Federal Transport Minister Mark Vaile announced the trial in Brisbane on Monday as part of a broad program to encourage more Australians to choose biofuels at the fuel pump.
“Heavy vehicles account for 40 per cent of Australia's diesel consumption,” he said.
“At the moment, however, no one knows for sure what effect using the B20 blends may have on heavy vehicle engines and no one wants to find out by breaking their truck or risking their warranty.
“The trial will test whether the B20 blend can meet the diesel fuel standard.
“A successful trial will make it possible for road transport companies to seriously consider using B20.”
Vaile said ethanol-blended fuel is 3c per litre cheaper than ordinary unleaded petrol and will help reduce Australia’s dependence on imported oil.
"We will make ethanol more available, by extending the ethanol distribution program, which helps petrol stations install new pumps or convert their existing pumps to sell ethanol blended fuel,” he said.
The program is scheduled to end in March 2008 but Vaile said the Coalition will extend it until June 2009 which he said should lead to more than 400 extra service stations being able to sell ethanol-blended fuel.
“It's time for Australia to get more of our fuel from crops we grow now, rather than prehistoric organisms that died millions of years ago,” Vaile said.
However, the biodiesel industry will view the policy with scepticism. Two Australian biodiesel operators – Australian Renewable Fuels and Australian Biodiesel Group – halted production last week with both companies slamming what they saw as a lack of government commitment to the industry.
Australian governments provided support for ethanol biofuel production – including federal import tax protection until 2011 – as well as marketing campaigns and government use of ethanol-powered vehicles. But no such backing has been given to the biodiesel industry, says Biofuels Association chief executive Bruce Harrison.
The Australian Government last year revised fuel tax laws that stop heavy users of diesel from claiming a rebate on fuel excises if the producer had already claimed a rebate. Overnight, biodiesel producers became significantly less competitive.
Australian Biodiesel Group has called for a state or federal government fuel mandate, which the company said would be preferable to subsidies as it would eliminate wild swings in demand and profitability, and would allow the fledgling industry to survive and grow.
“A requirement that on average, mineral diesel contains 2 percent biodiesel, would mean manufacturing could be scheduled with a high degree of certainty, skilled staff retained and production efficiencies achieved," the company said.
