Tony Conaghan

From tequila to trash – Biofuel production and regulation in Queensland

Tony Conaghan

8 February 2018

Legislation Updates

Developing a biofuel project in Queensland? The regulatory environment is changing up with a broad-ranging Queensland Government review of energy legislation due for imminent release.

Energy production in the Australian biofuel industry is currently undergoing rapid transformation, despite its relative infancy. The regulatory environment is accordingly under review to more effectively the expanding industry.

Federal government policies, legislation and regulation affecting biofuel production are in the early stages of development. The Finkel Report, released in June 2017, has recommended a Clean Energy Target (CET), and the Federal government is providing funding for renewable and bioenergy projects through the Australian Renewable Energy Agency (ARENA) and the Australian Bioenergy Fund.

However, a more committed approach seems to have been occurring in the States, where governments have been pushing ahead with support for the development of renewable energy projects.

Queensland’s 50% renewable energy target

Queensland began a concentrated shift towards renewable energy in 2016, commissioning an independent report into credible options for achieving 50 per cent renewable energy generation by 2030. In June 2017, many of the recommendations of this report were accepted by the Government.

Legislative change impacting biofuel production

In January 2017, Queensland enacted amendments to the Liquid Fuel Supply Act 1984 and the new Liquid Fuel Supply Regulation 2016, establishing the Biofuels Mandatewhich require the fuel industry to meet targets for the sale of biobased fuels – 3% of the total volume of regular unleaded petrol sales and ethanol blended fuel sales by liable retailers must now be biobased petrol (ethanol). In addition, Queensland’s new Planning Act 2016, with associated legislation and regulation, commenced on 3 July 2017. This new planning system places a renewed emphasis on sustainability, supporting the development of renewable energy production, including biofuel projects.

Queensland legislation currently under review 

In tandem with these changes, the Department of Energy and Water Supply is also undertaking a review of Queensland’s state-based energy legislation. Objects of the review are to create a regulatory framework that embraces new technologies and sets environmental expectations on participants in the energy industry. The review is focusing on these state laws:

  • Electricity Act 1994
  • Gas Supply Act 2003
  • Energy and Water Ombudsman Act 2006
  • Liquid Fuel and Supply Act 1984
  • Nuclear Facilities Prohibition Act 2007.

Finalisation of the review was due in December 2017 – we will keep you up to date with developments on this front.

Early impacts of the new regulatory environment

Commercial ventures into biofuels are increasing and being revitalised by the Biofuels Mandate and new planning system:

  • AgaveQueensland’s MSF Sugar is aiming to become a world industry leader, with plans to plant 4,000 hectares of agave plants on the Atherton Tablelands. Famously used to make tequila, the agave plantations will instead form part of the milling company’s $60 million biomass refinery project, operating alongside a green energy power station and a distillery at its Walkamin sugar mill.
  • Sorghum – Dalby’s biorefinery, Australia’s first grain-to-ethanol plant utilising sorghum, is now hoping to expand its operations in southern Queensland.
  • Plastic waste – At Griffith University a waste disposal system is being developed that turns household plastic waste, contaminated plastic waste and targeted plastic waste into fuel.
  • Organic waste – Queensland University of Technology’s Mackay Renewable Biocommodities Pilot Plant (run by the Centre for Tropical Crops & Biocommodities, and available for use by industry and research partners) is a successful example, converting biomass into biofuels, green chemicals and other bioproducts. Biomass feedstocks include: sugarcane bagasse, trash, molasses, corn stover, forestry residues, sweet sorghum, energy grasses and other crops.
  • Landfill gas – The Swanbank Renewable Energy Facility, a Joint Venture between LMS Energy and Remondis is producing electricity from methane gas harvested by drilling into landfill sites.

Developing a biofuel project in Queensland

The regulatory requirements for developing a biofuel project in Queensland will depend on the nature of the biofuel – biogas, liquid fuels, and on the nature of the feedstock. These factors determine which legislation applies to a particular project.

For example, the Queensland Government provides the following guides for biogas production:

  • Starting a biogas project – an overview of the most common ways to collect and use biogas which explains general regulatory requirements and approval processes.
  • Biomethane gas installations in Queensland – information for designers, installers and operators of biomethane gas installations that detail the safety, health and compliance obligations for biogas operating plants.

Liquid fuel production, such as aviation fuel, will have specific production facilities, and therefore different regulations will apply. The following provides a good general guide:

  • Renewable energy project development guide – a snapshot of the processes involved in developing a renewable energy project in Queensland; such as generating renewable energy, selecting a site, transmission and distribution network connections, development planning and approvals, power purchasing arrangements and funding assistance.

Relevant legislation and guides to take into account may include:

Use and disposal of Biosolids Products – Guidelines – Queensland currently applies the New South Wales Guidelines (2000).

For an assessment of the regulatory framework impacting your biofuel project please contact Tony Conaghan | Partner | tconaghan@tglaw.com.au