Industry pushes for mandatory biofuel blends across petrol and diesel
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E10 petrol and B5 diesel could become much more commonly available on service station forecourts if the Australian biofuels industry gets its way.
While biofuels have been on sale in Australia for decades, the take-up has not been strong.
With the Middle East war putting a sharp focus on both oil pricing and security, the Australian biofuels industry is pushing its case to have mandated biofuel levels using locally made ethanol in petrol and biodiesel in diesel.
E10 is a 10 per cent ethanol/90 per cent petrol blend, while B5 blends five per cent biodiesel with 95 per cent mineral diesel.
The local producers of biofuels, including the Manildra Group and lobbying bodies such as the National Farmers Federation, want the federal government to act in its support by rewriting the Fuel Quality Standards Act 2000.
Australian producers argue mandating biofuels would have a positive impact on pricing. It has not quantified that impact publicly.
E10 is usually slightly less expensive than 91 RON at Australian service stations. It has a higher 94 RON rating but slightly lower calorific energy.
The biofuels industry also wants 91 RON removed from the market. E10 blend would effectively replace 91 RON unleaded while 95 RON and 98 RON would remain unblended.
This push for mandatory biofuels does not involve E85 – 85 per cent ethanol/15 per cent petrol mix – which has effectively disappeared from Australian service stations. Unlike E10, E85 requires vehicle modifications to cope with ethanol’s corrosiveness.
Vehicles have been tested for years internationally to the E10 standard and almost all new petrol-fuelled vehicles sold in Australia can use it.
The industry says a mandatory biofuels mix would create a few extra days of petrol and diesel reserve.
The economic boost to refiners and agribusinesses involved is also part of the argument. Research by ARENA (Australian Renewable Energy Agency) has shown bioenergy potentially producing strong employment growth in regional areas.
“We already make ethanol and biodiesel here, so we are not asking the Government to invent a new industry,” a spokesman for the lobbying effort told carsales.
“We are asking for a simple policy setting that uses the Australian-made fuel we already have and creates the market certainty needed to draw more of it into the national fuel pool.
“Right now, Australian-made fuel is either being exported or production capacity is sitting idle because there is no binding domestic requirement for fuel companies to blend it here.
“In other words, Australia is exporting fuel security at the very time we should be using it at home.”
If it does get government buy-in, the biofuels industry says it would need time to ramp up renewable fuels production to provide enough ethanol and biodiesel to fully service Australia’s petrol and diesel consumption rates.
It has asked for 18 months’ tax relief to encourage industry members to invest in production. It estimates it would take 10 years to provide full E10 and B5 supply.
E10 is meant to be widely available in Australia already, but even in NSW and Queensland where blending mandates already exist, there are loopholes that mean little makes it on to service station forecourts.
Part of the proposal from biofuels refiners involves the federal government enforcing standards so oil refiners do provide E10 and B5 to their retailers.
Oil refiners are understandably less enamoured with the idea of E10 and B5 as it involves added cost via the purchase of the biofuel and then mixing it with petrol and diesel.
Environmentalists also question the value of biofuels. They argue many are refined from foodstuffs that should instead be used to feed people.
The biofuels industry claims that, if its proposal is adopted, more than seven million tonnes of greenhouse gas savings will be accrued by 2035.
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