THEY’RE back - after being flavour of the month in the middle years of the decade, renewable fuels were knocked out of the water over the past three years, and consigned to the scrap-heap by many.
A combination of rising grain prices, falling oil prices and ambivalence on the behalf of governments across the world after reports that grain-based biofuels were contributing to world hunger meant that the ethanol and bio-diesel sectors contracted markedly, with planned developments withering on the vine in Australia and production slowing through other countries, including the US, in spite of its strong ethanol mandate.
However, the pendulum is swinging back, with rising oil prices and falling grain values bringing biofuels back into the picture as a viable economic option.
Executive director of Renewable Fuels Australia Bob Gordon believed the same fundamentals that led to the massive interest in biofuels earlier in the decade remained a strong driver and had combined with the more favourable market conditions to put biofuels under the microscope again.
He said there had been enough progress in economically creating ethanol from cellulose to ensure grain ethanol would continue to be used in the interim as a ‘transition fuel’ as the world neared peak oil production.
The strong American push continued to have a big influence on the biofuel industry, Mr Gordon said.
“The critical factor is that they are pushing ethanol very hard as part of their oil dependency strategy, (Barack) Obama has reinforced that since he has been in power.
“They are encouraging more investment and moving forward more quickly with cellulose technology.”
He said the underlying issue of meeting world energy needs faced with dwindling oil supplies remained.
“It won’t be just ethanol or biodiesel, but gaseous fuels as well, their big role will be as key transition fuels once we reach peak oil, and I think its going to be important that Australia has the infrastructure there to use alternative fuels.”
The change towards more favourable market conditions for ethanol was highlighted by Pacific Seeds’ sorghum and bioenergy global manager Scott Gibson.
“Grains such as corn were being bought for top dollar when the drop in oil prices occurred, which made biofuel operations very difficult. With corn prices back to around $4 and oil prices up to $80 per barrel, it becomes profitable again,” Mr Gibson said.
He said the Australian grains and sugar industries would benefit from having an alternative market competing for product.
Mr Gibson used the example of Brazil, where farmers were making more money out of their sugar cane producing sugar rather than ethanol, but still supported bioenergy production for the extra security it offered.
“Farmers would like to see a greater number of outlets for their produce and that is what bioenergy can provide for the producer.”
He said that the three ethanol manufacturing facilities in Australia – located at Sarina, Sydney and Dalby – which ferment their ethanol from sugar, grains, and sorghum respectively could ramp up production to 350 megalitres of ethanol by 2012 if high crop quality can be maintained.
Mr Gordon said he saw a mixture of focus on traditional grain ethanol, biodiesel and new technologies such as cellulosic ethanol, which will can use cellulose from by-products such as crop residue or wood chips.
However, he said it was important while work continued on new technologies to continue to keep up with traditional grain-based ethanol.
For ethanol’s revival, he said complimentary businesses such as feedlots were still needed to make use of the by-product of making grain-based ethanol.
“Out of the grain used to make ethanol, some 35pc goes back into the food chain in the form of feedlots as a higher protein feed stock.”
Mr Gibson said work was continuing on sorghum varieties bred specifically for energy production.
“Pacific Seeds are utilising three breeding programs in Australia, the United States and Argentina in order to get high yields, high starch levels, high digestibility and good hybrid vigour.”
“Advances in sweet sorghum and energy sorghum as a feedstock for bioethanol production is a very high priority.”
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