The 45 million litre per annum Picton plant, near Bunbury, is the second plant to be commissioned by ASX-listed biofuels developer Australian Renewable Fuels this year.

The plant will produce biodiesel from locally sourced canola, animal fats (tallow) and recycled vegetable oil using the German-developed Energea process, licensed to ARF in Australia.

The biodiesel produced at the plant will be sold to local fuel distributor Westfuel under a four-year offtake agreement, with an estimated value of $A200 million at current spot prices.

Speaking at the launch, Campbell said the Australian Government was a strong supporter of the biodiesel industry, which was on track to meet its share of the biofuels production target of 350ML by 2010.

“As well as tax concessions, the Government has committed $37 million under the Biofuels Capital Grants Program for ethanol and biodiesel production facilities,” he said.

Campbell noted that ARF had received $A7.1 million under the grants program to commission its first plant at Largs Bay in South Australia earlier this year, which had provided a commercial base from which to commission its second plant.

The Largs Bay plant, launched in March, has secured a five-year offtake agreement with SA fuel distributor Dermody Petroleum, worth an estimated $A250 million.

ARF said the Energea process technology has proven it can produce commercial-scale quantities of Australian Biodiesel Standard compliant fuel at the Largs Bay plant, which is nearing the end of its ramp-up phase.

Campbell also announced the foundation of an Australian Biofuels Institute to develop the underpinning technologies and knowledge to ensure a profitable and sustainable Australian biofuels industry.

The institute was conceived by the South Australian Research and Development Institute in consultation with ARF chief executive Darryl Butcher.

“ARF is confident that with the right investment, this program has the potential to make Australia a world leader in biofuels research. It is an exciting concept and I congratulate Mr Butcher and the founding partners for taking the initiative,” Campbell said.

The Queensland Institute of Technology will participate as a founding member of the new institute.

Campbell said the Australian Biofuels Institute would help develop knowledge and technologies to hasten the development of a domestic biofuels industry.

“It is also important that the industry proves it is not reliant on permanent subsidies and can ultimately establish itself as an independent, viable industry,” he said.

ARF said it still plans to complete its forecast rollout of five plants for construction in Australia, bringing the company’s total production to more than 225MLpa.

The company said the use of its biofuels could contribute to greenhouse gas abatement nationally of almost 600,000 tonnes per year.

ARF entered a heads of agreement with Transpacific Industries in April to form a joint venture to confirm the feasibility of and develop a biodiesel plant in Brisbane.

The company said yesterday the study is nearing completion.

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