Bioenergy markets: Ethanol
Facilities and capacity to produce ethanolProduction of biofuels in 2010–11 represented around 1% of Australia’s petrol and diesel production, according to the publication, Energy in Australia 2013, published by the Bureau of Resources and Energy Economics. There are 3 major fuel ethanol production facilities in Australia. These facilities produce ethanol primarily from wheat starch, grain sorghum and molasses. Total capacity to produce ethanol is around 440 million litres a year. Around 68% of this occurs in New South Wales, at a single production facility in Nowra. This capacity is currently enough to meet Australia’s ethanol needs, but increasing demand could encourage new suppliers to produce ethanol. Table 1. Fuel ethanol production facilities in Australia, 2012
|Manildra Ethanol Plant, NSW||
|Dalby Biorefinery, QLD||
|Sarina Distilleries, QLD||
Policies and regulation
Fuel standardsFuel quality standards have progressively improved in Australia, with the aim of reducing the adverse effects of motor vehicle emissions on air quality and human health and to enable Australia to effectively adopt new vehicle engine and emission control technologies. E10, a grade of standard unleaded petrol containing 10% ethanol, is offered as an alternative to unleaded petrol, largely in eastern Australia. E85, a grade of standard unleaded petrol containing up to 85% ethanol, is offered through a small number of metropolitan fuel outlets. (Source: Energy in Australia 2013, published by the Bureau of Resources and Energy Economics, page 92.) Fuel quality and labelling standards are given by the federal Department of the Environment for:
Mandated ethanol salesIn Queensland , parliament passed the Liquid Fuel Supply (Ethanol and Other Biofuels Mandate) Amendment Bill 2015 on 1 December 2015. The Bill requires the fuel industry to meet targets for the sale of bio-based petrol, such as E10 ethanol-blended petrol and bio-based diesel. Initial mandates are:
- 3% for petrol. In practice, this means that at least 30% of regular unleaded petrol sales must be E10 (because E10 is only 10% ethanol blended with regular unleaded petrol).
- 0.5% for bio-based diesel.
- there is enough ethanol supply to meet the mandate
- there is not enough demand for ethanol to meet the mandate
- several factors affect demand for E10 fuel
- market operation issues make it difficult to achieve the mandate.
Excise and taxation arrangementsUnder the Ethanol Production Grants program, grants are provided to ethanol producers for ethanol produced and supplied for transport use in Australia from locally derived feedstocks. (Source: Energy in Australia 2013, published by the Bureau of Resources and Energy Economics, page 95.) The intended outcome of the program is to:
- encourage the use of environmentally sustainable fuel ethanol as an alternative transport fuel in Australia
- increase the capacity of the ethanol industry to supply the transport fuel market
- improve the long-term viability of the ethanol industry in Australia.
Grants and incentivesA number of national and state-based grants and support services are listed in the Grants and incentives section of this website.
Suite 5, 651 Canterbury Road, Surrey Hills, Victoria 3127
Phone: +61 (03) 9895 1250
147 David Hill Road, Monbulk, Victoria 3793
Department of Agriculture and Food, Western Australia
University of Western Australia, Nedlands WA 6907,
Phone: 0448 879 757