An Update from Down Under

By Mike Bryan | January 14, 2011

I am living and working in Australia and thought perhaps it might be of interest to update Ethanol Producer readers on the Australian ethanol industry. Keep in mind that Australia is the size of the United States with a population of 21 million, so the market demands are much smaller.

The bulk of fuel ethanol is produced on the east coast and sold in the states of New South Wales, Queensland and Victoria. The three main facilities are:

• Manildra in New South Wales using waste starch has a capacity of 300 MMly (80 MMgy).
• Sarina in North Queensland using molasses has a capacity of 60 MMly.
• Dalby Bio-Refinery in south west Queensland using red sorghum has a capacity of 80 MMly.

E10 is available at more than 600 service stations nationally. These figures are expected to rise as availability and demand for biofuel blends increase since consumer education is a large part of the progression and acceptance of E10. In recent years, the oil industry in Australia has also started supplying E10 through more and more of its outlets. Caltex Australia has started rolling out its Bio E-Flex-branded E85 ethanol-petrol fuel pumps across Australia to coincide with the national launch of Holden’s E85-capable VE Series II Commodore in 2010-’11.

Australia’s reserves of crude oil are considered to be low with the reserves-to-production ratio estimated to be below 10 years. Australia has a national trade deficit in crude oil and refined products of $16 billion a year, heading for $30 billion by 2015.

The federal Ethanol Producers Grant provides for a 100 percent rebate of the excise duty to Australian producers (and is not available on imported product). A proposed change to the existing excise regime, a staged phasing out of the Ethanol Producers Grant through June 2020 to allow the domestic ethanol industry time to adjust, was announced in the 2010 Federal Budget papers. 

The New South Wales government has a legislated mandate for ethanol sales under the NSW Biofuels Act that began by requiring 6 percent of the volume of unleaded petrol sold in the state to be E10. This will be phased in until all regular unleaded petrol in New South Wales is E10 by July 2011.

The Queensland government drafted legislation to introduce an ethanol mandate requiring a minimum ethanol blend of 5 percent to be sold throughout Queensland, however, it was recently announced that a final decision to bring in a mandate will be delayed for at least 12 months, because of concerns that the mandated demand would be filled by imports. No similar mandates have been adopted by other states, or the federal government as of this date.

There are a number of projects that are currently under some stage of development; most, however, as in the U.S., are looking for financing.

That’s the way I see it!