Power supply
The mining industry is one of the world’s largest polluters, making the search for biofuels even more critical.
instead, it is used directly in typical diesel production engines. This makes biodiesel a renewable option that is both commercial with an immediate impact. “A man could ring me tomorrow, and we could be shipping in biodiesel to them in a matter of weeks,” Chomley notes. “There are not many other solutions that [mine operators] could do that have anywhere near that sort of lead time.”
The only associated cost is buying the biodiesel itself – which, granted, remains the largest and most difficult obstacle to overcome. The limited availability of current biodiesel production means there is, of course, a finite amount of resources compared with petroleum diesel, driving up the prices of biodiesel in comparison. Then there are additional issues with taxation, which hikes up prices even further. “In Australia, there’s no excise on diesel used in mining. So, companies get the full diesel exhaust rebate and basically, they’re just paying what you use,” adds Chomley. “The excess on mineral diesel is AUS$0.50 a litre, while the excise on biodiesel is AUS$0.10 a litre. But in both cases, the customer can claim the full rebate. So that’s a significant benefit for diesel users.”
4.9% 20
The percentage of its emissions that the Australian mining industry is required to cut annually following updates to the government’s Safeguard Mechanism.
Australian Department of Energy, Climate Change, the Environment and Water
He explains that this typically pushes petroleum fuel prices to around AUS$1.50 per litre while biodiesel would be around AUS$2. With margins like that, you can understand why the economic argument remains the hardest to overcome and convince a mining operator. “Over the years, people have suggested that the government should reinstate and remove the excess rebate, but you can imagine the publicity for the mining industry. The average diesel car user is paying the full excise. They may argue, well, why shouldn’t the mining industry pay?” counters Chomley. Despite the financial burden, this hasn’t stopped the larger mining operators from experimenting with biofuels. In May 2022, Rio Tinto announced a partnership with BP in which they trialled sustainable biofuels to power its marine fleet for 12 months. Using a combination of fatty acid methyl
esters – a fuel derived from recycled cooking oils – and very low sulphur fuel oil, Rio Tinto hoped it would reduce its emissions by 26% in comparison with standard marine fuel oil. Earlier this year, BHP announced it was trialling the use of hydrotreated vegetable oil (HVO) to power equipment at its Yandi iron ore operations in Western Australia. It is part of BHP’s target to reduce operational greenhouse gas emissions by at least 30% by financial year 2030. While the company ultimately looks to overhaul its current operations with a fully electric trucking fleet at its sites, since around 40% of its current operational greenhouse gas emissions come from using diesel fuel, biofuels like HVO – which reduce emissions by as much as 90% compared with traditional fuel – will help to keep BHP in line with that 2030 target until the electrification transition can take place. While the results of either trial are yet to be publicly announced, it is hoped that, if successful, biofuels could be widely implemented across the fleets.
A brighter, greener future Back at Just Biodiesel, its Barnawartha plant has a 60 million litre capacity, making it one of the largest biodiesel plants in Australia. It was reopened by Just Biodiesel in 2019, three years after the plant was forced to close when its previous operators fell into administration. At that time, former owners Australian Renewable Fuels pointed the finger at the federal government for the collapse, when taxation was placed on biofuels in 2014 despite previous legislation outlining renewable fuels would be excise-free until 2021. And, as Chomley confirms, those same issues continue to hold back Australia’s biodiesel production and adoption today. Yet, Chomley is hopeful that this will soon change – and that optimism might not be misplaced. Just in November, at Cop28, the Australian government announced it would triple renewables, including biofuels, produced within the country to join a worldwide effort to triple global renewable capacity by 2030. And as Bioenergy Australia – the peak body representing Australia’s bioenergy industry – argues, a national biofuel industry could create more than 8,000 direct and indirect jobs, as well as contribute more than AUS$1bn to regional communities. Nevertheless, every percentage, no matter how small, of diesel used in the mining industry that can be substituted with biodiesel will have an impact. As Chomley concludes, “If we could get biofuels to gain 1% of the mining diesel usage, that’d be a good outcome.” That 1% may sound small, but in numbers, that’s 100 million litres of fuel replaced and its subsequent emissions prevented from going into the atmosphere. The arguments for biofuels seem conclusive, now it is time to convince those who can provide the required support and investment to help take it off – or should I say into – the ground. ●
World Mining Frontiers /
www.nsenergybusiness.com
Parilov/
Shutterstock.com
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