Alternative fuels: investing in the future

Peak oil and the need to reduce greenhouse gas emissions mean that Australia will have no choice but to rely on alternative fuels in the future. Research suggests there are a number of alternatives that can bridge the gap, but a substantial investment in infrastructure is required before they are commercially available.

Research into alternative fuels has stepped up over the past 5-10 years and most experts agree that the technology that will drive these fuels is ready and waiting to be commercialised.

In reality, transport is still heavily reliant on oil-based petrol and diesel fuels, with much investment in infrastructure and the supply chain needed before consumers will see real alternatives at the fuel pump.

The two main drivers that will shape the mix of fuel seen around the world over the next several decades are climate change and peak oil, according to the CEO at the Biofuels Association of Australia, Bruce Harrison. “We will need lower carbon fuels in the future to reduce our greenhouse gas emissions and will need a greater range of fuel options to replace declining fossil fuels,” he says.

A recent report by the CSIRO Future Fuels Forum found that the transport sector ranks third (behind stationary energy and agriculture) when it comes to greenhouse gas emissions and is currently responsible for 14% of Australia’s total emissions.

This is fuelled by the 19,000 million litres in petrol and 18,500 million litres in diesel sold in Australia each year. While prices have been steadily increasing, oil remains available on the international market for now and alternative fuels have not been readily available or competitively priced.

Experts can’t agree when peak oil will occur, how quickly supplies will diminish and what share of diminishing global oil supplies Australia will have access to. But there is agreement that securing access to affordable and sustainable fuel is the only way to ensure the security of our economy and way of life in the future.

Challenge versus opportunity

The challenge of a fossil fuel supply that is quickly running out has spurred scientists to investigate a number of options to replace our reliance on these limited resources.

The CEO at Environment Business Australia, Fiona Wain, believes Australia is in the perfect position to capitalise on the world’s impending need for alternative fuels. “As an energy-intensive country, Australia can remain prosperous by becoming energy efficient and also developing new fuel technologies. We can scale up this technology and expertise and really transfer it to other countries in the region such as China and India,” she says.

The Future Fuels Forum report also predicts that using a more diverse mix of transport fuels and engine technologies in Australia will lead to the development of new industries and foster ‘green collar’ job creation.

Philip Dalidakis, CEO at the Victorian Association of Forest Industries, agrees that we need to adapt. “The demise of one industry is often the beginning of another,” he says. “This has happened throughout history and is not something to be scared of, but is to be embraced by the new industry.”

He is calling on the government to change current legislation that does not allow wood waste - a renewable energy source - to be converted into bio energy. “Wood waste that is currently created in the commercial manufacture of wood products such as sawdust and residual woodchips can be used to provide base load power,” he says.

The wood waste that is currently generated by Australia’s timber industry could be converted into enough energy to power the ACT by renewable energy every year - the equivalent of 400,000 homes.

Weighing up the alternatives

Harrison believes the types of alternative fuels we use will change over time as our infrastructure catches up with the technology being developed. “The alternative fuels that make the most sense for the next 10-15 years are fuels we can use in existing vehicles and within the existing fuel distribution infrastructure - this means we need some sort of liquid fuel,” he says.

“We’re really looking at biofuels, as ethanol can mix with petrol, be used in the current fleet of cars and be distributed via existing petrol stations. Biodiesel is a similar story, with the majority of commercial sector vehicles compatible with this type of fuel.”

Research into this alternative fuel is ongoing, as it’s feared that biofuels could compete for valuable feed stock in the future when production is scaled up out of necessity. Harrison says a pilot plant has had success in growing algae to produce biodiesel and mustard seeds that aren’t used for the food market are also being investigated as a good biofuel crop.

“The mustard seeds are a good break crop that grows in arid conditions. Farmers need to rotate their crops to avoid diseases and rest particular areas between crops to ensure nutrients aren’t depleted. The mustard seeds can be grown in areas that wouldn’t otherwise be used and put nutrients back into the soil to add value to future crops. This adds value for farmers and gives us a new feedstock no one else is using to produce biofuel.”

Looking further ahead, the Future Fuels Forum predicts varying degrees of electrification in road vehicles, ranging from mild through to plug-in and fully electric. “Mild hybrids might include, for example, an advanced start/stop facility for city traffic conditions involving a more powerful starting motor but would rely solely on an internal combustion engine at all times for driving.

“Deeper levels of electrical hybridisation would involve different ways of integrating an electric motor for increasing amounts of driving time using the efficient electric engine. Plug-in hybrids would allow some of the production of electricity to come from the main grid rather than the internal combustion engine.”

Infrastructure and investment

The alternative fuels industry appears united in its call for government investment into developing the technology - especially in building the infrastructure required to make these technologies a commercial reality.

“When you look to the early days of electricity, you’ll find that nowhere in the world did a major electricity supply ever get set up without government intervention,” says Wain. “There’s a certain amount of risk involved in the early days of implementation and governments need to step up to the plate with a combination of regulations, fiscal framework, government procurement, investment and industry standards.

“If that framework is put in place, then it allows business to do what it does well - be creative and commercially deploy innovation. We know we have the technology available that can take us the next five to ten years of steps, but it is no good unless it is deployed wisely,” she says.

Harrison agrees that government investment and incentives are needed for viable alternative fuel infrastructures to be developed in time to meet the decline in fossil fuels and emission targets.

“Infrastructure support from the government is essential - these companies are trying to break into an industry that the fossil fuel guys have had in place for 50 years,” he says. “The biofuels industry is producing fuels from biomass and this involves setting up completely new supply chains.

“The reality is that the market looks at demand and supply and only when there’s not enough oil to go around will people look at what else is around - but by then it’s too late. We need to have these alternatives developed before we get to that point, so there’s a strategic reason for government to get involved early and support the development of a range of options for Australia,” Harrison concludes.