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What are Biofuels?:

A "Biofuel" is a term generally used to describe fuels derived from either fermentation of biomass ("fuel ethanol") or processed from vegetable, animal and waste oils ("biodiesel").

As a "renewable" replacement for crude-oil derived fuels, Biofuels capability in Victoria has potential advantages both environmentally (direct emissions and sustainability) and economically (regional development, impt substitution).

However commercial, technical, and economic risks associated with reaching an industry critical mass remain high.

Background:

The Victorian government has set a target of 5% Biofuels (400 mission litres of ethanol or biodiesel) by 2010.

In the 2005 Moving Forward Statement, the Government also committed to developing an industry road map for the Biofuels industry. This road map is now completed and due for release in mid April 2007. It identifies the need for industry and government action on a number of fronts in order to grow the Biofuels industry – including regulation, distribution and marketing of Biofuels.It also identifies that current biodiesel production capacity in Australia is greater 280ML, however actual production is well below this figure.Expansion of the industry hinges on further market development, in particular consumer demand for Biofuels.

The development and use of Biofuels will assist regional economies by attracting new investment in plant and equipment as well as reducing air emissions in urban environments.

Supplies:

One biodiesel plant in under construction near Wangaratta and others are being planned for Geelong. Some retail supplies are available in Melbourne and country Victoria as well as bulk delivery to depots.

Industry Development:

The expansion of the biodiesel industry is dependent on the increased uptake of biodiesel by the transport industry. Announcements have been made by Linfox and Pratt to trial biodiesel with Axion Energy.

Key Factors to be addressed in the future:

  • The establishment of guidelines for storage, transport and handling of biodiesel
  • Commitment from oil majors, independents, Governments and key stakeholders to the use of biodiesel
  • Setting of standards for biodiesel
  • Gaining some commitment for a sustainable predictable tax regime
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