A Whac-a-Mole circular economy

The Australian Institute for Progress has described Transport Minister Catherine King’s proposed mandate of biofuels being blended into Australia’s fuel supplies as yet another example of Labor’s Whac-a-Mole circular economy.

Executive Director Graham Young said the move would do virtually nothing to reduce either emissions or fuel security and was only being touted because Australia was restricting cheap and reliable sources of energy.

"In Labor’s circular economy government policies are causing shortages of reliable cheap fuel, which are being “solved” by expensive, less reliable fuels, which when they fail require even more expensive less reliable fuels, or subsidies, to either fill the gap or make them “affordable”.

“Biofuels are produced from organic wastes or crops. When the crops are harvested this involves huge amounts of diesel and fertiliser, both produced from fossil fuels. They also require the addition of hydrogen, a fossil fuel product.

“All of these emit CO2 and using them to produce a substitute fuel rather than using them as the fuel themselves, does little to help fuel security.”

Mr Young said biofuels were wasteful and expensive because in some cases they required more energy to make than they produced.

“Energy return on energy invested (EROI) varies, but biofuels are well below that of oil and gas, and in some cases take more energy to produce than they actually deliver.

“Recent studies show EROIs of 1.797 for cane sugar ethanol, 1.040 for corn, and 0.739 for wood. Any EROI less than one means it costs more energy to produce than it delivers.

“By comparison the EROI for oil is somewhere between 10 and 20. Not only is biofuel not competitive, but it will tend to destroy national productivity compared to projects like Queensland’s Taroom Trough.”

Mr Young said that biofuel can only make a fringe contribution to overall fuel consumption.

“For instance the aviation industry is putting a lot of reliance on reducing its emissions through Sustainable Aviation Fuel (SAF) which can be derived from used cooking oil (UCO).

“To put this in perspective, our calculations show it would take the UCO output of all the fish and chip shops in Australia just to fuel one QANTAS Dreamliner from Sydney to London return per week.”

Mr Young said the requirement in terms of farming land was also huge.

“At a time when we are covering good farming land in solar panels and high-tension electricity networks, we would also need to either cut back on exports or domestic consumption of food, or create new farming land.

“Qantas has a target of having 10% of its fuel derived from SAFs. If that is to be met by grain, rather than UCOs it would require 1-3 thousand wheat farms – a total of 250,000 extra hectares, and equal to a fifth of Australia’s domestic consumption - just for Qantas.

“It is not just an issue of land and fuel inputs, but water as well, with fuel security being affected by cycles of drought and flood to add to the vagaries of sunlight and wind.

“We have an economy increasingly like a rat in a hamster wheel chasing its tail, and it will not end well, except for those who charge a fee to facilitate this increasingly rickety process.”

For further information contact Graham Young on 0411 104 801 or graham.young@aip.asn.au.