Biodiesel has been produced commercially in Europe since 1992, and European countries account for more than 80% of global biodiesel consumption. Since 2006, biodiesel capacity has more than doubled and in 2013, EU countries produced 10,367,000 tonnes of biodiesel.

Biodiesel markets are experiencing double digit growth in the United States and Asia, in particular India and China, where the government target is 15% replacement of petrodiesel by 2020. However, the biodiesel industry around the world since 2007 has been under pressure from higher priced feedstocks.

In Australia, total diesel usage in the year 2013-2014 was over 23,000 megalitres. We imported over 260 million litres of biodiesel to meet our consumption of 400 million litres in 2013. In 2013-14 financial year, it was reported that Australia’s biodiesel consumption had increased to record levels, comprising the majority of a 19 per cent increase in total biofuels consumption – proving that diesel fuel users are choosing the environmentally responsible alternative for their vehicle.

An increasing number of commercial organisations (mining companies and transport companies) are trialing B20 to B100 blends because of the significant greenhouse reduction benefits. Biodiesel blends – usually B5 or B20 – are available at an increasing number of service stations in all states. In Australia, the main feedstocks are tallow, used cooking oil and oilseeds. The CSIRO has estimated that converting all used cooking oil, tallow exports and oilseed exports to biodiesel could potentially replace 4–8% of petrodiesel consumption. 

The biodiesel industry in Australia already has the capacity to produce nine times the amount of biodiesel consumed in 2007. And this could increase even further – 10–40% – with the ‘2nd generation’ technologies, such as those based on waste and algae, that are under development. Other new feedstocks under development include Indian mustard seeds (Western Australia), Pongamia pinnata trees (Queensland, Western Australia), Moring oleifera (Western Australia) and algae (Queensland, South Australia, Victoria).

One feedstock with huge potential for use in biodiesel creation is algae. Interestingly, algae is also a source of fossil fuels – fossilized algae from millions of years ago has settled on sea floors to become oil which is now used to power vehicles. But living algae can be used as a sustainable fuel source and has significant potential for a high yield per hectare of land.  Algae can potentially yield 100,000 litres of oil per hectare each year – a huge difference to the next best crop, palm oil, which can produce around 5,000 litres per hectare. In addition, algae can be grown in low quality land – even deserts! – and only non potable water is needed. The South Australian Research and Development Institute is investigating sustainable production of biodiesel from microalgae, including the construction of a demonstration-scale bioreactor. 
While this is a promising technology though, it does require a lot of land. For example, five hectares of land would be needed for a plant treating just four million litres of wastewater each day. So, while such projects develop, the challenge is to establish a local Australian first generation industry – an industry with the production, transport, storage and dispensing infrastructure needed to be ready to adopt the second generation technologies when they become viable. Alternative feedstocks are needed, as well as additional infrastructure and more consistent access to markets.
 With 98 per cent of the energy used in the transportation industry still derived from fossil fuels, and energy production and use including transport representing around 71% of global greenhouse gas emissions in 2010, it is crucial that we move towards truly renewable and sustainable fuel sources such as ethanol.

 The BAA will do its part in promoting a sustainable biodiesel industry in Australia.