GAINING further consumer acceptance rather than continuing low grain prices is the key to a strong Australian ethanol industry, according to United Petroleum’s ethanol general manager David Szymczak.
Mr Szymczak - whose company owns the Dalby Bio-Refinery, one of Australia’s major grain-based ethanol manufacturers - said that while low grain prices meant ethanol was more profitable in the short-term, gaining wider market acceptance was still the major goal.
He said continued resistance from the major oil companies, who did not manufacture ethanol was holding back expansion attempts.
“There has been some trashing of the product, which hasn’t helped.”
Mr Szymczak called upon State governments to support Australia’s small-scale ethanol industry.
“Other States need to follow NSW’s lead and introduce mandates, and once it is up and going I think it can be a very large industry here, no matter what grain or sugar prices are doing.”
Mr Szymczak said biofuel would become increasingly important if Australia was to avoid geo-political issues.
“We are very reliant on imported oil at present, and if we want energy self-sufficiency, biofuel will be an important part of this.”
He said sugar and sorghum would be the two most cost-efficient crops to make ethanol from, however work continued on second generation ethanol.
“There is still a lot of work going on with cellulosic ethanol, and I’m confident that eventually the technology will be there to make it cost-effective, and that will open up a whole range of other plants as possible sources of ethanol.”
In the interim, he said, the industry was not calling out for hand-outs, but rather ongoing support to enable investment.
“It’s not assistance, just encouragement to let would-be investors know there is a commitment to a biofuel industry.”
Mr Szymczak said the US example showed how ethanol could go from a niche industry backed up by government support to a massive, mainstream business.
“It’s absolutely huge over there, and there is a big future for it, investors are building bigger plants and more of them.”
The Australian ethanol industry, however, received some unwanted publicity in recent weeks, with a report from the Productivity Commission finding that ethanol produced by the Manildra Group - the other major player in the Australian ethanol industry - was just 42 per cent more efficient than unleaded petrol.
This is crucial, as it means the ethanol falls short of the benchmark set by the NSW government’s office of biofuels, which set a target of 50pc.
In turn, this may mean NSW government ethanol mandates are in jeopardy.
Manildra has said in the past its ethanol is produced from waste products and therefore virtually emissions-free.
Manildra managing director John Honan did not respond to repeated calls from Rural Press.
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