MINGENEW farmer James Yewers says biofuels will remain an integral part of the grain industry’s future in WA and can help combat the rising cost of petrol, which reached $1.50/L a week ago.
Interest and activity in the biofuels industry appears to have stalled over the past 18 months because of the record hike in global grain prices.
Escalating grain values have also forced the production costs of biofuels to steeply rise.
The dramatic increases have raised suggestions it may no longer be economically viable to produce biofuels using ethanol extracted from locally produced grains such as canola.
But Mr Yewers said he believed the Australian biofuel industry had not been hampered, especially in places considered to have long term viability for ethanol production.
Two years ago, the biofuel industry was crunching its numbers pricing oil at $80 a barrel, saying it would then be price competitive.
But the estimates were done when grain was priced at less than $200/t.
With the cost of oil now at about $120 a barrel and grain more than $300/t, the costs of biofuel production have skyrocketed.
However, Mr Yewers said it can still be made by using waste cellulose, such as crop stubbles, but while this may be a more cost effective method, it is still a few years away from implementation. minishing reserves and developing economies.
He said governments were conscious of this and were encouraging the development of alternative energy sources.
“Ethanol will be an integral part of the alternative renewable energies,” he said.
At the conference, NSW Premier Morris Iemma announced his government was planning to ensure all ULP sold in NSW contained 10pc ethanol by 2010.
“We would expect such announcements to follow in WA to ensure infrastructure and production is in place to encourage a smooth transition from ULP to E10,” Mr Yewers said.
“We may only have three or four years of fuel security left in Australia and we are not far off paying $2 a litre for the cost of petrol.
“We need alternative fuels to come on line quicker because we need a stop-gap.”