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.

The Green Car Innovation Fund summarised

On Friday the 6th of February 2009 I attended a one of the Green Car Innovation Fund (GCIF) consultation sessions being held around Australia. My motivation for attending was primarily to find out how the Fund was going to work and to try to get an idea of the impact of the fund on the Australian car industry.

First, a little background. The Green Car Innovation Fund Framework Paper was released in December 2008 for public comment. The Government is inviting written submissions from interested parties in the Framework Paper. The closing date for written submissions is 5:00pm (Canberra Time) on Thursday, 12 February 2009. Submissions can be sent to:

The Manager
Green Car Innovation Fund
GCIF@innovation.gov.au

The stated objective of the GCIF is to reduce vehicle fuel consumption or greenhouse gas emissions by enhancing research and development (R&D) and commercialisation of Australian technologies. It is only applicable to the car industry. Technologies for trucks, buses and motorcycles are not within scope. Nor is anything to do with alternative fuel infrastructure. The GCIF provides $1.3 billion in grants over 10 years beginning in July 2009. That said, Holden and Toyota have already been drinking at the well with their small car and hybrid Camry initiatives to the tune of $149 million and $35 million respectively. The funding is planned to be provided on a $1 for $3 basis.  This ratio may change as a result of the consultation sessions. Most agreed that 1 for 3  was useful for large companies but it was not practical for smaller companies and start-ups.

Grants will be allocated on a competitive basis and are open to all Australian companies or individuals willing for form a company. The funding is available via two steams.

  • Stream A is for the Motor Vehicle Producers (MVP) (Ford, Holden and Toyota). Each MVP will have access to a maximum of $300 million.
  • Stream B is open to all Australian companies, consortia or individuals not included in Stream A. A MVP can be part of a consortium in Stream B but it can’t be the lead applicant.

Importantly, despite the Stream A cap per MVP, there is no defined split in the funds available to Stream A and Stream B. The goal is to provide funding to those technologies that will provide the best results. More on that later.

Funded projects must be undertaken in Australia and directly relate to the creation, acquisition, application or commercialisation of knowledge, technology, processes, materials or products which:

  • are new or additional to the applicant
  • significantly improve the fuel-efficiency or greenhouse gas emissions of passenger motor vehicles

Technology can be acquired Internationally and adapted to use in Australia.

The GCIF will support:

  • R&D
  • Proof-of-concept
  • Early stage commercialisation
  • Pre-production development

The criteria against which applications will be judged are:

  • reduction in fuel consuption or greenhouse gas emissions
  • technical merit, extent and calibre of the innovation
  • capacity and capability of the applicant to undertake the project
  • commercial potential
  • contribution to a competitive Australian automotive industry and benefits to the economy

All the criteria seem logical but the most interesting thing I got from the presentation was the emphasis on that last point. While the fund is looking to reduce the fuel consumption or greenhouse gas emissions by 10 – 15  percent against the status quo baseline it is also heavily biased towards creating jobs, improving workforce skill sets, providing benefits to suppliers and growing the automotive industry in Australia. In hindsight that is obvious but I guess I went in thinking the Federal Government might actually be focussed on improving the products from our car industry to give local consumers better products and make the vehicles more competitive in export markets. It seems they are as long as that improvement comes with the creation of more jobs. Further information can be found on the GCIF web site.

An interesting aspect to the presentation that I wasn’t expecting was a politician and an inventor using the opportunity to address those assembled to seek support for their individual projects.

Source: Department of Innovation & AusIndustry presentation

Victoria to get a new biodiesel storage and blending facility

According to the Victorian Government their citizens will soon have better access to biodiesel. The Government has given a $2 million grant for a new Melbourne-based blending and storage facility to Biodiesel Producers Limited (BPL) for the construction of a $4.3 million BPL biodiesel facility in Melbourne. The new facility will be based at a major fuel distribution terminal.

Until today I hadn’t heard of BPL so I’m guessing you haven’t either unless you are a Victorian. They are based in Barnawartha, 20km south of Albury-Wodonga, and are producing biodiesel mainly from tallow and smaller quantities of used cooking oils and canola oil.

Biodiesel plant

BPL: Biodiesel plant

The BPL plant uses technology acquired from Austrian company Biodiesel International AG to produce 60 million litres of biodiesel per annum, all of which meets the rigorous Australian, European, US and NZ Biodiesel Standards.

