Queensland to implement biofuels mandate

Legislation introduced in the state of Queensland in Australia would mandate biofuels blending, starting at 2 percent, writes Mike Bryan of BBI International. This column appears in the August issue of EPM.
By Mike Bryan | July 23, 2015

The state of Queensland in Australia will be introducing legislation in Parliament that would, according to its press release, “Provide the first step toward growing our biofuels and biomanufacturing industries.” Currently the introduction rate would be 2 percent, however, there is strong pressure among ethanol stakeholders to set the target higher. “By increasing the mandate over time and in a measured way, we will help to ensure sustainable growth of both supply and demand,” said Mark Bailey, Queensland government minister of main roads, road safety and ports as well as energy and water supply.

This mandate has already met stiff opposition from the oil industry in particular and has been, as one might expect, politicized by those in opposition such as raising fuel prices, engine performance, consumer acceptance, environmental concerns and more. The difference, however, with this proposed legislation is that it does have significant bipartisan support.

The government has held numerous regional meetings across the state and has sought considerable input from all concerned parties. There is a bit of a twist in this proposal that sets it apart from previous proposals in that the legislation would aim to create a foundation for a broader biomanufacturing climate.

The Queensland government said that this legislation, “will provide certainty to the biofuel industry so that it can invest, innovate, grow and create jobs. While a thriving biofuels industry is highly beneficial in its own right, it will also help create the foundation for a new high-value, knowledge-based biomanufacturing industry for Queensland.”

The Liquid Fuel Supply (Biofuel Mandate) Amendment Bill 2015 prescribes a phase-in of ethanol blended fuel, with a 2 percent target to commence by July 1, 2016. While the legislation also prescribes a mandate for biodiesel, they have stated that further consultation would be required on that issue. This has raised concern from biodiesel manufactures who strongly believe the mandate for ethanol and biodiesel, should be enacted concurrently.

The primary ethanol feedstock in Queensland will be from the sugarcane industry, primarily in the far north and sorghum grown mostly in the southern region of the state. Currently, there is only one grain-to-ethanol plant in the country, located in Dalby, Queensland. The largest producer in Australia is Manildra, based in the state of New South Wales, using mostly a wheat-based feedstock.

In late June, when this was written, the chances of this legislation being adopted were quite good. The issues to be resolved will be the percentage, the ability of petroleum retailers to opt out based on supply, and a number of other factors such as consumer education, compliance and reporting requirements and penalties for noncompliance.

It’s a great step in the right direction for a country that has not had a great deal of environmental focus from state and federal government. It is the hope of the biofuels and biomanufacturing industry that it will attract investment and help build a clean, renewable energy future for the state and the country.

That’s the way I see it.

Author: Mike Bryan
Chairman, BBI International
mbryan@bbiinternational.com