Bio - fuels, Southern Hemisphere market growing fast

The world's largest biodiesel plant which will eventually produce 1.8 million metric tonnes of biodiesel a year, is being put up in a US$130Mn project by Australian renewable energy firm Natural Fuel Australia Ltd on Jurong Island in Singapore. Based on refined palm oil as feedstock, it will serve markets in Japan, Korea, Taiwan and the west coast of the US. Part of what is projected to be worth globally, US$1 trillion by 2020.

There are also prospects of a world oversupply of glycerine as it will also produce 60,000 tonnes of pharmaceutical-grade Glycerin, which has uses in cosmetics and drugs production.

The plant represents one of Australia's largest single manufacturing investments in Singapore to date.

Richard Selwood, Managing Director of Natural Fuel, says of the bio - diesel market which is growing at 30% year on year

"At the moment, because it's grown from a very small base, the growth is quite spectacular, probably 30-plus percent per annum. I don't believe that a long term is sustainable. But the market, let's say, probably will be about 5 percent of the total fuel market."

The world's largest palm oil producers produce about 33 million tones of palm oil a year, or about 80 percent of the world's market. Natural Fuel says Singapore's easy and direct access to this crop as well as others from Australia (canola and soya) is a key part of its strategy to secure production feedstock.

Selwood says:

"We have long-term contracts with suppliers like ConAgra. They guarantee us the feedstock, which would be sourced out of RSPO (International Roundtable on Sustainable Palm Oil) members in Malaysia and Indonesia. And we're also experimenting with growing soy crops in the top end of Australia, northern Australia, which can also be used in the Singapore plant. And because Singapore is so well located, we can source from anywhere in the globe."

Natural Fuel says the plant becomes profitable with mineral oils priced above US$40 and currently plans to build 3 other biodiesel plants in Houston in the United States, and in Darwin and Sydney in Australia.

World's largest independent terminal operator Royal Vopak will provide storage, pipeline, equipment and logistic services for its Singapore plant.

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