David Sparkes, 02 December 2015

Australia’s biggest sugar milling company, Wilmar, says new legislation boosts the chances of bioethanol becoming a major contributor to the state’s economy.

The legislation passed through Queensland Parliament last night and sets a mandated level of 3 per cent ethanol in the state’s petrol and 0.5 per cent in diesel from January 1, 2017.

Wilmar Bioethnol general manager Garry Mulvay oversees the company’s ethanol facility at in Sarina, Central Queensland, and said the legislation would be a good start.

“I’m generally positive about that,” he said.

“We are pushing [the starting date] back six months, so it is starting in 2017 rather than next year, but I think that gives fuel retailers a little bit longer to get prepared, so on balance that is probably the right thing to do.”

Mr Mulvay was also happy the legislation included a mandated level of 3 per cent, rather than the original figure of 2 per cent.

It also ensures the mandate will increase to 4 per cent in 2018, a measure pushed by Katter’s Australian Party.

The legislation passed with bipartisan support, another positive sign for those hoping to build the industry.

“[That bipartisan support] tells me that Queensland is ready for this and that the opportunity is in front of Queensland not only for biofuels, but also for a broader bio-products industry,” Mr Mulvay said.

Grains to ethanol

There are two commercial bioethanol facilities in Queensland.

Wilmar’s facility in Sarina uses a by-product from the sugar cane milling process, while a facility owned by United Petroleum in Dalby, Southern Queensland, uses grain.

United Petroleum’s plant has been operating around 50 per cent capacity over the past year, due to a lack of demand.

Chief operating officer David Szymczak said he had hoped the mandate would come into place earlier this year, but was still optimistic production would increase once the mandate began.

“At full production we buy about 16,000 tonne of sorghum a month and obviously at the moment we’re buying around 8,000 tonne per month,” he said.

“So with the ethanol mandate and higher production, the grain demand from our refinery will be higher.”

Bad news for feedlots

While the legislation was good news for Wilmar and United Petroleum, others were less pleased with the outcome.

The state’s feedlot sector has long opposed an ethanol mandate at any level.

Australian Lot Feeders Association immediate past president Don Mackay said the legislation was unfair, because the ethanol industry would be in direct competition with feedlotters on the grain market.

“The reality is, you can’t move away from the fact that [the legislation] is promoting and subsidising one industry over another and I don’t think in a free economy like Australia that’s an appropriate thing to do,” he said.

A win for grain producers

Rural lobby group AgForce is counting the new mandate as a big win.

President of the group’s grains board Wayne Newton said he had been involved in the debate for many years and he was glad the mandate will finally be put in place.

“It’s probably in the order of 10 years that we have promoted and supported the introduction of a biofuels mandate in this state, and it’s really great to see it happen,” he said.

“In the first instance it’s going to see an expansion of the current ethanol producers.

“Both grain and sugar-based producers will look to expand their production and increase the amount they make and to do that they will need more input product.

“So for the Dalby Bio Fuels plant, they will need more of our grain, which is great for our growers.”

Rare moment of agreement

Katter’s Australian Party MP Robbie Katter said the passing of the legislation was a rare moment of bipartisanship in Queensland Parliament.

“It was a really strange feeling given that issue has had about five attempts in Parliament,” he said.

“That was the fifth attempt at getting it up, so we put politics aside and we could’ve looked back and thrown stones about people’s positions in the past, but everyone was on board.

“I compliment the leader of the opposition and especially the Government for getting this through.”

Extracted in full from ABC Rural.