Source: The Premier of Victoria and Biodiesel Producers Limited

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.

Will trucks or trains absorb future freight growth?

A short post by Bob Murphy at Business Spectator suggests that larger trucks will absorb freight growth in Australia providing the big rigs have adequate road infrastructure and defined routes to haul massive loads. Mr Murphy sites the fact that road networks have more coverage than rail networks and that trucks pay their own way (unlike rail) and concludes that larger trucks will win over rail in the future.

What about factoring in the price of fuel and that rail is more efficient than road on a tonne per kilometer basis? Road may be winning now but rail will surely reassert itself when fuel prices increase again. I suspect the Federal Government knew this when they announced a $1.2 billion investment in Australian Rail Track Corporation in December 2008 as part of the $4.7 billion Nation Building Package.

Whatever the reason for the investment in Australian Rail Track Corporation it seems obvious that road and rail will continue to share Australia’s freight haulage duties. The percentage carried by each will depend on how efficient they use fuel. When taken in this context trucks do seem to have an advantage in that some trucking companies are using LNG and CNG to reduce their fuel costs and emissions. However,in the two years that I’ve been writing on Envirofuel I’ve never heard of Australian freight train operators investigating alternative fuels. I hope that is because I haven’t been listening in the right places rather than complacency in the rail world.

City Living versus The Great Australian Dream

For a few years now I’ve harboured a dream to be able to live life without a car. I have this imaginary lifestyle in my mind where I live in the centre of a city. Everything I need is within walking or cycling distance. On the rare occasion that I need to do a long road trip I’ll just hire a car.

A series of articles that appeared recently in the Sydney Morning Herald and the Lithgow Mercury (here, here and here) got me thinking about it again. You see, Sydney planners are wanting to build an underground rail line from Central Station to Parramatta. Along that line they want to build high rise (up to 15 storeys) apartment blocks with the aim of encouraging their increasing population to live withing walking distance of the new mass transit system. From a sustainable mobility perspective the Sydney plan sounds great. The problem is the planners are fighting The Great Australian Dream. The big house with the big backyard.

Aussies want at least four bedrooms, two bathrooms, a double garage and room for the kids to run around out the back. The Great Australian Dream is the main driver behind urban sprawl in all our capital cities. To get the big block you have to live in the outer suburbs. Living in the outer suburbs means you will most likely need to drive a car to work, if not all the way then at least to the nearest decent public transport. As a result The Great Australian Dream clogs our roads in peak hour and causes us to curse everyone else following the same dream we are.

The sad news is that the Great Australian Dream is a lifestyle that is unsustainable in a peak oil world. The Sydney planners know it and so do a lot of other people, particularly Europeans who are practiced at living the width of a wall away from their neighbours. The rising cost of oil as supplies diminish will increase demand for public transport but Governments will be unable to build and maintain the infrastructure required to service the urban sprawl. We are going to have to adjust our definition of living and part of that adjustment will be living closer together, closer to public transport and closer to work.

Right now I’m almost living The Dream. I’ve got a big yard in a very quiet neighbourhood. The house is small but I’ve got a big shed. The problem is that I’m 35km from work and about 15km from the city where my better half works. There is no nearby public transport so getting to work would involve a drive followed by multiple bus and train journeys. Cycling and working from home are my best options for reducing car use but neither can be achieved every day due to distance and the need to see clients or work at clients’ sites.

So, what would it take to get me living closer to my neighbours, closer to public transport and closer to work? I’ve been mulling this over for the last few days and it all comes down to two words – lifestyle and happiness. To achieve the lifestyle and happiness I desire when living in a city centre I’d need the living environment to meet five criteria.

1. I am not prepared to live in a shoe box. I’m a country boy and I like my space. That doesn’t mean I need a big house, it just means I need room to move and an uncluttered environment in which to live. Good views would help.

2. If I’m going to move from being surrounded by not much to living shoulder to shoulder then I want to do so in a truly environmentally friendly building. It will need to be well insulated, take advantage of winter sun and summer breeze and have lots of natural light and ventilation. The building or development will have its own power supply, preferably cogeneration or trigeneration powered by natural gas.

3. Silence. I don’t want to hear the neighbours and I don’t want them to hear me. I don’t want to hear traffic even with the windows open.

