Australia’s first grain-to-ethanol plant

Australia’s first grain-to-ethanol plant

Darling Downs sorghum growers have an attractive market for their grain right on their doorstep.

Key points
  • The proximity of the Dalby Bio-Refinery to sorghum growers offers compelling savings on transport.
  • Animal feed co-products from the ethanol process are high in protein and sought after.
  • Strong and direct relationships with growers, and flexible arrangements, are attractive to growers in an increasingly competitive market.



The Dalby Bio-Refinery

Historically, sorghum grain has been the ‘poor cousin’ to wheat and barley, which fetch higher prices. In Australia, it is largely sold as animal feed for piggeries, cattle feedlots and dairies.

Since 2008, Dalby Bio-Refinery, located 200km west of Brisbane, in the heart of Australia’s largest sorghum growing region – the Darling Downs – has been offering local growers a convenient new market at competitive prices.

The biorefinery is Australia’s first grain-to-ethanol plant.

It buys around 200,000 tonnes of sorghum grain a year from local growers, from which it produces 76 million litres of fuel-grade ethanol.

Dalby Bio-Refinery Ltd is one of 3 major ethanol plants in Australia and the first ethanol plant in Australia to use sorghum as its feedstock.

1 tonne of sorghum grain can produce up to 400 litres of ethanol, which is enough to fill up 80 small cars (50 litre tanks) with e10 fuel. e10 is a blend of 90% petrol and 10% ethanol.

The biorefinery

  • Commissioned in 2007, the biorefinery cost $140 million to build.
  • The biorefinery is the first ethanol plant in Australia to use sorghum as its feedstock.
  • Ethanol is produced by breaking down the starch in the sorghum grain to create sugars, and then fermenting the sugars.
  • 1 tonne of sorghum grain can produce 400 litres of ethanol.
  • At full capacity, the biorefinery produces 76 million litres of fuel ethanol and 160,000 tonnes of wet distillers grain (‘wet cake’) each year, from about 220,000 tonnes of sorghum.

Sorghum as feedstock

Grain sorghum is an excellent crop for sustainable ethanol production because it produces the same amount of ethanol per bushel as comparable feed grains and uses up to one-third less water to grow.

From an ethanol production standpoint, grain sorghum is equal to corn as an input.

In theory, the higher the starch content in the grain the more ethanol you can produce.

How the process works

The ethanol is produced by fermenting sugars within the sorghum grain.

  • The process begins by grinding (milling) the sorghum into a fine powder called meal.
  • The meal is mixed with water and an enzyme to create a mash, which is then heated to turn the starch in the meal into a liquid (liquification).
  • The mash is then cooled and another enzyme is added, which converts the liquid starch into fermentable sugars (saccharification).
  • Once this process is complete, yeast is added and the mash is placed into a series of fermenters (fermentation). This is where the yeast converts the sugars into ethanol.

The biorefinery produces ethanol by fermenting sugars sourced from sorghum grains. Source: DBRL

Location is key

The biorefinery’s location in the heart of Australia’s largest sorghum growing region – the Darling Downs – is a key success factor.

Dalby sorghum grower John Crothers has been supplying the biorefinery for 5 years:

“Financially, the decision to supply the ethanol plant for us is its close destination. It’s 16 km down the road and it’s on our way to other markets, so it makes sense that the biorefinery is our first stop.

“We are saving $10 per tonne of sorghum we truck to the biorefinery compared to trucking it 20-30 km further to feedlots or Graincorp in Dalby West.”

John Crothers saves $10/tonne in transport costs by trucking his grain to the biorefinery instead of further afield.

John Crothers

Sorghum grower and supplier to Dalby Bio-Refinery Ltd

  • Region: Dalby, Queensland
  • Farming area: 1600 hectares
  • On-farm storage: 4000 tonnes
  • Distance to biorefinery: 15 km
  • Average % of grain yield supplied to biorefinery: 60-70% or about 5000 tonnes/year

Availability of feedstock

Derek Peine is General Manager of Dalby Bio-Refinery. One of the first things that the biorefinery did, he says, as part of its feasibility study, was to understand the overall feedstock supply in the region.

“It is critical that you have a clear understanding about how much raw materials is available and how you are going to sell your product,” says Derek.

“The Darling Downs is not only the hub for sorghum in Australia; it is also a hub for the feedlot industry. So it made sense to locate the plant here in Dalby, close to our sorghum suppliers and close to a sustainable and ready-made market for our co-products.”

Dalby Bio-Refinery Ltd is one of 3 major ethanol plants in Australia and is the first ethanol plant in Australia to use sorghum as its feedstock.

High value co-products

‘Wet cake’ and syrup are produced as part of the ethanol process. Both products are high-protein, high value animal feed.

“When we distil the ethanol, we collect the residue from the fermenting process and centrifuge it to separate grain solids, which is the wet cake, from the liquid soluble, which becomes the syrup,” explains Derek.

Wet cake and syrup have higher concentrations of protein, fat, fibre, vitamins and minerals than dry sorghum, making them valuable feed for livestock.

