Australia’s major political parties announce new biofuels investment plans as national election nears

In Australia, both major political parties announced investment policies for biofuels as the country nears a November 24 election date.

The ruling Coalition government proposed a $16 million program to support cellulosic ethanol research and promote biofuels education. The plan ran into opposition from the Australian Lot Feeders’ Association over the use of food crops for biofuels feedstocks.

Labor Party leader Kevin Rudd pledged $15 million toward second-generation biofuel plants, with a goal of making next-generation ethanol commercially viable by 2017.

In Australia, investment and advisory firm Babcock & Brown has offered to take Babcock & Brown Environmental Investments private, after the biofuels producer cancelled plans for development of a plant near Darwin and was forced to consider selling its stake in Natural Fuel Australia at a substantial loss. The company’s shares had dropped from a high of $3.45 in May 2006 to $0.38, but recovered to $0.47 on the announcement. Babcock & Brown owns 70 percent of BEI and floated the remaining 30 percent in a public offering in 1998.

Last week, the last biodiesel plants in operation in Australia closed down due to excessive feedstock costs and low biodiesel prices. The closures follows project halts on Australian ethanol plants. Agri Energy’s CEO said the cancellations resultted from “continued uncertainty over investor, government and community support for alternative transport fuels in Australia.”

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