The Australian Customs and Border Protection Service is investigating a complaint by Biodiesel Producers Ltd that American biodiesel is being dumped onto the Australian market, undercutting local producers.

The US subsidises biodiesel, which is commonly made from food crops there. Last year the European Union imposed anti-dumping import duties on biodiesel from the US.

Chris Attwood, general manager of Biodiesel Producers, said that "We are hoping the Australian government will prevent imported biodiesel from, if you like, double dipping on subsidies since they are getting a subsidy in the U.S. and then they are arriving here in Australia and also getting a subsidy under the cleaner fuels grant."

Biodiesel producers in the US get a tax break worth about 30 cents a litre while Australia’s cleaner fuels grant provides a tax break of about 40 cents a litre.

Scientists at Innoventures Canada (I-CAN) have reported significant progress towards creating a system that would convert carbon dioxide diverted from industrial facilities into valuable products using Earth’s oldest plant life – micro-algae.

I-CAN is a not-for-profit consortium of ten Canadian research corporations who have joined together for key strategic projects. Its CARS project – Carbon Algae Recycling System proposes to feed flue gas, such as CO2, directly from industry into ponds to feed the growth of micro-algae, which would then be harvested and processed into value-added products such as ethanol, bio-diesel or fertilizer  These would be sold to offset the cost of capturing the carbon. The initial project aims to consume up to 30 per cent of the greenhouse gases produced by the average 300 megawatt coal-fired power plant.

According to John McDougall, vice-chairman for I-CAN “Algae growth research isn’t new, but our goal is. Other algae projects are aimed at creating bio-fuels. The goal of CARS is to provide industry with a sustainable, affordable way to deal with their greenhouse gas emissions.”

In Australia, scientists at the University of Queensland are developing a technique for obtaining hydrogen from micro-algae. Micro-algae grow in a two stage process. In essence, they use sunlight to split water into hydrogen and oxygen and then combine the hydrogen and oxygen with carbon dioxide to form new growth. However, they need sulphur for the second stage of the process.  If the amount of available sulphur is restricted, they are unable to form new growth and the hydrogen is released.

According to Peter Isdale, Chief Executive Officer Institute for Molecular Bioscience at the University of Queensland, algae ponds covering an area of 33 square kilometres could produce enough hydrogen to supply all of Queensland projected energy needs for the year 2020. "That’s an area about the size of the city of Mt Isa. But in fact it does work out that at the efficiency level that we project, that hydrogen will be produced, that such a small area of ponds would actually produce the energy that you’d need."

Yesterdays half-yearly report from Natural Fuels Limited explained the closure of Australia’s largest biodiesel plant in Darwin. The plant opened in November 2006 and reached full capacity in March 2007, although there were continuing quality control problems.  Rapidly increasing feedstock prices have made the production of biodiesel uneconomic in Darwin. The plant will be used to refine glycerine until feedstock prices return to levels which permit economic production of biodiesel. Work will continue on resolving the quality control issues at the plant.

Natural Fuels’ Darwin plant

The closure of the Darwin plant follows the closure of two other biodiesel plants, one in Adelaide and the other near Bunbury, Western Australia, by Australian Renewable Fuels late last year. Max Ger, ARF’s acting General Manager, blamed the closures on the rapid increase in the price of tallow, which was the feedstock for the plants. The price of tallow soared from less than $600 a tonne to more than $900 a tonne within six months as a result of demand from China. Mr Ger also said that changes to the Fuel Tax Act by the former Federal Government "made it impossible for us to sell biodiesel to anyone but the oil majors" which gave the oil companies the power to control the biodiesel industry.

Another biofuel company, Agri Energy, has shelved plants for big ethanol plants at Swan Hill and Murtoa in Northern Victoria because of high grain prices. The company plans to continue with projects in the United States.

On a positive note for the industry, Tasmania’s first specialty biodiesel plant has been approved, to start operating as early as July. The plant, to be built at Cressy by Macquarie Oil,  will produce more than five million litres of fuel each year for the transport and marine industries. Because of the high price of more conventional feedstocks like canola, the Tasmanian plant will use poppy seed and, possibly, mustard and linseed oils.