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

By Robin Batterham - posted Monday, 17 November 2008


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.

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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.

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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.

Despite its fragmented and underfunded competitive RD&D effort in the biofuels area, Australia has many worthwhile initiatives.

Bioenergy Australia, as the national industry body, provides an effective leadership role in drawing the industry domain together. The National Collaborative Research Infrastructure Strategy (NCRIS) Biofuels Project is a worthy program but further steps, for example the recommended Biofuels Institute, are needed to improve mutual co-operation between Australian researchers and to build and sustain collaborative international arrangements.

ATSE urges the continuation of Australia’s engagement in the International Energy Agency’s Bioenergy Task 39, Commercialising First and Second Generation Biofuels from Biomass, current until 2010, and commends our membership of the Global Bio-Energy Partnership (GBEP) to further enhance meaningful international engagement.

ATSE takes a strong view that the use of biofuels to enhance Australia’s liquid transport fuel security must not be at the expense of food production.

It also emphasises that present Generation 2 biofuel technologies are not cost competitive, that an expanded RD&D effort is required and that biofuels research is fragmented and poorly co-ordinated and needs to be better funded.

It says Australia must enhance the knowledge base of its more promising biofuels resources and build on its significant existing strengths in biofuels research.

The report notes that Australia has limited biofuels production capacity which needs to be supported and that biofuels industry development must be directed not only to the production of economic transport biofuels but also to the creation of profitable co-products

It says Australia needs to recognise the human resources development issues required to provide the range and quantum of skills needed for industry development, both in Australia and overseas. Australia should also should respond effectively to the biofuels sector assistance needs of developing countries.

Australia can valuably draw from both the European Community and US in developing a vision for strategic biofuels research. Furthermore, given the very significant overseas funding, Australia should, where appropriate, conduct much of its R&D work in focused partnerships and/or joint ventures with appropriate international agencies.

Australia needs to develop clear-cut long term policies for biofuels, including an effective balance between ‘technology push’ and ‘market pull’, evaluation of biofuels production and distribution infrastructure and related logistics, a major injection of RD&D funding and better research clustering and cooperation.

A large-scale Australian biofuels industry will have to demonstrate robust credentials in greenhouse gas emissions, land and water impacts, financial viability and social acceptability.

The ATSE Report, Biofuels for Transport: a Roadmap for Development in Australia which was launched at the symposium as a blueprint for the future of Australia's biofuels industry, is available at
http://www.atse.org.au/index.php?sectionid=128

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About the Author

Professor Robin Batterham AO FREng FAA FTSE is President of the Australian Academy of Technological Sciences and Engineering and former Australian Chief Scientist.

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