Biorefinery the missing link in Australian biofuels industry

Australia’s first ‘biorefinery’ capable of producing renewable diesel and jet fuels from plant material could become a reality in Queensland.

The Australian Renewable Energy Agency (ARENA) is providing $2.4 million funding support for Southern Oil Refining (SOR) to develop and construct a state-of-the-art biocrude and biofuel laboratory in Yarwun, near Gladstone. The project will inform the feasibility and design of a proposed commercial scale biorefinery.

Queensland Premier Annastacia Palaszczuk announced the $16 million biofuels plant in March. If successful, the Northern Oil Advanced Biofuels Pilot Plant will be expanded to a large commercial-scale refinery costing $150 million and producing 200 million litres of advanced biofuel annually, suitable for military, marine and aviation use.

The plant will be the country’s first commercial-scale advanced biofuels production facility.

It will use biomass material such as sugarcane bagasse and possibly prickly acacia as feedstock for the production of bio crude oil, which will then be distilled into saleable kerosene and diesel products.

ARENA CEO Ivor Frischknecht said there was clear potential for biofuel production and refining in Australia.

“Our agricultural industries have an abundance of plant waste that can be ideal biocrude feedstock and there are several potential markets for selling green fuels including aviation, shipping and defence,” Mr Frischknecht said.

“ARENA has previously supported Australian companies like Muradel and Licella to develop innovative technologies for producing biocrude but there is currently no way of refining this into large quantities of useable biofuels.

“A new biorefinery would be the first step in providing the missing link in the development of an Australian biofuels industry.”

Mr Frischknecht said SOR has struck in-principle agreements with Muradel and Licella for the supply of biocrude for refining, demonstrating how ARENA-supported companies can work together towards achieving commercial outcomes.

He said the economic opportunities could be significant.

“The United States Navy has a 50 per cent target for alternative energy sources by 2020 and the Royal Australian Navy has signed an agreement to explore using more environmentally friendly fuels, significantly increasing demand for green-fuels,” Mr Frischkencht said.

“Major Australian airlines are also considering these fuels to meet industry-agreed emission reduction targets, with Air New Zealand and Virgin Australia recently announcing a partnership to investigate options for locally produced aviation biofuel.”

The project would help to determine whether a compelling business case can be made for building a biorefinery capable of producing renewable diesel and jet fuels.

“SOR will carry out testing and reporting to produce valuable knowledge for Australia’s bioenergy industry. New protocols for the conversion of biocrudes to drop-in fuels will also be established,” Mr Frischkencht said.

“This new knowledge and infrastructure is an important and necessary step towards attracting further investment in the biofuels supply chain in Australia.”

The $5.4 million project is scheduled for completion in March 2019.