THE owner of the Manildra Group Dick Honan has dismissed a report that has questioned the effectiveness of the ethanol industry as “garbage” and has warned if the federal government withdrew its support the Bomaderry plant would have to close.

The Bureau of Resources and Energy Economics (BREE) report raised concerns about the ethanol industry that receives $108 million a year from the federal government’s Ethanol Product Grant Program.

With predictions of likely cuts to come in the May budget, the report has prompted speculation the subsidy may be scrapped, meaning the ethanol industry could be the next to feel the Abbott government’s hard line on requests for assistance.

The EPG was introduced by the Howard government in 2002 but the BREE report questions the effectiveness of the scheme, saying the subsidies were producing minimal economic or environmental benefit and might even be responsible for higher costs to motorists.

Manildra’s Bomaderry plant, the biggest manufacturer of ethanol in Australia, receives the lion’s share of the subsidies.

“I’ve seen the report and it is garbage,” Mr Honan said.

“It’s a pity a tree had to be cut down to make the newsprint.”

Mr Honan has warned in the media that the Bomaderry plant would be closed if the federal government withdrew its assistance for the industry.

“It wouldn’t be viable for the renewable fuel industry in Australia if the subsidy was withdrawn,” he said.

“That was bipartisan and we don’t see any change to that.

“We’ve certainly had no communications that that will change.”

Mr Honan said Manildra’s Bomaderry plant had 300 employees, while there are also extra staff at three other locations in Gunnedah, Manildra and Narrandera, who supply raw materials for the company’s operations.

As well as producing ethanol at its Bomaderry complex, Manildra also produces a host of other products such as starch, gluten, glucose syrup and brewers’ syrup.

There has been more than $600 million in capital investment on the site in the last two decades, more than $300 million of that in the past six years.

Producing 300 million litres of ethanol a year, Manildra is the largest producer of the fuel in Australia.

The company uses wheat starch to make around 70 per cent of total Australian production.

United Petroleum’s plant in Dalby, Queensland uses red sorghum to make 80 million litres of ethanol and Wilmar Bioethanol uses molasses from sugar at Sarina, Qld to make 60 million litres.

The BREE report estimates that Australia’s three ethanol producers employ a combined workforce of 200, costing taxpayers between $545,000 and $680,000 per job.

In 2012-13, petrol sales in Australia totalled 18.7 billion litres, a decrease of 4.8 per cent from consumption levels in 2011-12.

Ethanol-blended petrol (EBP) accounted for 13.8 per cent of total petrol sales in 2012-13.

“Why should it be altered when there are 58 countries in the world with national mandates?

“The ethanol industry received 38 cents a litre excise exemption but we discount to the oil companies 47 cents, so we give back more than what we receive, how could we be taking a subsidy?”

Mr Honan said suggestions the subsidies for ethanol production may be cut were nothing more than “speculation”.

“We’ve had no correspondence from the government,” he said.

“Legislation was passed in 2011, bipartisan legislation, to extend the excise exemption on ethanol and biodiesel to 2021.


http://www.southcoastregister.com.au/story/2087481/ethanol-upset/?cs=203




Should Abbott force up cost of living transport costs for mums and dads across the country  … or will he cave and keep the tax payer support?

The excise exemption should be enough.

Manildra is also a generous donor to both sides of politics.

Should Abbott force up cost of living transport costs for mums and dads across the country  … or will he cave and keep the tax payer support?

Whether you like it or not, there are a lot of cuts coming in this budget to restore some stability after the Rudd/Gillard Years of Profligacy.
This sounds like an eminently suitable one.

ethanol industry is subsidised about $530 000 per employee in the industry ... the dole is less than $20 000 .... where's the value for money for the taxpayer?

Not only that but subsidising the ethanol industry means cheaper imports are kept out of the market and Australian families end up paying more for their petrol

What is Abbott waiting for? Just because Howards brother runs manildra,why should taxpayers subsidise them?

John Smith wrote on Feb 14^th, 2014 at 10:16am:

ethanol industry is subsidised about $530 000 per employee in the industry ... the dole is less than $20 000 .... where's the value for money for the taxpayer? Not only that but subsidising the ethanol industry means cheaper imports are kept out of the market and Australian families end up paying more for their petrol What is Abbott waiting for? Just because Howards brother runs manildra,why should taxpayers subsidise them?

For once, I agree with you!

John Smith wrote on Feb 14^th, 2014 at 10:16am:

ethanol industry is subsidised about $530 000 per employee in the industry ... the dole is less than $20 000 .... where's the value for money for the taxpayer? Not only that but subsidising the ethanol industry means cheaper imports are kept out of the market and Australian families end up paying more for their petrol What is Abbott waiting for? Just because Howards brother runs manildra,why should taxpayers subsidise them?

The exorbitant cost of renewable energy.

Do you want renewables or not?

