Shell Australia launches new biodiesel facility in Western Sydney

Shell Australia today launched a new biodiesel facility at its Parramatta terminal to supply its Biodiesel 20 (B20) product to the New South Wales market.

Shell’s vice president downstream, Andrew Smith said the launch of B20 transport fuel in NSW is a response to customer demand to reduce the environmental impact of fossil fuels and potential liability under the Federal Government’s carbon pricing scheme.

Smith said that market research showed more than 50 per cent of commercial customers would consider using B20 in their fleets for either taxation or environmental reasons.

“Shell is committed to understanding customer needs, and when we asked them if they would consider using B20 if it was available 28 per cent they said they would because of the tax benefit,” he said.

Under current carbon pricing, biodiesel attracts a zero impost by the government.

“Given the zero rating of biodisesel under the carbon pricing scheme, using a B20 fuel in their trucks can help affected customers significantly improve their bottom line.

“A further 36 per cent said they would consider B20 because of the positive environmental aspects of using the fuel.” Smith said.

Shell’s B20 is a combination of diesel and a bio component produced from vegetable oils or animal fats that meet Shell’s sustainability standards.

Logistics Magazine announced the launch of Shell’s Diesel Extra fuel in 2011, at the time senior fuels and lubricants technical advisor Mick Pattinson, said the new fuel would help the road transport sector improve fuel efficiency and reduce their maintenance costs. According to the company, the Shell Diesel Extra can deliver fuel savings of up to 3 per cent over the lifetime of a vehicle compared to regular diesel.

Discussing biodiesel’s future in the mining sector, Australian Mining reported that bio-fuels can save company’s money and reduce emissions, but like any new technology, some adjustments need to be made when it comes to implementing the technology on mine sites. There are a number of both advantages and complications of using higher blended fuels.

At the time Ellis told Australian Mining that a "financial incentive around the carbon pricing scheme and environmental incentives" were "two key reasons we’d expect mining companies would be interested in this fuel."

Darren Barwick, Shell’s technical mining team leader, points out that choosing the right feedstock for biofuel is the key to ensuring it works for your business but admits there is "no perfect feedstock that fits every application".

Barwick said that although biodiesel can be used now on current infrastructure, things like poor quality feedstocks can create operational issues.

Because biodiesel is made from biological products it reacts differently to mineral diesel when put under different pressures and these are the most important things to keep in mind when making the decision to incorporate the product into operation systems.

However given its higher flashpoint, biodiesel is also less likely to ignite than conventional diesel providing an additional level of safety for underground mining application, as opposed to LNG or other such products where you have to invest in new infrastructure and technology.

He added biofuels held a distinct advantage for companies because they can use them ‘straight away’.

Barwick says interest from mining companies who want to incorporate the fuel is strong.

“There is definitely interest in using bio fuels,” he told Australian Mining.

“They know it’s there but don’t know much about it or who may be a bit worried about using it because in the past there has been some poor quality bio fuels in the market place which has caused issues.”

Biofuels Association of Australia said adopting second generation technologies when they become viable will be a key way to sustain the mining, transport and infrastructure industries but says alternative feedstocks are needed, as well as additional infrastructure and more consistent access to markets.

B20 is already available from Shell’s Melbourne terminal and Shell said they plan to expand availability across the country.

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.