Building Out Biomass in the Land Down Under

Will Australia use bioenergy to its full potential, or primarily serve export markets?
By Patrick C. Miller | April 26, 2018

Australia’s bioenergy sector is alive and brimming with ideas about how to keep pace with progress being made internationally. However, biofuels advocates believe the country lacks a clear strategy, as well as policies to harness the environmental benefits and economic potential that biomass energy offers.

“In contrast to the U.S. and Brazil, where supportive policy environments have led to sustained growth in biofuels production and consumption over the past several decades, the biofuels industry in Australia has not developed to the same extent,” states a paper issued earlier this year by the Queensland University of Technology, titled “Biofuels to bioproducts: a growth industry for Australia.”

Heather Bone, director of Bioenergy Australia, which represents the country’s bioenergy industry, recently told the Sydney Morning Herald, "Biofuels have been the forgotten renewable, it has been the ignored cousin of solar and wind. The past 10 to 15 years, the industry in Australia has suffered from a lack of supportive policies or frameworks and risks emerged from policies that flip-flopped, and moving goalposts."

One bioenergy project that has attracted support from the state government in Queensland and potential funding through the Australia Renewable Energy Agency (ARENA), is the Burdekin BioFutures Project, backed by the Inkerman Canegrowers Organization Ltd. A preliminary feasibility study for the proposed plant has been completed.

The plant is expected to produce 140,000 metric tons (MT) per year of pellets made from the tops and trash of sugarcane grown in the Burdekin Shire of the Inkerman District of North Queensland in northeastern Australia. The district produces about 1.7 million MT of sugar cane annually. The plan is to harvest the sugarcane waste products—normally burned prior to harvest—and turn them into pellets. But the pellets will likely be exported to Japan, where they’ll be used to generate electrical energy, not used in Australia.

“The outlook for bioenergy in Australia is relatively limited with respect to electricity generation,” says Stewart Peters, Burdekin project manager. “There has been very little progressive support for the sector at a regulatory level, due to Green activism and their concerns regarding potential utilization of native forest residues.” 

From Trash to Treasure
Peters believes the Burdekin plant offers Australia a number of clear benefits. “It is a very environmentally sustainable project, immediately reducing carbon dioxide generation—even compared to forest-based wood pellets, which require 50 to 100 years for trees to regrow,” he says. “In addition, it delivers substantial social outcomes in respect of jobs and elimination of extremely high levels of black ash—known locally as ‘Burdekin snow,’ which drops from the sky across large areas including population centers. The project creates a pathway for delivering academic research and development—the breeding of biochemicals such as high poly hydroxy butyrate into sugar cane leaf.”

Peters says sufficient sugarcane is grown and burned prior to harvesting, to enable production of around 1 million MT of pellets annually. “Imported biomass into Japan is projected to grow beyond 10 million tons per year as a consequence of environmental laws providing a 20-year, guaranteed feed-in tariff of around $280 per megawatt-hour,” he explains. “Emissions reduction and renewable energy generation is increasingly being mandated by governments seeking to meet their treaty commitments to lower carbon dioxide and other greenhouse gases.”

To Peters, it’s a question of whether Australia will take its lead in the development of cane farming and milling technology a step further by using the cane tops and trash as a large-scale biomass resource. “The Burdekin is uniquely positioned to supply 750,000 equivalent dry tons of tops and trash to a potential biomass project,” he says. “This approach delivers additional value for the grower and processor. Sugarcane is a world-class biochemical platform that can just get better and better when the whole plant is utilized.”

Australia’s Forest Resource
In the southwestern region of the country in Fremantle, Plantation Energy Australia operates a wood pellet manufacturing company that uses a feedstock of noncommercial timber and harvest residues from sustainably managed timber plantations. The plant has two production trains that can produce 125,000 MT of pellets a year. It’s currently operating at 50 percent capacity. However, production is expected to ramp up over the next 12 months to meet a growing demand.