I refuse to buy ethanol, its like watered down fuel....

Swagman wrote on Feb 14^th, 2014 at 10:41am:

John Smith wrote on Feb 14th, 2014 at 10:16am: ethanol industry is subsidised about $530 000 per employee in the industry ... the dole is less than $20 000 .... where's the value for money for the taxpayer? Not only that but subsidising the ethanol industry means cheaper imports are kept out of the market and Australian families end up paying more for their petrol What is Abbott waiting for? Just because Howards brother runs manildra,why should taxpayers subsidise them? The exorbitant cost of renewable energy. Do you want renewables or not?

Don't use that excuse ... we would still have ethanol with or without the subsidies ...if anything it would be cheaper without the subsidies thereby encouraging more customers to use the renewable v's the fossil fuels

BlOoDy RiPpEr wrote on Feb 14^th, 2014 at 11:26am:

I refuse to buy ethanol, its like watered down fuel....

it's not like watered down fuel, it is watered down fuel
most cars manufactured today are built to work with the ethanol based fuel .... i wouldn't put it in an old car, but the new cars are fine

John Smith wrote on Feb 14^th, 2014 at 11:28am:

Swagman wrote on Feb 14th, 2014 at 10:41am: John Smith wrote on Feb 14th, 2014 at 10:16am: ethanol industry is subsidised about $530 000 per employee in the industry ... the dole is less than $20 000 .... where's the value for money for the taxpayer? Not only that but subsidising the ethanol industry means cheaper imports are kept out of the market and Australian families end up paying more for their petrol What is Abbott waiting for? Just because Howards brother runs manildra,why should taxpayers subsidise them? The exorbitant cost of renewable energy. Do you want renewables or not? Don't use that excuse ... we would still have ethanol with or without the subsidies ...if anything it would be cheaper without the subsidies thereby encouraging more customers to use the renewable v's the fossil fuels

Ok I actually agree with you.  As a private enterprise it should not be propped up.

I think we should go big or go home when it comes to biofuel.

Above the tropic of Capricorn we have enough sugar to make ridiculous amounts of ethanol fuel, an all of it carbon neutral.

It will cost a lot to establish definitely, but think of not having to rely on the rest of the world for crude oil, which will continue to cause climate change, and will not last forever.

The current model is definitely inefficient however.

Stratos wrote on Feb 14^th, 2014 at 2:50pm:

I think we should go big or go home when it comes to biofuel.

I agree.


Quote:

Above the tropic of Capricorn we have enough sugar to make ridiculous amounts of ethanol fuel, an all of it carbon neutral. It will cost a lot to establish definitely, but think of not having to rely on the rest of the world for crude oil, which will continue to cause climate change, and will not last forever. The current model is definitely inefficient however.

I disagree with the premise that we should use existing agricultural land to grow it. The highest-yielding biofuel crop is algae, processed into biodiesel. It produces about 50 tonnes per year per hectare. No plant crop comes close.

It would take an area of about 12,000 km² of desert with algal biodiesel crops to produce all of Australia's fuel needs - an area about 1/6 that of Tasmania.

Biodiesel yield with algae: 50 tonnes per hectare per year
Australia's oil consumption per year: about 60 million tonnes
Area required to replace oil: 60 million ÷ 50 = 1.2 million hectares = 12,000 km²
Area of Tasmania: 68,400 km².

Bam wrote on Feb 14^th, 2014 at 3:15pm:

I disagree with the premise that we should use existing agricultural land to grow it. The highest-yielding biofuel crop is algae, processed into biodiesel. It produces about 50 tonnes per year per hectare. No plant crop comes close.

Yeah, admittedly I haven't looked into different fuel sources, and the literal millions of square kms of sugarcane in north QLD came to mind.

Issue with biofuel is peak phosphorus, estimated to happen in about 15 years.

Algae comes across as more sustainable.

Ummm in 2011 I drove from Adelaide to Gladstone, the bit from Newcastle on along the coast. Sugarcane is grown in northern NSW and up to where ever.

Stratos wrote on Feb 14^th, 2014 at 3:22pm:

Bam wrote on Feb 14th, 2014 at 3:15pm: I disagree with the premise that we should use existing agricultural land to grow it. The highest-yielding biofuel crop is algae, processed into biodiesel. It produces about 50 tonnes per year per hectare. No plant crop comes close. Yeah, admittedly I haven't looked into different fuel sources, and the literal millions of square kms of sugarcane in north QLD came to mind.

The sugarcane has use in biodiesel production.

https://upload.wikimedia.org/wikipedia/commons/thumb/0/0a/Methyl_Linoleate.png/170px-Methyl_Linoleate.png
Diesel is an ester of a fatty acid. It is produced by reacting fats and oils with an alcohol to replace the glycerol with the alcohol. Sugar cane can produce the alcohol component, both as ethanol from the sugar and also as methanol from the woody residue.