Sustainability in Business

Powering up on biofuels

Biofuels, a renewable source of energy from waste, have been around for two centuries, but an environmentally conscious shift from the transport sector is driving a resurgence.

Using vegetable oils, animal fats and ethanol from crops were some of humanity’s first liquid fuels in the 19th century. Known as biofuels, they were used during the early stages of the industrial revolution to power the first lamps and combustion engines, according to the book – Biofuels Crops: Production, Physiology and Genetics. 

But the shift towards kerosene and gasoline as primary fuel sources took place in the 1860s and in the early 20th century for automotive fuels. 

Biofuels have been intermittently used since then, but according to the report, global concerns about climate change, biodiversity and sustainability saw their use in internal combustion engines. 

Fast forward to 2019, and biofuels have been identified as offering a significant opportunity for lowering global emissions in the commercial road transport aviation and marine sectors.

According to the Bioenergy state of the nation report, increased use of 10 per cent ethanol-blended petrol could attract $1.56 billion in investment and additional revenue. Boosting the use of biofuels by only 10 per cent in petrol and diesel in Australia can reduce total greenhouse gas emissions by 8.9 million tonnes of CO2 equivalent per year.

From energy security, greater use of waste streams, emissions reduction and economic benefits, the benefits of biofuels are multifaceted. Domestic production of biofuels also reduces a reliance on imported oil and petroleum products and allows them to be used in the transport sector.

Biofuels come from a range of sources, including oil-based residues such as cooking and waste crop oils, as well as more typical organic waste and agricultural and forest residues.

According to the report, in 2017, biofuels made up three per cent of the transport fuel demand worldwide, with 47 per cent from the US and 23 per cent from Brazil. 

In the aviation sector, Qantas and Jetstar in 2012 operated Australia’s first biofuel trial flights derived from cooking oil split with 50:50 conventional jet fuel. The world’s first dedicated biofuel flight between Los Angeles and Melbourne departed in January this year.

One company leading the biofuels charge is Swedish manufacturer Scania, which believes that companies not keeping pace with emissions reduction targets will create a significant consumer backlash and threaten products and services. 

Although the same growth of biofuels has not been experienced in Australia, production is expected to ramp up due to mandates for ethanol-blended petrol in NSW and Queensland.

Speaking at an event in Melbourne in March 2019, Global CEO and Director Henrik Henriksson said that Scania’s clear purpose as a company is to transition to more sustainable transport solutions. 

“We believe that climate change, where the CO2 emissions coming from heavy transport represents close to 20 per cent of the global CO2 emissions, we are part of the problem but we want to be part of the solution,” Henrik said.  

“We need to drive this change, we cannot just sit and wait for it to happen, which means that we need to engage with our customers, our customers’ customers, fuel suppliers, energy suppliers, policy makers, politicians, global organisations and NGOs to be able to drive this change.”

Scania sees significant potential to test electrification and hybridisation using biofuels, including new powertrains running on the fuel. Henrik noted that given biofuels are available now, they can help provide a solution to tackling Paris climate change targets in the lead up to electrification. 

Henrik spoke of the potential of using natural and agricultural resources and waste to use renewables to create biofuels on a larger scale. 

“I truly believe myself that as a leader of a big international company, if you do not make this transformation and turn your company into a sustainable one, you will simply not survive. 

“Because soon no-one will buy our products or services, no one will invest money in your company and no-one will like to work for you. So this is a matter of survival for the company as well.”

In a large country such as Australia, Henrik predicted that electrification may take longer, while noting Scania cannot sit back and wait for biofuels to emerge as a silver bullet, but rather will have to drive their commercialisation. 

Henrik said that this could be propelled by wastewater creating biogas, sugar cane production to create bioethanol or through the growth of agriculture products creating biodiesel, potentially reducing CO2 by up to 95 per cent. 

He said that electrification will eventually have total cost of ownership parity with diesel, with an eventual tax on biofuels. 

Policy levers to support the development of the bioenergy sector include explicit targets on the use of bioenergy, such as the E10 biofuel mandate in Queensland and NSW. Government grants have also been introduced to reduce project capital costs and contracts which guarantee a price for electricity generated over a defined time period.

