Queensland greenlights advanced drop-in biofuels project for military, aviation, marine

In Queensland, the state premier Anna Palaszczuk, the Minister for State Development Anthony Lynham, and the Minister for Energy, Biofuels and Water Supply Mark Bailey jointly announced that a AUD $16 million advanced biofuels pilot plant will be built at Southern Oil Refining’s Yarwun plant at Gladstone. They described the project as “a giant step towards securing a large-scale biofuels industry in Queensland.”

If successful, the pilot plant will be expanded to a large commercial-scale refinery costing $150 million and producing 200 million litres of advanced biofuel annually, suitable for military, marine and aviation use.

The leaders’ perspective

The Premier said it would be Australia’s first commercial-scale advanced biofuels production facility. “I’m all about new industries because they will deliver new jobs and more prosperity, especially in regional Queensland,” she said. A fully-fledged biofuels industry has the potential to play a key role in our economic future, and this pilot plant is a giant step towards achieving that goal. This pilot plant is essentially the launch site for a Queensland biofuels industry. If we can develop this plant into a large-scale refinery, that’ll mean jobs here in Gladstone, but it could also kick off a new wave of investment and job creation across Queensland.

“And with the Government’s help, we have managed to get this investment out of New South Wales and into Queensland – something I’m keen to see more of.”

Dr Lynham said the biofuels industry could form part of a broader biotechnology sector that holds enormous potential for Queensland, both in terms of diversifying our economy, and providing jobs.

“Together with the Biofutures Roadmap and 10-year action plan that will be completed by mid-year, this project will help position Queensland as a leader in the biofuels industry,” Dr Lynham said.

“This announcement, along with the three per cent biofuel mandate that applies from next January, illustrates how biofuels are going to figure more prominently in the fuel supply chains of the future,” Minister Bailey said. “It also emphasises the importance to Queensland of this biofuels pilot plant project and plans for a subsequent full-scale commercial plant.”

Project specifics

The pilot plant will be co-located with the Yarwun re-refining facility. The plant will use biomass material such as sugarcane bagasse and possibly prickly acacia as feedstock for the production of bio crude oil, which will then be distilled into saleable kerosene and diesel products.

It is expected to be operational by later this year and within the next three years aims to have produced one million litres of fuel for use in field trials by the US navy as part of its Great Green Fleet initiative, and also by the Australian Navy.

Is it Licella?

The source of the technology was not explicitly revealed by Southern Oil Refining or the Queensland state government. However, Licella, which has its Cat-HTR technology can process any form of ligno-cellulosic biomass feedstock into bio-crude oil, to produce next generation bio-fuels and renewable bio-chemicals, and has been tested with bagasse. Licella has been working with Southern Oil for about 18 months now, on a range of initiatives, and could well be the technology partner.

As close to a confirmation as we’ve yet received — the Queensland government has confirmed that it’s a hydrothermal liquefaction technology that’s being employed in the project — and CAT-HTR is one, too.

Licella’s Cat-HTR process has a Large Pilot Plant, located at Somersby, an hour north of Sydney. The final scale up to a commercial-scale module is only a x 2.2 scale up of the existing Large Pilot Plant reactors.

More about Licella’s progress here.

A buzz of activity in Australia

Earlier this month, Air New Zealand and Virgin Australia announced they had formed a partnership to investigate options for locally-produced aviation biofuel. And we highlighted the Federal Government’s new commitment to Clean Energy last week in this report.

Queenaland on the move

Last month, the Queensland premier announced development of a Biofutures Industry Development Fund that is meant to help first-movers in biofuels and the bioeconomy bridge the early stage funding gap in order to get to implementation. The funding facility will help cover the costs of due diligence processes so that investment-ready projects can access capital. She pointed to relationships such as that with the US Navy for biofuels and with Asahi brewery who has partnered with local researchers as demonstration of the potential in the region for biofuels and the bioeconomy.

In December, Queensland’s parliament has passed a bill mandating 3% ethanol blending and 0.5% biodiesel blending from Jan. 1, 2017. The start date is six months later than originally planned to give the oil industry time to adapt to the blending requirements. Ethanol blending will then rise to 4% in 2018, according to the bill. The sorghum-based ethanol plant in Dalby is currently running at 50% production capacity but hopes to be able to ramp back up when the mandate comes into effect.

And the state government has made explicit its interest in producing fuels for US Navy re-fueling and for th Australian Defense forces. Last June, Premier Palaszczuk made a visit to Washington DC and met with Navy top brass on biofuels.

And last August, we reported that a researcher from Queensland University of Technology is working to develop technology to turn sugarcane bagasse into aviation and other fuels under a $4.5 million grant from the Federal Government. The target market is the US Navy who is seeking biofuel filling stations in Australia to supply its green fleet. Already Queenland ports are used in training exercises for the US Navy and would be a logical region to produce the fuels for helicopters, planes and vessels. Sorghum is another potential feedstock for fuels to supply the US Navy.

More about Southern Oil Refining

Southern Oil Refining currently operates a waste lube oil re-refining plant at Yarwun in the Gladstone State Development Area as a joint venture with JJ Richards & Sons. The $70 million plant is the only waste lube oil re-refining facility in Queensland, and has the potential to process all of the State’s 100 million litres annually of waste lube oil. The company also operates a re-refinery in Wagga Wagga, New South Wales.

The decision to site in Queensland

Southern Oil Refining Managing Director Tim Rose said he was delighted to announce his company’s decision to locate the biofuel pilot plant in Gladstone.

“For the past few months, we have been assessing whether to site this important piece of technology at our Wagga Wagga plant in New South Wales or at our new re-refinery in Gladstone,” Mr Rose said. “Our decision was made easier with the announcement of the Queensland Government’s Bio Futures Roadmap which is the only forward-thinking policy in Australia in this critical area. “This demonstration plant will be a big step towards creating a clean transportation future.”

Mr Rose said his company had been working with the Australian Defence Force for some time to develop green fuel technology that satisfied the requirements of the US and Royal Australian navies and the Great Green Fleet vision. “The results of our preliminary investigations have been very encouraging and we’re now ready to move to this one million litres a year pilot plant,” Rose said. “Once our biofuel is accepted by both navies, it will open the door to a commercial-scale refinery capable of meeting the ADF’s needs and provide green fuel opportunities for aviation and other heavy transport industries – and Queensland will be a world leader in this space.”