Transcript Federal Government Policies for the Australian Ethanol

Australian Government Policies for the
Australian Biofuels Industry
Jan McCallum-Johnston
APEC Energy
Department of Industry, Tourism and Resources
October 2006
Australian Government's Biofuels Policy Framework
350 mega litres by 2010 Biofuels Target – Ethanol & Biodiesel
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Up from 28 ML in 2005
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Commitment to encourage target achievement a key policy driver
Key supporting policies:
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Prime Minister's Biofuels Taskforce
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Biofuels Action Plan
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$37.6 million Biofuels Capital Grants Program
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Biofuels Production Grants
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Ethanol Distribution Program
Prime Minister's Biofuels Taskforce
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Formed May 2005 to investigate environmental and health benefits of
biofuels and assess progress towards 350 ML target. Found:
– There are potentially significant health benefits from the use of
biofuels in addition to already documented environmental and
regional benefits
– The biofuels industry faces considerable market barriers including
low consumer confidence and high commercial risk; and
– On current policy settings the 350 ML target would not be met
Response to Biofuels Taskforce
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The Government reaffirmed its commitment to the 350 ML target
Key supporting measures:
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Actively encouraging users of Government vehicles to purchase E10
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Undertaking vehicle testing of E5 and E10 blends to validate vehicle
performance and a study on health impact of ethanol
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Working with Federal Chamber of Automotive Industries to ensure
accurate information about compatibility of vehicles with ethanol
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Increasing fuel quality compliance inspections to ensure ethanol blends
meet fuel quality standards
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Allowing E5 blends to be sold unlabelled, subject to the results of
vehicle testing
Biofuels Action Plan – December 2005
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Key outcome of Biofuels Taskforce
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Individual plans from major oil companies, members of the
Independent Petroleum Group, and major retailers
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Sets out volumetric targets and marketing strategies for ethanol and
biodiesel
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Will increase biofuel use from 28 ML to exceed 350 ML target by 2010
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Australian Government will review progress on a six-monthly basis
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Following first review in June 2006, in aggregate companies will meet
their commitments
Research & Development
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Biofuels Taskforce found that there is great potential for future
advances in biofuels production from use of lignocellulosic feedstocks
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It was concluded that future policy interventions in this area should be
limited until further developments in production technologies were
realised
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Despite this, Government is lending its support to R&D of new biofuel
technologies through its Renewable Energy Development Initiative
(REDI)
REDI Projects
CSR & University of Queensland's 'SugarBooster' Program
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Awarded $5 million to develop high-yield sugarcane for ethanol
production
Australian Renewable Fuels micro-algal biodiesel
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Awarded $348,100 to develop biodiesel from micro-algal feedstock
Biofuels Capital Grants Program
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Program established in 2003 to support new or expanded biofuels
production capacity
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Competitive process judged on merit of business proposals
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7 projects awarded funding
– 4 biodiesel projects totalling $25 million
– 3 ethanol projects totalling $12.6 million
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The completed projects will increase Australia's biofuels production
capacity by 291 ML
Biofuels Production Grants
Ethanol Production Grants
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38.143 cents per litre paid to domestic ethanol producers per litre of fuel
ethanol produced
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Grant fully offsets excise applicable to ethanol making it effectively excise
free
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As of July 2006 $61.2 million dollars in grants have been paid and 158
ML of fuel ethanol produced since 2002
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Grant will be phased down in steps from 2011 to 2015 to halve ethanol's
excise rate and give ethanol a long term 50% excise discount
Biofuels Production Grants
Biodiesel Cleaner Fuels Grants
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38.143 cents per litre paid to domestic biodiesel producers and importers
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Grant fully offsets excise applicable to biodiesel making it effectively
excise free
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As of June 2006 approximately $4.5 million dollars in grants had been
paid and 12 ML of biodiesel produced since 2003
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Grant will be phased down in steps from 2011 to 2015 to halve
biodiesel's excise rate and give biodiesel a long term 50% excise
discount
Recent Policy Developments
Prime Minister's Alternative Energy Statement – August 2006
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Ethanol Distribution Program
– $17.2 million over three years
– Support for fuel retailers to install new ethanol compatible pumps or
convert existing pumps for ethanol use
– New and existing ethanol retailers will receive additional funding if
they can meet ethanol sales targets