Transport fuels shortage? Gen2 biofuels are a real prospect for Australia

Recent world events have brought the issue of fuel supply into extremely sharp focus and while much public attention is currently focused on the government’s new auto industry plan, something of more significance perhaps to the average Australian is how they power their daily trip to work or the shops.

In no fuel sector does Australia have fewer obvious alternatives than in transport fuels.

In searching for solutions all the alternatives present challenges - policy challenges, environmental and ethical challenges, economic challenges and risks (including security of supply) and engineering, infrastructure and research implementation challenges.

But one area of the transport fuels conundrum in which Australia seems positioned to advance strongly is in Generation 2 biofuels.

Australia has modest prospects in the domain of Generation 1 biofuels - ethanol and biodiesel - where a fledgling industry is established, based mainly on food by-products, within an uncertain policy environment.

While there is some room for growth, competition for scarce resources, including water and agricultural land well-suited for food production, make it unlikely that a substantial Generation 1 industry could further develop in Australia without market distorting mandates or subsidies, despite the compelling need for transport fuels security.

But in the Generation 2 biofuels domain, where non-food resources dominate, Australia may be well-situated to establish a thriving future industry, based on the prolific and lower-value resources which Australia has in abundance.

The significant potential for the economic conversion of lignocellulosics to ethanol and specialised algae strains to biodiesel warrant enhanced commitment to focused Australian RD&D in this sector - which should be aligned with the significantly greater RD&D efforts of other nations.

In a major report on Biofuels, the Australian Academy of Technological Sciences and Engineering (ATSE) recommends that a national Biofuels Institute be established, along the innovative lines of the recently announced Global Carbon Capture and Storage Institute, the National Low Emissions Coal Initiative and the soon-to-be-created Australian Solar Institute.

These models, building on the clustering and industry-creating experiences of a number of Cooperative Research Centres, are expected to be able to go further than CRCs realistically can.

With strong governance, guaranteed funding and appropriately focused international linkages, it says the impressive cadre of Australian researchers in the bio-industries could come together far more effectively than through the fragmenting competitive grant-driven step-by-step processes that characterise much of Australia’s RD&D.

Team building, sought by many but seriously inhibited by competition for scarce funding, could be dramatically enhanced, as could creative relationships between RD&D, industry and government.