THE CURRENT PICTURE
As with the rest of the world, Australia is not immune to the international developments of the oil price crash combined with the unprecedented impact of COVID-19. The full ramifications of the confluence of these two developments on the Australian biofuel industry remain unclear at this point.
The confluence comes at an interesting time for the Australian biofuel sector and policy makers. Outcomes are uncertain for the Australian industry having regard to, for example:
- the impact of low oil prices on the economics of ethanol blending and biodiesel production
- ethanol being directed to the higher value sanitiser market (while this may be short lived)
- the development of Australia's Bioenergy road map
- the impact of lower fuel consumption on emissions in Australia
- the impact on biofuel trade with international markets
- the potential mismatch between oil prices and biofuel feedstock prices
- post-COVID 19 challenges facing the future industry.
2020 BIOENERGY ROADMAP - A RARE OPPORTUNITY FOR AUSTRALIAN BIOFUELS
Despite the continual revisions of (Federal and State) Government incentives, the Australian biofuel industry has shrunk and languished over the past ten years. For example, in 2013 biofuel consumption amounted to about 6,800 barrels per day (bpd) or 0.6% of Australia's then liquid and gaseous transport fuel mix. In 2019 Australia consumed 4,500 bpd or 0.4% of Australia's transport fuel mix. This development negates those arguments for fostering a sustainable biofuel industry!
The 2020 ARENA Bioenergy Roadmap initiative provides a rare opportunity for a complete policy overhaul and an expose of the little understood economic and competitive realities the Australian industry has to face to survive and grow. The Australian industry has more potential than currently realised. ARENA is conducting 'workshops' in May (registrations close 11th May 2020) and is calling for public submissions (by 29th May 2020) on how Australia can build its bioenergy sector and strengthen the country's energy security. Click here for further details from ARENA.
HOW APAC CAN ASSIST
APAC Biofuel Consultants has been closely tracking, researching and advising the Australian (and international) biofuel sector since 2006. In addition to its advisory services to the Australian and international energy markets, APAC's annual report 'AUSTRALIAN BIOFUELS' have kept clients up to date on the economic, market, policy and investment plays in the biofuel sector.