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Australian biofuels industry says COVID-19 pandemic the perfect time to review energy policy

ABC Health logo ABC Health 16/05/2020 By Erin Somerville
a bottle of water on a table: Biodiesel is made from a diverse range of feedstocks. (ABC Goulburn Murray: Erin Somerville) © Provided by ABC Health Biodiesel is made from a diverse range of feedstocks. (ABC Goulburn Murray: Erin Somerville)

Australia's bioenergy industry is calling on the Federal Government to better promote domestic use of green fuels that are being produced in regional Australia and shipped overseas.

The industry representative body, Bioenergy Australia, is calling for the development of a Clean Futures Target and Bio Industries Fund for Australia.

It's a move the industry says could better secure the country's fuel supplies and help create more jobs, particularly in regional Australia, after the COVID-19 pandemic.

Under the proposal, a Clean Futures Target would work towards the decarbonisation of the national transport, gas and heat sectors.

Measures to achieve this include a Clean Fuels Target with a 10 per cent reduction in transport-related greenhouse gas emissions relative to 2020 levels by 2030, as well as a Renewable Heat Target, a Green Gas Target, a Jobs Target, and a Net Zero Organic-to-Landfill Target.

In addition to the Clean Futures Target, the proposed  Bio Industries Fund would align with a Commonwealth Government Bioenergy Roadmap to ensure that projects can progress immediately.

Bioenergy Australia said the move could significantly benefit manufacturing and employment prospects in regional areas, with feedstock used for bioenergy-related processes readily available from rural activities.

"Our strong position is that Australia should take up a similar mechanism to what the USA has, particularly California, which is a low-carbon fuel standard, and what that requires is a 10 per cent reduction in emissions over 10 years across the fuel mix," Bioenergy Australia CEO Shahana McKenzie said.

"If you just looked at an E10 mandate across all of Australia, that would create 8,000 jobs just in itself in terms of production locally of those fuels.

"And it isn't just about the emissions. This is really, from our perspective, one of the beautiful things about bioenergies, in particular biofuels — it's almost exclusively regional.

"These are transition economies and industries that can be really replacing those traditional coal and fossil fuel-based economies in regional Australia, and providing those high-paid, high-skills jobs all the way through."

Bioenergy Australia said the move could help reduce reliance on imports — an issue that has been highlighted during the COVID-19 pandemic.

"It's a pivotal moment…to really identify how we want to reinvest in the development of industries in this country and value-adding to our products," Shahana McKenzie said.

Aussie biodiesel fuelled by exports post-pandemic

It's been almost a year since Australia's largest renewable biodiesel producer restarted operations in north-east Victoria.

Before the pandemic, Just Biodiesel — which produces its fuels mainly from tallow and vegetable oil — had plans to produce up to 50 million litres of biodiesel each year at its Barnawartha site.

It had ramped its operations up to around two-thirds of its capacity, and last year began shipping about 50 per cent of its product overseas. It planned to increase its export margin again this year.

Europe and the US are its biggest market, with biodiesel mandates in place there that require refiners to blend a certain amount of biofuels into their fuel.

The pandemic has slowed the global demand for fuel, but Just Biodiesel has been able to retain its staff of 11 employees.

When demand begins to ramp up again, the export market is where the company will continue to focus its energy.

"In Australia there's no mandate, so the biodiesel pricing is basically compared to the price of mineral diesel," Just Biodiesel general manager Greg Boyall said

"We have seen the price of a barrel of oil drop to as low as $20 recently, which has had the effect of lowering mineral diesel prices.

"Biodiesel domestically can't compete with the mineral diesel prices."

Mr Boyall said biodiesel produced at Barnawartha will primarily be exported to USA and Europe, where the company is optimistic about demand and strong markets, unless there is a significant change in Australian government policy to increase domestic demand.

"We're actually focusing on where the opportunities lie for us, and at the moment that's predominately in making sure we can reach the export markets and making sure we have a reliable customer over there." 

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