4. There will be secure storage for bicycles and general living stuff underneath the building. There should be no need to clutter the place up by bringing bicycles upstairs or locking them to anything you can find. Each tenant should have their own private storage space.

5. The building or development will need to have shared facilities that provide safe and secure space for kids and adults to be active and get outdoors. Ideally it would be in a precinct that restricts the entry of cars thereby freeing up as much space as possible for parks, barbecues, swimming pool, gyms, etc. To my mind the design has failed if it encourages or necessitates car use.

That’s it. If I could find a place like that I’d seriously consider moving to the city centre or a public transport hub. I’m not sure about you but I haven”t seen or heard of any developments that meet, or even come close to, the above criteria in my city or others.

This brings us back to Sydney. If the designers and developers of the urban living environments along the Central to Parramatta mass transit system are going to tempt those chasing The Dream to live in their developments they are going to have to focus on lifestyle, not just stylish buildings. They are going to have to provide outdoor living space while building high quality, high density housing. And they are going to have to make the developments environmentally friendly otherwise they’ve lost before they’ve begun.

Has the time come for high speed trains in Australia?

Having had a very positive experience using the Inter City Express (ICE) trains to travel around Germany I am a supporter of the service high speed trains provide for the public. It is fast, convenient, safe and cost effective. When powered by renewable electricity high speed trains also have a very low environmental impact. All things being equal I’d always take the train if I had a choice of flying or a high speed train in Australia. Air travel cannot compete with the convenience of boarding a train in one city centre and alighting in another to be greeted with a myriad of other public transport options to quickly get you to your destination.

German Inter City Express train

BusinessWeek: German Inter City Express train

The Very Fast Train consortium first proposed a high speed rail link between Melbourne and Sydney in the late 1980’s. The track was to go via Canberra and East Gippsland and cost around $5 billion. Journey times were to be 1 hour from Sydney to Canberra and 2 hours from Canberra to Melbourne. The proposal ended when the Federal Government did not agree to the tax provisions put forward by the proponents.

The Speedrail consortium subsequently proposed a high speed rail link between Sydney and Canberra. The consortium saw this as the first stage of a possible Melbourne-Canberra-Sydney-Brisbane network. However, this proposal stopped in 2000 when the then Federal Government and the Speedrail consortium could not agree on the level of government financial support required for the project.

On the back of rising oil prices (since subsided) and a greater emphasis on sustainable mobility the Canberra Business Council (CBC) has attempted to reopen the debate on high speed trains with a submission to the Infrastructure Australia agenda. The CBC submission uses the following key points to highlight the benefits of an East Coast high speed train network:

  • Improvements in technology, competitiveness and supply over the past decade.
  • Travel demand on the East Coast. The Melbourne – Sydney air route is the fourth busiest in the world and Sydney-Brisbane is ranks seventh in the Asia-Pacific region.
  • Increased economic standard of living for Australians.
  • Use for freight. High speed freight trains are in use in France and soon to expand across Europe.
  • Environmental sustainability and reduced greenhouse gas emissions.
  • Energy efficiency.
  • Better social outcomes, quality of life, and reduced social disadvantage for regional centres on the rail line.

To put this into perspective, countries which are extending their existing high speed train networks include Belgium, France, Germany, Italy, Spain, Switzerland, Japan and South Korea. New high speed train networks are under construction or being planned in The Netherlands, Poland, Portugal, Russia, Sweden, Vietnam, China, India, Iran, Saudi Arabia, Turkey, Morocco, Argentina and the USA (in California).

High Speed Rail for Australia, also by the CBC, highlights why Australia should look again at high speed rail. While none of the high speed rail projects listed above match the distances required in for a Melbourne – Brisbane line the technology is readily available and I’m sure Australians would use the service extensively once they understood the capabilities and convenience such a service offers. Unfortunately, history tells us that a project of this magnitude cannot succeed unless the Federal Government has the political will to make it happen.

The establishment of Infrastructure Australia by the current government may give high speed trains a fighting chance. One of the primary functions of Infrastructure Australia is to advise governments, investors and owners of infrastructure on Australia’s current and future needs and priorities relating to nationally significant infrastructure. The above submission by CBC was sent to Infrastructure Australia for evaluation and possible inclusion on the National Infrastructure Priority List. The first of these lists should be handed to the Council of Australian Governments in March 2009.

Source: Net Traveller