The Australian Lot Feeders Association (ALFA), through its website and recent (4 February) media release, questions the many benefits of fuel ethanol. However, their primary, if unfounded, fear is that support for the ethanol industry will drive feed grain prices up by more than 25%.
The development of the fuel ethanol industry is no threat to the feed lot industry — quite the opposite.
“Locally-produced fuel ethanol has the potential to provide Australian industry, including the feed lot industry, with an environmentally-sustainable and economically-viable transport fuel,” said Bruce Harrison, Chief Executive Officer, Biofuels Association of Australia.
The Australian Lot Feeders Association (ALFA), through its website and recent (4 February) media release, questions the many benefits of fuel ethanol. However, their primary, if unfounded, fear is that support for the ethanol industry will drive feed grain prices up by more than 25%.
In 2005, ALFA commissioned the Centre for International Economics (CIE) to assess the impact of different levels of domestic fuel ethanol production in 2010. CIE assessed a range of volumes from just over 300 million litres (ML) (representing the current Australian Government target) to nearly 5,000 ML (assuming 10% ethanol in all petrol and 15% ethanol in all automotive diesel fuel).
Fuel ethanol consumption in 2007 was around 110 ML, and the BAA estimates 2008 consumption will be around 150 ML.
Of course, ramping up local production of fuel ethanol 45-fold in just a couple of years would alter the nature of the domestic grain market, but this is a ‘fanciful’ scenario. Just as unrealistic, a recently published Parliamentary Research Paper — which ALFA also relies on for its claims — considered the impact of a market more than 20 times the size of the current consumption.
“A realistic outlook for fuel ethanol consumption in 2010 is about 650 ML,” said Bruce Harrison. This is 50 ML less than CIE’s scenario 2.
Also, Australia will not be totally reliant on feed grain for its ethanol production because we already produce ethanol from other feedstocks like molasses and waste starch.
However, we do know that ALFA and the BAA share a common vision — the development of ‘2nd generation’ biofuels made from a much wider range of feedstock; and the widespread use of flexible fuel vehicles able to run on any ethanol blend from 0 to 85%.
“By the time the fuel ethanol market in Australia reaches 2,000 ML — never mind 5,000 ML — the lot feeders could have real fuel problems to face,” said Mr Harrison. “What will they do when, in 2015 (according to Royal Dutch Shell’s Chief Executive Jeroen van der Veer), there will not be enough petroleum fuel to meet demand? ALFA members will be relieved to know that there is an environmentally-sustainable and economically-viable Australian biofuel industry making the fuel to grow the grain they rely on.”
To be there for ALFA and the rest of Australia, the fuel ethanol industry needs continued support to develop vital supply infrastructure.
Biofuels are better — for greenhouse-friendly transport, energy security and better health.