According to Associate Professor Victoria Haritos, Deputy Head of Chemical Engineering at Monash University, undoubtedly the oil price crash after the Global Financial Crisis and 2014 onwards stunted biofuels momentum. She says that competitive fuel went cheaper, but biofuels didn’t change.

“It killed the incentive for investment and that was a lot to do with holding back initiatives,” Victoria says.

“Two things are quite important. The competitive price of fossil fuels and the absence of a carbon price that dilutes the incentive to go to low CO2 fuel and feedstock costs. If the feedstock cost is too high, even when you make fuel, it can be more expensive than fossil.”

She sees the Gladstone biofuels project as a great move for direct investment in refinery capacity for lower grade feedstock. Some energy security could be achieved as well, she adds.

“From a biofuels point of view, what we do entirely at the moment is import finished fuel for transport via Singapore as most people know with a 17-day barrier or a small amount. For some that’s a very threatening problem. In shipping or piracy on the high seas, we could be in a vulnerable position,” she says.

Victoria says that biofuels should be rolled out in a measured and controlled way, with no unintended consequences such as wholesale clearing of land leading to higher greenhouse gas emissions. A lifecycle analysis would further inform their potential, she says. 

According to Mikael Jansson, Scania Australia Managing Director, biofuels could help Australia replenish critical levels of national fuel stocks, but it’s important a business case is there for Scania’s customers.

“The fuel needs to tick some boxes for us. One is that it really reduces the CO2 from wheel to wheel. The other box we need to tick is whether there is enough volume in the country,” Mikael says. 

“When it comes to fuel supplies, of course partnership with the right supplier is key. We already have signed many memorandums of understanding with different companies with buying biodiesel, ethanol and compressed natural gas.”

Mikael says that more government support and incentives are required on making supply available at the right cost and Scania is working on lobbying them for this.

“I’ve seen a change since I came here [to Australia] and there’s much more discussions going on and support in regard to sustainability and the solutions around that. But still we are far behind Europe.

“When it comes to Europe, the government supported this in a much better way and that made it possible to move in this direction much quicker because we can’t do this by ourselves. We need help from the government.”

In February, Southern Oil announced an Australian-trial was underway using 100 per cent renewable diesel from old vehicle tyres, agricultural and forestry waste, biosolids and plastics to fuel a Scania test engine.

With support from the Palaszczuk Government’s Advance Queensland Industry Attraction Fund, Southern Oil will pioneer the refining of renewable diesel fuel from the materials.

The high-end Scania V8 test engine is being used in its power generation configuration for the testing – allowing assessment of exhaust emissions, performance and response, fuel efficiency, cost and engine lifetime.

Australia’s first biofuels pilot plant was launched in Gladstone in mid 2017. 

The $18 million Northern Oil Advanced Biofuels Pilot Plant is a joint venture between Southern Oil and J.J. Richards & Sons, on the site of their Northern Oil Refinery, and brings together five technologies from around the world to produce biocrude and renewable fuels from waste. Other waste streams to be tested include plastics, wood waste, prickly acacia, sugar cane trash and bagasse, urban and a variety of agricultural green waste including macadamia shells.

Anthony King, Scania Sustainable Solutions Manager at Scania Australia, says that specifying the fuel once all the testing is done will be central to ensuring it aligns with the depth of its engines. 

“We’ve had many discussions in the biofutures department in that case looking at predominantly ethanol. We are working with those solutions on the ground,” he says.

In the refuse segment, Anthony says landfill gas could also be used to power the Scania 280-horsepower Euro 6 engine. He says it gives the customer more benefits compared to electric vehicles. In the meantime, biofuel hybrids could provide a crucial gap as electrification takes decades to take off due to current limitations around battery range.  

“You have to take into consideration that a hybrid is also important for us and we are positioned for that segment as well,” he says. 

“We have the technology available. We have the product available, and we’re seeing a greater degree of interest from those market sectors, but we’re not at a mature stage yet where it becomes the default choice.”

Related stories:

Previous ArticleNext Article