Biofuel Technology

The Hon. K.J. MAHER (15:24): My question is to the Minister for Science and Information Economy. Can the minister inform the chamber of any initiatives that are underway in South Australia to address potential problems with fuel shortages?

The Hon. G.E. GAGO (Minister for Employment, Higher Education and Skills, Minister for Science and Information Economy, Minister for the Status of Women, Minister for Business Services and Consumers) (15:25): I thank the honourable member for his most important question. As the honourable member has suggested, liquid fuel demand in Australia is forecast to grow strongly from the 51 gigalitres used in 2010 to about 67 gigalitres in 2030, with jet fuel consumption forecast to double in that period. The production of liquid fuels from algae and other sustainable sources is a potential alternative to fossil fuels. The challenge in the years ahead will be to reduce the costs of producing these biofuels so that they are commercially competitive with fossil fuels.

On Friday 31 October, our Minister for Regional Development (Hon. Geoff Brock) opened an algae biofuel demonstration plant for Whyalla for Muradel Pty Ltd. Muradel, a company dedicated to developing marine algae as a feedstock for commercial biofuels, originated from a joint research project undertaken between the University of Adelaide, Murdoch University in WA and SQC Pty Ltd. Muradel already enjoys a lead in the commercialisation of algae biofuels. At its plant in Western Australia, it achieved the best production rates in the world of oil from algae grown in open saline ponds. It has access to technology that dramatically reduces biofuel production costs.

Now, I am pleased to say, Muradel has established a demonstration plant in Whyalla, which is Australia's first integrated demonstration plant to sustainably convert algae into green crude. The Whyalla plant is a first step towards a 1,000 hectare commercial plant with the potential to produce 80 million litres of crude oil a year. The 1,000 hectare plant would create at least 100 new skilled and operational jobs in the Whyalla region. Whyalla is ideally suited to microalgae production and green manufacturing, offering a stable, sunny and warm climate, flat, readily available non-arable land, abundant seawater and established transport infrastructure.

BioSA—South Australia's bioscience business accelerator—has been involved in ongoing support of the project through three different grants. The initial grant of $50,000 was made to biofuels company, AusAgave, to look at the potential of the agave plant (as opposed to algae) as a biomass source for the production of green crude at the Muradel operation. AusAgave has been granted a further $100,000 by the South Australian government through BioSA (approved by the board in April 2014 and likely to be paid in February 2015) to partially fund the establishment of the first plantations of agave at the Muradel site.

This will upscale production and incorporate agave as a biomass source into the Muradel plant so that they have a viable second source of biomass after algae. This is likely to be needed during winter when the rate of algae growth slows. The final grant, which was provided in June 2014 direct to Muradel to the value of $150,000, will partially fund the analysis of the green crude produced by Muradel. This will include not only chemical analysis but also engine trials.

BioSA has provided business development expertise to this project, and former BioSA employee Dr Andrew Milligan is now working for the company in a business development role. It's noteworthy that Regional Development Australia, the Whyalla city council, the Australian Renewable Energy Agency and the University of Adelaide have also provided significant financial and in-kind support for this project. The Muradel project contains many of the elements that are critical to how we transform this state's economy: highly innovative, a renewable energy source and a great mix of public and private sector cooperation in regional SA. I look forward to watching the progress of these activities with great interest.