The proponents behind the Northern Oil Advanced Biofuels Pilot Plant at Gladstone plan to build a $5.3 million biocrude and biofuel laboratory at the site over the next few months.
Southern Oil and JJ Richards & Sons, joint venture partners in the Northern Oil Refinery at Yarwun, are constructing the laboratory.
The Australian Renewable Energy Agency (ARENA) announced this week it would tip in $2.37 million for the project and Southern Oil will contribute the balance of the cost.
The laboratory will be part of the planned $16 million pilot plant at the site and will help to determine whether a compelling business case can be made to build a commercial scale biorefinery to produce renewable diesel and jet fuels.
“The Northern Oil Advanced Biofuels Pilot Plant is scheduled to open in late 2016 and is the next step towards a $150 million, commercial-scale biofuel plant,” Southern Oil managing director Tim Rose said.
“Together with this new world-class laboratory, which is being built with the support of the Federal Government’s Australian Renewable Energy Agency, we take another critical step towards the development of a new renewables fuels industry for Queensland and Australia.”
Mr Rose said that, within the next three years, the Northern Oil Advanced Biofuels Pilot Plant aims to have produced one million litres of fuel for use in field trials by the US navy as part of its Great Green Fleet initiative, by the Australian Defence Force for the navy, by Australian heavy road transport operators and possibly for the aviation sector.
The plant 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 chief executive officer 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 Southern Oil had struck in-principle agreements with Muradel and Licella for the supply of biocrude for refining, demonstrating how ARENA-supported companies could 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.”
Southern Oil is an Australian company that has been re-refining waste oil since 2001 and was the first company in Australia to produce fully re-refined lube oil to international standards.
The $5.3 million laboratory project at Yarwun is scheduled for completion in March 2019.