The Australia biodiesel industry is still trying to negotiate deals with oil companies to ramp up production, despite the introduction of a second State mandate
There are some promising signs in Queensland following the introduction of mandate on January 1, however that is yet to flow through to the industry with supply contracts.
The Ecotech biodiesel plant, which is based just north of Brisbane, is only producing a fraction of its capacity.
The biodiesel sector has been hit by low oil prices and a major spike in feedstock prices which are key ingredients in the production process
This has made it very difficult to operate on a commercial basis.
Another plant at Barnawartha went into receivership 18 months ago and other plants have reduced production.
The cost of raw materials like used cooking oil and tallow jumped sharply 12 months ago with strong demand from Europe and the U.S where biofuels are strongly supported by government policy.
The biofuels mandate, which for diesel started at .05% this year, gave renewed hope to the industry in Queensland.
Biodiesel is blended with mineral diesel at 5% and known in the market as B5.
There have been some teething issues getting the supply moving again via oil companies which blend the fuel.
Hopefully, this will be resolved soon, so the plant can return to a commercial footing.
Biodiesel is an environmentally-friendly product which uses waste products, delivers lower carbon emissions and cuts pollution.