Second generation sparks regrowth

Exploration into second-generation technologies and feedstocks is gathering pace as rising feedstock prices significantly affect the viability of the biofuel industry.

The price of common feedstocks, including tallow and palm oil, has caused some producers to cease production of biodiesel because it has become commercially unviable.

The biofuels industry has also come under fire for inflating commodity prices and driving up the cost of some food crops, including corn and canola.

But emerging second-generation technologies, including the use of lignocellulose, or woody plant material, could provide a viable alternative.

Researchers in Western Australia have found that the oil mallee tree could be a highly viable and more energy efficient feedstock for biofuel production.

In parts of Asia, a number of WA companies are investigating the viability of the jatropha curcus as a more cost-effective biodiesel feedstock.

Mission Biofuels Ltd and Natural Fuel Ltd have thrown their support behind jatropha, with Mission incorporating an upstream feedstock subsidiary into its business.

Subiaco-based Curcas Energy has established a jatropha plantation in Thailand, and has plans to open its own mill and biodiesel production facility in that country.

Director of business development, Jack Keay, said the company has already planted 2.7 million trees this planting season, which began in April, and by mid-June would have 10 million trees.

The plantation is being established on a contract farming basis, allowing farmers to plant jatropha in areas not being used for food.

"Altogether when we finish in four years we would have covered less than 3 per cent of the area we're working in with jatropha," he said.

"We think that's appropriate, we don't want to replace food crops."

Curcas Energy has leased 10 hectares of land in Khon Kaen in north eastern Thailand to construct its mill/biodiesel refinery.

Mr Keay said construction of the mill was expected to start towards the end of next year, with the biodiesel plant to reach full scale production by 2011, producing 100,000 tonnes of biodiesel a year.

The company has raised almost $6 million through private capital. Negotiations with a potential cornerstone investor are expected to rake in a further $15 million.

Perth-based GEM Biofuels Plc, which is listed on London's Alternative Investment Market, has an extensive jatropha plantation in Madagascar, with a landholding of 452,000ha and access to an additional 40,000ha of naturally grown jatropha trees.

Last October, GEM signed a take-off agreement with Natural Fuel Ltd to supply crude jatropha oil to its Singapore biodiesel facility.

The possibility of using algae as a biodiesel feedstock is also being investigated, with local company APBE Pty Ltd looking to build the country's first demonstration pilot plant to mass produce oil derived from algae for use as biodiesel.

The technology, which is currently being demonstrated in the US, can be used to absorb emissions from industry and feed them into an algae photo bioreactor, an enclosed structure used to grow algae.