BIOFUELS had been heralded as part of the solution in driving Australian motorists towards a clean green future.
But instead motorists and industry are shunning the use of alternative fuels according to a new Adelaide-authored report which calls for an overhaul of Federal Government support for the biofuel industry.
The Australian Biofuels 2017 report warns of a biodiesel industry in “free fall” and reveals a six-year consumption slump by motorists of fuel-grade ethanol.
The report found that total annual consumption of fuel-grade ethanol last year fell more than 95ML — its lowest level since hitting a 319ML peak six years earlier.
Demand for all biofuels also slumped significantly in 2015/16 to 255 ML – a decrease of 63 per cent on the previous year driven primarily by the sharp decline in biodiesel consumption in
“Australian motorists have been shunning ethanol blended fuel by switching to other grade fuels or seem unconvinced of the benefits of E10,” report co-author (10 per cent ethanol blended with petrol),” report co-author and APAC Biofuel Consultants chief executive officer Mike Cochran said.
“But more startling, the report reveals the Australian biodiesel market is in free fall.
“Biodiesel supply in Australia fell by 92 per cent — from 442 ML in 2014/15 to about 35ML in 2015/16.
“For 2016, we estimate Australia’s biodiesel production/consumption to be around 15 ML — continuing the stunning decline of the industry.”
Mr Cochran said that by APAC’s estimates, biofuels — as part of Australia’s overall transport fuel mix — slipped from 1.4 per cent in 2014/15 to 0.5 per cent in 2016.
Australia’s largest biodiesel producer Australian Renewable Fuels was placed in administration in January last year leading to the closure of its 40ML capacity Largs Bay refinery.
The Australian Biofuels 2017 report also levels criticism at the Federal Government’s support schemes.
It says that between 2006 and 2015, the Federal Government paid out $1.35 billion in grants to the ethanol and biodiesel/renewable diesel industries.
“We would argue that the Australian industry currently has little to show for that expenditure,” Mr Cochran said.
“The recent collapse of the Australian biodiesel industry is further evidence that the Federal Government’s biofuel support schemes need to be overhauled if they are to provide more effective and sustainable support to the industry.”
“One area requiring urgent review relates to the application of excise on biofuels.
“Imposing the full excise on biodiesel imports in mid-2015 was the largest single factor contributing to the recent decline of the Australian biodiesel market.
“Making biofuel imports ‘excise equivalent’ would need to be part of any overhaul of support schemes.”
Extracted from The Advertiser