Australian Biodiesel Group (ABG) last Friday officially opened the country’s largest biodiesel plant at Narangba, north of Brisbane. But chief executive Dr Len Humphreys said recently that the company would not expand its Australian operations and was instead looking at opportunities in the United States.

Humphreys told the Australian newspaper today that the fuel tax bill had created “massive complications” for its customer base. He said the new bill eliminated incentives for off-road users, such as farmers and miners, to take up biodiesel.

Meanwhile, Renewable Fuels executive director Bob Gordon argued that the new legislation substantially reduced the ability of biodiesel to compete in the fuels market. He told the newspaper that under the new legislation, rebates only applied for diesel blended with 5% biodiesel. Before, all biodiesel qualified for the 38c rebate.

ABG’s Narangba facility has the potential to slash greenhouse gas emissions by 150,000 tonnes every year, according to Humphreys. ABG said at full production, the 160 million litre per annum Narangba plant could supply enough fuel to meet the annual consumption of around 150,000 modern diesel cars the size of a Holden Astra or Volkswagen Golf.

“Domestic diesel consumption is set to grow at between two and four percent each year and Narangba will help meet that rising demand, while providing environmental and economic benefits to the Australian community,” Humphries said.

“Biodiesel is a renewable fuel and may be used as a direct substitute for fossil diesel, or may be blended with fossil diesel in any ratio.”

The Narangba facility is already using ABG’s modular continuous transesterification process (MCTP), which uses tallow, vegetable oil and used cooking oil as feedstock to produce biodiesel and glycerol.

ABG started the commissioning process back in June, and announced its first successful production run on July 12.

Company spokesperson Brian Stewart said fuel had been being produced at Narangba since July and transport fuel sales had been taking place since early August.

The company announced earlier this month a joint venture with Boston-based energy investment firm ArcLight Capital Partners, which could lead to the co-funding, construction and operation of one Canadian and two United States biodiesel facilities using the MCTP technology.