methanol and caustics used in traditional biodiesel production.

ABG will transform into a company that makes biodiesel and produces electricity at the feedstock source, presumably though some form of cogeneration using waste heat. This has been indicated by ABG saying it always wanted to be a vertically integrated energy and waste recycling company and WMG saying they have secured a large renewable energy consumer in Australia that has agreed to a beta installation beginning in March of next year.

Finally, it will give ABG worldwide rights (exclusive of North America) to license and operate additional new facilities to produce renewable fuels or convert existing or redundant biodiesel facilities to the new technologies.

With the Australian biodiesel industry clearly on its knees right now the infusion of more efficient technology may give it a much needed boost.

The state of ethanol

On the 6th of December 2008 the New South Wales State Government announced that they will triple the existing 2 percent ethanol fuel mandate in the next two years and mandate a 10 percent ethanol blend (E10)  in all regular grade unleaded petrol (RON 91 – 93) by 1 July 2011. They will also introduce a 2 percent biodiesel mandate. Apparently higher octane unleaded petrol will not require ethanol content.

This announcement has been welcomed by the ethanol producers that supply NSW fuel companies. It has also been welcomed by NSW grain growers as it gives them another market for their product. However, it hasn’t pleased everyone. There was even some desperate rearguard action in State Cabinet to defeat the Government’s plans to mandate the use of ethanol in petrol.

The Service Stations Association is concerned that because there is only one ethanol producer in NSW (Manildra) the mandate will give that producer “a blank cheque in setting prices”.

The Australian Lot Feeders’ Association is concerned that the mandate  “will increase grain and food prices for negligible environmental, fuel security or regional development benefit”. Australian Pork Limited are equally concerned for the same reasons.

Even the NSW Farmers’ Association, who you would expect to fully support the mandate, was cautioning that market forces, not Government intervention, should determine the percentage of ethanol in petrol.

While all this was hitting the news stands there was an explosion at the Manildra ethanol distillery at Nowra on the South Coast of New South Wales.

Manildra ethanol distillery

Manildra ethanol distillery: Michael Carter

According to the Manildra web site the distillery converts industrial grade wheat flour into its primary products of protein and carbohydrate. A by-product of the carbohydrate production is ethanol. The distillery was opened in 1992 to supply the the beverage, food, pharmaceutical, personal care, ink, cleaning and hygiene, surface coating and explosive industries. Production has been increased to meet the growing, and now mandated, demand for ethanol blended fuel.

One thing is certain. The use increased of grain in the production of ethanol, even if the ethanol is a by-product, is going ensure the fuel vs. food debate continues. This will no doubt be enhanced by the announcement that the Dalby Bio-Refinery in Southern Queensland has started processing sorghum and should be at full ethanol production by the end of January 2009.

Another debate that is ongoing is whether running your vehicle on E10 actually saves you money. Ethanol contains less energy than unleaded petrol so there is a price/performance trade off. A trial by Drive.com.au indicates that at current prices E10 may be cheaper but you need to buy more of it to travel the same distance. So much more that running E10 costs you more than running your car on regular unleaded.

Of course there is also the life-cycle emissions associated with first generation ethanol production that further complicate the picture. Ethanol producers paint their product in a very green light. Check out the Enhance Ethanol site to see what I mean. Enhance Ethanol is the name Manildra have given their ethanol. The benefits outlined on the Enhance Ethanol site are in stark contrast to some research that shows first generation ethanol lags behind fossil fuels when you include the emissions from farm machinery, fertilisers and processing. However, you can also find research that presents the opposite conclusion. One thing all the research appears to agree on is that the life-cycle emissions from second generation ethanol (cellulosic ethanol) are far lower than those of the ethanol we are currently using in transport fuels.

That all leaves me quite uncertain about the benefits of mandating ethanol in fuel until cellulosic ethanol production is viable in Australia.