Australian Biodiesel Group Opportunities for biodiesel AOF Forum - 11 October 2006 Randal Jitts General Manager ABF
About ABG Limited ABG is the nation s largest producer, founded in 2001 Two Australian facilities with a capacity of 200 million litres pa. Internally developed technology, offering feedstock flexibility. Vertical integration strategy to secure feedstock supply JV established in North America to develop production facilities. Existing customer base Independent fuel distributors & retailers Trucking fleet operators Local governments Transport and marine operators 2
Why Biodiesel? Peak Oil 3
Global Markets not a level playing field Europe High diesel prices, farmers subsidized for growing energy crops. Importing Canola to meet demand. USA Gov t support for Biodiesel use, Soy being replaced by Corn for Ethanol production, changing traditional market forces. Malaysia Large producer of Palm Oil, building over 12 biodiesel plants currently, pushing up world Palm prices. India Rapid development of tree plantation based Biodiesel feedstock and biodiesel plants to meet domestic demand. Australia Limited Biodiesel production and viable feedstocks. Lack of Gov t incentive for Biodiesel use by growers. 4
Australian Biodiesel production... an update Company ABG Limited Aust. Renewable Fuel Natural Fuel Australia Axiom Energy Riverina Biofuels Operational Capacity Narangba, QLD - 160ml pa Berkeley Vale, NSW 40ml pa Largs Bay, SA 45ml pa Picton, WA 45ml pa Darwin, NT 147ml pa* *(near completion) Construction or Development North America X 3 sites Brisbane feasibility 45ml Port Botany, NSW Geelong, VIC 150 ml pa Port Botany, NSW Deniliquin, NSW 125ml pa Ecotech Narangba, QLD 45ml pa Biodiesel Industries Rutherford, NSW 12ml pa Biodiesel Producers Barnawartha, VIC 60ml pa TOTALS Operational: circa 500ml pa New expected: circa 650ml pa (Australia only) 700-800ml per annum of domestic production by 2009 or around 5% diesel market share. (Patersons Securities 2006). 5 Other producers/proposals: SA Farmers Fuel, Future Fuels, Evergreen, Biosel
How is Biodiesel manufactured? Tryglicerides R'"COO R"COO R'COO CH 2 CH CH 2 3 CH 3 OH catalyst R'''COOCH 3 R''COOCH 3 R'COOCH 3 + HO HO HO CH 2 CH CH 2 Used Cooking Oil Tallow Canola Oil Methanol triglyceride methyl esters (biodiesel) glycerol Methyl Esters Summer grade Biodiesel Winter grade Biodiesel Glycerin 6
External pressures on the Biodiesel industry Govt Policy * Tax * Environment * Specs 80% of cost Feed Qty * UCO * Tallow * New oil Biodiesel Industry Offtake * End User * Oil Co. * Quality Feed Price * Weather * Trade Oil Price * Peak Oil * Oil wars 7
Feedstock considerations for Australia Oxidation stab. (>6h) 9 7 1.2 3 28 5 13 Flash Point (>120 C) 155 150 162 165 156 121 114 FAME (>96%w/w) 97.7 96.5 82.6 93.5 98.3 43.0 33.1 Cloud Point ( C) -5 1 19 7 13-5 -4 Approximate Cost MT $950 $900 $550 $500 $700 $950 $750 Canola Tallow Cotton UCO Palm oil Coconut PK Olein Expensive Limited Qty Imported 8
Australia can not wait for traditional crop development programs 250 200 150 100 50 0 New Crops Since 1960 Value of Production A$ Million Chickpeas Triticale Canola Soybean Sunflower Mushrooms Lupins Cotton 1961 1965 1969 1973 1977 1981 1985 1989 9
Key requirements for Australia's Future energy crops? Economic for Growers (realistic sell price and rotational benefits) Economic for Processors (realistic buy price and sell price) Sustainable land use (not competing with food chain) High yield (over 50% oil in seed) Maximum use of by-products (meal, biofumigation) Suit dry land conditions (Drought, greater WUE) Rapid expansion capability (dedicated GM regions) 10
Challenges and Opportunities for Biodiesel Supportive Gov t policy (level playing field for on/off road users) Source of viable feedstock (Limited domestic soft oil supply) Petrodiesel supply chain uptake (Efficient storage, blending, retail) Consistent product quality (Biodiesel code) Support from Engine manufacturers (B20 to B100) Support from all associations (BAA, RFA, AOF, NFF, etc etc ) Support for growers (Regional Sustainable Model) 11
Regional Sustainable Model Short term Oil 100% Tallow UCO Biodiesel Plant Medium term Oil Biodiesel Seed 100% Crush Mill Glycerin Long term Meal Feed Mill Stock feed 12
Questions? 13