“The primary object of the project is to have a sustainable business that supports local jobs, creates certified renewable energy in a solid form that can be transported to regional markets and creates value for the shareholders of the business,” says Richard Allen, PEA managing director. “The business supports around 50 jobs, both directly and indirectly and, in a regional context, that is a significant contribution to the local economy.”

The company currently exports its wood pellets to Belgium, but according to Allen, Japan and Korea are potential future markets because of their proximity. As he explains, there are two large forest plantation areas in Australia, which include the southern area in the west and the “Green Triangle” located between Victoria and southern and southeastern Australia. Radiata pine is grown and used for structural timbers. Eucalyptus globulus was originally planted for pulp wood, but is also used by PEA for wood pellets. “As paper demand has fallen, the use of these plantations for energy has become more important and new demand out of Korea and Japan will drive the expansion of the plantation estate going forward,” Allen says.

Like Peters, Allen expects opportunities for biofuel pellets within Australia to remain limited. “Australia is a large coal-fired power generator, but there is no cofiring in the country, primarily due to political pressure from the Greens, who are afraid the fuel will be derived from old growth forests, and from the unions, who are looking to protect the jobs of coal miners,” he says. “The domestic heating market is also small, with limited uptake of heaters in the southern states where winter temperatures require home heating and office heating.”

Expanding Internationally
Altus Renewables, based in Loganholme, Queensland, specializes in the production and marketing of biomass-based fuels to generate renewable energy. Its fiber processing facility in Tuan can produce 125,000 MT of wood pellets annually. The pellets are exported to markets in the United Kingdom, Denmark, Korea and Japan for heating and cofiring in electrical generating plants.

Ian Sandeman, who’s been managing director and CEO of the company since 2007, says, “Australia has a long way to go before we make any real progress in reach our bioenergy potential. As wood pellet producers, we are completely dependent on the international markets, as there are no domestic bioenergy markets for our pellets.”

Altus Renewables is planning a project for the Mount Gambier region in southern Australia, a 500,000-metric-ton-per-year plant that will export wood pellets from the Port of Portland in Victoria to serve European and Asian markets. “We have recently completed our preliminary feasibility studies, and will look to get the formal feasibility study underway in the next couple of months,” Sandeman says. “If all things go according to plan. a final investment decision could be made by the end of the year. Once the formal feasibility study is completed and, assuming a positive result, the plant will take approximately 24 to 30 months to be constructed.”

Whether the proposed Mount Gambier plant will receive any government support remains to be seen. “South Australia had a change of government two weeks ago, but we assume that the incoming government will be as supportive of the project as the outgoing one,” Sandeman noted in early April. “At this stage, we are trying to determine whether the new government will be willing to provide any assistance to the project.”

Which Future?
The QUT bioenergy paper stresses that Australia is well-positioned to benefit from the growth of biobased fuel and chemical sector because of large amounts of biomass available in the country. It cites a recent study showing that the total annual amount of biomass potentially available from all feedstocks in Australia is 78 million tons, which is forecast to increase to nearly 100 million MT in 2030 and 114 million MT, in 2050.

“Given the investment and policy momentum in other countries, biofuels and biproduct industries will develop in Australia only with the creation of an enabling environment,” the paper says. To get there, QUT recommends a five-point plan—a plan that quickly gained the support of Bioenergy Australia. The university’s recommendations are to:

• Develop a national biofuels, bio-based products and bioeconomy strategy.

• Implement a national biofuels mandate supporting the introduction of higher quality fuels.

• Provide supporting mechanisms—education, incentives and infrastructure.

• Establish policy frameworks to grow new industries—advanced and drop-in biofuels, biochemicals and biobased products

• Support commercial developments through industry and research collaboration.

“The development of a vibrant bioeconomy in Australia offers a significant economic growth opportunity that will assist to diversify Australia’s economy and create regional and rural jobs. It is critical that Australia act now to capture this opportunity,” the QUT paper concludes.
In short, it’s a question of whether Australia will mostly continue to use the country’s bioenergy potential to serve international markets or capitalize on the environmental and economic benefits of its homegrown biomass products.

Author: Patrick C. Miller
Staff Writer, Biomass Magazine