Dalby-based grain merchant Tobin Cherry of DalGrains buys as much wet cake as he can get from the biorefinery and sells it to south-east Queensland dairies and feedlots. The syrup he sells as liquid feed for young sheep.

Wet cake, a by-product of the ethanol refining process, is a valuable feed for livestock.

“Our major market for wet cake is the dairy industry,” says Tobin. “It is a very, very good product for those guys, it is very high in protein, and it is reasonably priced. We usually ship out about 350 tonnes per week.”

Direct relationships with growers

Derek Peine believes that getting to know each of the growers who supply the biorefinery has been critical to its success.

“We like to have a direct relationship with the grower,” says Derek.“We want to know how their crop is progressing and to understand their business risks. In this way, we can better work with them to ensure that it is a win-win proposition for both parties.”

John Crothers agrees that this approach has been mutually beneficial, particularly during recent years when grain quality was below spec.

The biorefinery needs about 200,000 tonnes of sorghum each year.

“In the season just gone by [2012-13], we had prolonged wet weather prior to harvest,” says John. “That put a mould on the grain because it was in damp conditions and it also sprouted the grain. We were able to talk through our situation with the biorefinery and still get a reasonable price.”

Storing the grain

The biorefinery has limited grain storage capacity, so it needs about 500 tonnes of grain delivered every day.

Growers need to be able to store large quantities of grain on farm and truck it to the biorefinery year round.

John Crothers has 4000 tonnes of storage capacity on farm, which enables him to harvest and sell it when he wants to.

“We like the agreement [with the biorefinery] as we get to control our own destiny”, he says.

The location of the biorefinery in the heart of Australia’s sorghum growing region is a big drawcard for growers, who save on transport costs.

Andrew Bartley, another local sorghum grower who supplies the biorefinery, also enjoys the flexibility that on-farm storage offers:

“We have 3200 tonnes of storage here which allows us to be able to market the grain through the year and try and pick the best times to sell.

“This means we don’t have to be delivering off the header. We don’t have to find an immediate home for the grain. We can store it as soon as we harvest, which also makes for quicker harvests.”

In 2012, Andrew Bartley sold 95% of his sorghum crop to the biorefinery.




Andrew Bartley

Grain grower and supplier to Dalby Bio-Refinery Ltd

  • Region: 16km north-west of Dalby, Queensland
    Commodity: dryland cropping – sorghum, wheat, chickpeas and mungbeans.
  • Farming area: 1700 hectares
  • Storage: 3200 tonnes
  • Distance to bio refinery: 15km
  • Amount of grain sold to ethanol plant: 90% of sorghum yield or about 4000 tonnes/year

Price is the key for some growers

While it is convenient for local sorghum growers to sell most of their grain to the biorefinery, some growers are prepared to sell to the highest bidder.

“The bio-refinery is just another end-user that has come to our area”, says John Crothers. “They are no different to a piggery, another feedlot, or another chook farm. They are just a consumer that is out there doing their best; they want to make money, and they are using something I grow, and I think that is a great thing.”

In 2012-13, China entered the Australian sorghum market for the first time, offering high prices for quality sorghum to meet its booming domestic market for alcohol distilled from sorghum.

The demand from China saw up to 70,000 tonnes of sorghum shipped out of Brisbane a month. According to Tobin Cherry, this puts sorghum into a “completely new ball game”.

“Once China got their teeth into it, they just continued to buy up and were pretty much prepared to pay whatever they needed to get it,” says Tobin.

Grain merchant Tobin Cherry, sees China’s entry into the Australian sorghum market as a game-changer.

Tobin Cherry

Owner operator of DalGrains, based in Dalby

  • Buys sorghum from a wide range of grain growers in northern NSW and southern Queensland to on-sell to the biorefinery.
  • Trades 7000 tonne of sorghum a year.
  • Buys wet cake from the biorefinery to on-sell to feedlots/dairies.
  • Trades 300-350 tonne of wet cake and 70 tonne of syrup a week.

 

“That had a detrimental effect on the ethanol plant in terms of what they perceived they could afford to pay for sorghum grain.”

Derek Peine says because of this and other unforseen circumstances, it is important for a bioenergy plant to always look forward and to have a contingency plan.“We are always focusing on the future, and we work hard to make sure that we are prepared for whatever happens,” he says.

“If the cost or availability of sorghum grain reached a certain level, we would need to look at other feedstocks, such as corn, wheat or barley. That’s why we are already trialling these other feedstocks, so that we are ready.”

Three staff members constantly monitor the refining process to make sure the operation is working at optimal conditions.

Find out more

Contacts

Derek Peine
General Manager
Dalby Biorefinery Ltd
T: 07 4660 6333
Email: d.peine@dbrl.com.au

Tobin Cherry
Grain merchant
DalGrains
T: 07 4669 8777, 0418 244 699
Email: tobin.cherry@dalgrains.com

John Crothers
Sorghum producer
T: 0428 556 983
Email: sodbuster@activ8.net.au

Andrew Bartley
Sorghum producer
T: 0429 639 759
Email: l.a.bartley@bigpond.com