Australian Biodiesel Group

Opportunities for biodiesel

AOF Forum - 11 October 2006

Randal Jitts – General Manager ABF

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ü ABG is the nation’s largest producer, founded in 2001

ü Two Australian facilities with a capacity of 200 million litres pa.

ü Internally developed technology, offering feedstock flexibility.

ü Vertical integration strategy to secure feedstock supply

ü JV established in North America to develop production facilities.

About ABG Limited

Existing customer base• Independent fuel distributors & retailers• Trucking fleet operators• Local governments• Transport and marine operators

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Why Biodiesel ? – Peak Oil

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Global Markets … not a level playing field

ü Europe – High diesel prices, farmers subsidized for growing energy crops. Importing Canola to meet demand.

ü USA – Gov’t support for Biodiesel use, Soy being replaced by Corn for Ethanol production, changing traditional market forces.

ü Malaysia – Large producer of Palm Oil, building over 12 biodiesel plants currently, pushing up world Palm prices.

ü India – Rapid development of tree plantation based Biodiesel feedstock and biodiesel plants to meet domestic demand.

ü Australia – Limited Biodiesel production and viable feedstocks. Lack of Gov’t incentive for Biodiesel use by growers.

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Australian Biodiesel production ... an update

New expected: circa 650ml pa(Australia only)

Operational: circa 500ml paTOTALS

Barnawartha, VIC – 60ml paBiodiesel Producers

Rutherford, NSW – 12ml paBiodiesel Industries

Narangba, QLD – 45ml paEcotech

Deniliquin, NSW – 125ml paRiverina Biofuels

Geelong, VIC – 150 ml paPort Botany, NSW

Axiom Energy

Port Botany, NSW Darwin, NT – 147ml pa**(near completion)

Natural Fuel Australia

Brisbane feasibility – 45ml Largs Bay, SA – 45ml paPicton, WA – 45ml pa

Aust. Renewable Fuel

North America X 3 sitesNarangba, QLD - 160ml paBerkeley Vale, NSW – 40ml pa

ABG Limited

Construction or DevelopmentOperational CapacityCompany

Other producers/proposals: SA Farmers Fuel, Future Fuels, Evergreen, Biosel

700-800ml per annum of domestic production by 2009 or around 5% diesel market share. (Patersons Securities 2006).

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How is Biodiesel manufactured ?

TrygliceridesUsed

Cooking Oil Tallow

CanolaOil Methanol

CH2

CH

CH2

R'"COO

R"COO

R'COO

3 CH3OH

catalyst

CH2

CH

CH2

HO

HO

HO

+

R'''COOCH3

R'COOCH3

R''COOCH3

triglyceride methyl esters(biodiesel)

glycerol

Methyl Esters

Summer grade Biodiesel

Winter grade Biodiesel

Glycerin

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External pressures on the Biodiesel industry

Feed Qty* UCO

* Tallow* New oil

Feed Price* Weather

* Trade

Oil Price* Peak Oil* Oil wars

Offtake* End User* Oil Co.* Quality

Govt Policy* Tax

* Environment* Specs

BiodieselIndustry

80% of cost

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-4-5137191-5Cloud Point (°C)

$750$950$700$500$550$900$950Approximate Cost MT

33.143.098.393.582.696.597.7FAME (>96%w/w)

114121156165162150155Flash Point (>120 °C)

1352831.279Oxidation stab. (>6h)

Canola

CottonPK Olein

Coconut

UCOTallow

Palm oil

Feedstock considerationsfor Australia

Expensive Limited Qty Imported

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0

50

100

150

200

250

1961

1965

1969

1973

1977

1981

1985

1989

Chickpeas

Triticale

Canola

Soybean

Sunflower

Mushrooms

Lupins

Cotton

Value of ProductionA$ Million

New Crops Since 1960New Crops Since 1960

Australia can not wait for traditionalcrop development programs

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Key requirements for Australia's Future energy crops ?

ü Economic for Growers (realistic sell price and rotational benefits)

ü Economic for Processors (realistic buy price and sell price)

ü Sustainable land use (not competing with food chain)

ü High yield (over 50% oil in seed)

ü Maximum use of by-products (meal, biofumigation)

ü Suit dry land conditions (Drought, greater WUE)

ü Rapid expansion capability (dedicated GM regions)

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Challenges and Opportunitiesfor Biodiesel

ü Supportive Gov’t policy (level playing field for on/off road users)

ü Source of viable feedstock (Limited domestic soft oil supply)

ü Petrodiesel supply chain uptake (Efficient storage, blending, retail)

ü Consistent product quality (Biodiesel code)

ü Support from Engine manufacturers (B20 to B100)

ü Support from all associations (BAA, RFA, AOF, NFF, etc etc…)

ü Support for growers (Regional Sustainable Model)

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Biodiesel Plant

Biodiesel

Crush Mill Glycerin

Oil

Meal

Stock feed

Seed100%

Feed Mill

UCO Tallow

Short term

Medium term

Long term

Oil100%

Regional Sustainable Model

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Questions ?