WESTERN Australian company Australian Renewable Fuels will establish Australia’s first large-scale commercial biodiesel operation in South Australia after securing a bus contract with Transport SA.
The 100 per cent-owned subsidiary of the listed Amadeus Energy had been hoping to establish its first 40 million-litre-per-year biodiesel plant in Picton, south of Perth, but says WA Government delays have prevented this.
Australian Renewable Fuels managing director Darryl Butcher said the company had been talking with the Government for over two years, but had not progressed as much as it had with the South Australian Government after just four months.
In April of this year, Australian Renewable Fuels was granted preferred tenderer status with the WA Government to supply biodiesel for a bus trial.
However, Mr Butcher said that at the first post-selection meeting the company was told by the Public Transport Authority that the trial would cost $600,000 and the Government would only go ahead with it if Australian Renewable Fuels put up half of this amount.
Mr Butcher said facilitation from the Department of Premier and Cabinet had been much appreciated, however, the company nonetheless remained frustrated and disillusioned with the outcome of the tender process so far.
“We’re a commercial operator,” he said.
Access to buses and a potential major beneficial contract were holding up the Picton plant, Mr Butcher said.
“The Australian Greenhouse Office says the fuel is OK, and the bus manufacturers – Mercedes/Daimler Chrysler – say it is OK,” he said.
“Perth’s buses are using 25 million litres of diesel each year.”
The level of facilitation offered by a system within the SA Government, which allowed an economic development senior manager to cut across departments to facilitate a biodiesel project, was a stark contrast Mr Butcher said.
In addition to securing the SA bus contract, Australian Renewable Fuels has also conducted a trial with rubbish collection trucks in Onkaparinga, SA.
Australian Renewable Fuels has raised a collective $6 million from the WA Local Government superannuation fund, the Adelaide-based Local Super SANT Fund and Amadeus Energy and is in the final stages of due diligence with the ANZ bank for $6 million of debt funding to support up to five Australian biodiesel projects.
Mr Butcher could not say when the debt funding could be secured by and the first plant ordered from Europe.
“This is a new industry and there are still a lot of “t”s to cross and “i”s to dot,” he said.
However, Mr Butcher said Australian Renewable Fuels had achieved a range of off-take agreements – mostly for heavy vehicles – and hoped to have its first plant in Port Adelaide by mid-2004.
He said the ethanol debate produced a negative perception of biodiesel.
“It’s deemed guilty by association,” Mr Butcher said.
“But it’s quite a different product.
“It’s well-proven, can go into existing engines, and can be blended in any ratio.”
The Public Transport Authority was unable to provide comment before WA Business News went to press.
Biodiesel is a liquid fuel derived from animal and vegetable fats.
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