No 8. February 2013

R&D Approval for Second Generation Bioethanol Project

ENEnergy Australia (ENA) has received R&D tax incentive scheme approval from AusIndustry for the development of a commercial scale bioethanol plant and biomass plantation in northern Australia.

The project will be able to process up to 1 million dry tonnes of biomass per year and produce 7,500 barrels of ethanol/ butanol per day. The company said this will be the first stage of a much larger project and the proving ground of a new and sustainable industry for Australia.

ENA expects that over three to four years the first stage of the project will cost about $600 million including past development work in Australia and overseas.

The project will not use viable agricultural land, and will produce its own feedstock, Arundo Donax, which is not edible and has been successfully tested in plantations in the region.

The company said the project will be a world first and will demonstrate the viability of advanced bio energy projects using the ENEnergy technology in Australia.

The R&D tax incentive approval is to support the funding and building of a plantation and processing plant based on technology originally developed by ENEnergy, a UK company domiciled in Norway. ENA will receive a cash refund on Australian and overseas development expenditure totaling 45 per cent of total project expenditure.

ENEnergy chief executive, Hans Olav Bjorenak, said the company had received the approval as part of a suite of funding arrangements it is pursuing to realize its ambitious growth plans.

"AusIndustry undertook a rigorous review process that included our project plans and aspects of the technology. They built an understanding of the potential for this technology to be a game changer for the Australian economy and the environment," he said.

The first project is planned for the West Canning region of WA. However, Shaun Colley of Ecofficency, who is assisting ENEnergy with its commercialization, said the R&D approval covers the whole top end of Australia in case the company finds that it is not possible to do the first project there.

"For example we believe that there is great potential in the Gilbert River region of North Qld but the area suffers from limited infrastructure so you would probably need to increase the size of the project (and hence the investment size) in that area to justify the building of infrastructure," he said.

The project could eventually supply 375,000 barrels per day for the global market.





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