Biofuels

Age
Saturday 7/6/2008 Page: 2

Biofuels need not eat into food stocks Australia can develop biofuels that use crop residues, writes Glenn Tong.

DURING World War II, legendary BHP chief executive Essington Lewis was put in charge of all Australia's munitions production to meet the unique challenges of the war effort. It is arguable that business needs to be mobilised today to help combat global warming while not adversely affecting world food supplies.

Recent media reports have highlighted the problem of rising food prices around the world, especially in developing countries. Just like fossil fuels, arable land is a finite resource and competition between growing crops for food and for fuel presents ethical questions.

Developing countries assert that rich countries, in their hurry to respond to global warming, are driving up food prices by encouraging the use of crops to produce biofuels rather than feed people. In the US, most of the rise in global corn production from 2004 to 2007 was used for biofuels production.

According to the World Bank's 2008 World Development Report, about a quarter of a tonne of corn- enough to feed a person for a year - is needed to produce 100 litres of ethanol, enough to fill the tank of an SUV once. UN Secretary-General Ban Ki-moon recently called for an investigation of biofuels as he fears that their proliferation will compromise world food stocks.

One of his officials went so far as to declare that biofuels were a "crime against humanity" The reality is that biofuels can be part of the response to the climate change challenge without reducing food production. And business can play a key role. The focus must be on second-generation biofuels that use crop residues like stalks and husks rather than the grain itself, leaving food stocks unaffected. But much more research is needed.

There are, of course, many advantages to biofuels. Transport fuels account for about 40% of Australia's energy use. All this is hydrocarbon based and most is imported, and subject to the uncertainty of international developments. Second generation biofuels produced locally, focusing on bioethanol sourced from cellulosic biomass like wheat straw and sugar cane bagasse could be a solution.

Globally, wheat straw is the most abundant cellulosic biomass derived from an agricultural crop. It just so happens that wheat straw is also the most abundant cellulosic biomass in Australia. The AgriEnergy has technologies that could make the use of wheat straw as a feedstock for bioethanol a reality. If ethanol can be produced from wheat straw cheaply and efficiently, it would be a plentiful and easy solution to our renewable energy challenges.

But a lot of investment over many years will be required to crystallise this opportunity. Demand for bioethanol will soon likely far exceed supply if the industry is confined to using only first-generation, starch based ethanol production. Business has had some involvement in this sector but it can play an even greater role.

The Queensland Government's recent $5 million investment in a sugar cane bioethanol research centre together with Syngenta and an Australian company, Farmacule, is a step in the right direction. The dream of having a viable and sustainable biofuels industry in Australia is not new. In the early 1980s Shell developed a pilot ethanol scheme in Far North Queensland. The difference is we now have the biotechnological tools to make it a reality.

Business, of course, is used to long lead times in investment. Manufacturing plants can take three to five years before they start production and many more years to achieve their maiden profit. The North West Shelf resources project had a lead time of a decade or more. The forerunner of Orica, ICI Australia, had a large research department at Ascot Vale and many new chemicals and industrial products that went on to benefit the community in several ways were developed there after long years of research.

The Rudd Government needs to encourage corporate Australia to further develop biofuels for the national good. This is already being done via substantial government financial assistance in the form of large subsidies for biofuels in the US and Europe. But support for the Australian biofuels sector is very meagre by comparison.

Like any other innovative technology, enormous start-up costs are associated with the development of biofuels. And, just as the Federal Government provides financial incentives and support to a range of other community and business areas, it is logical that greater incentives be provided to develop the all-important biofuels sector.

This low level of investment by the Australian Government, coupled with rising grain prices, has forced biofuel companies to shift their activities offshore. AgriEnergy has pulled out of its $100 million Swan Hill ethanol plant to focus on its overseas investments and Australian Renewable Fuels has halted production at its two plants. The rewards will be big for the companies that can find an economical way to produce second -generation biofuels. In Australia, a great opportunity presents itself in wheat straw as a potential feedstock.

Science has benefited humanity over thousands of years. biofuels, rather than being condemned, should be embraced for the potential they have to meet the unique challenges of climate change. For both the national and international good business needs to get behind the development of these second-generation biofuels.

Dr Glenn Tong is chief executive of the Molecular Plant Breeding CRC.