The world of biodiesel is changing fast and Australia is rapidly catching up. You may already be buying a five per cent blend of biodiesel from marina fuel pumps without even knowing it. However, biodiesel has become a viable diesel extender only because of higher crude oil pricing. But ‘growing’ fuel, rather than pumping it out of the ground, is expensive.

Biodiesel is typically a fatty acid methyl ester (FAME), made by the reaction of vegetable oil or animal fat with ethanol or methanol, in the presence of a catalyst.

The characteristics of biodiesel depend on the feedstock: for example, tallow produces a biodiesel that typically has almost the same cetane (energy) level as diesel, but canola may produce biodiesel of around 90 per cent of diesel’s cetane level.

Biodiesel has excellent lubricity, which is good news for injection system components, plus a higher flashpoint than regular diesel, making it safer to handle. Biodiesel is also more biodegradable than diesel.

Straight biodiesel has the potential to reduce greenhouse gas emissions by up to 90 per cent, in the case of biodiesel made from waste cooking oil, and by 30 per cent in the case of tallow or canola feedstocks. The downside is a potential increase in nitrogen oxide emissions, but these can be reduced by catalytic conversion.

The major problem with biodiesel is quality control, both at the point of production and when in storage. There is an ongoing European study into the stability of biodiesel in differing storage conditions.

There is a growing ‘cottage industry’ in biodiesel production, with individuals all around the world setting up home biodiesel production. DIY biodiesel information is readily available on the internet. However, quality control of the output from these installations is a major concern for diesel engine makers.


The European Union is the undisputed leader in biodiesel, with production estimated at over 90 per cent of global output.

EU agricultural policy encouraged commercial production of biodiesel from 1993 and a decade later the EU Biofuels Directive set a target for biofuels to contribute five per cent of total liquid fuel consumption by 2010. Progress towards that target is supported by tax exemptions in certain European jurisdictions.

Biodiesel production capacity in the EU has soared in recent years, reaching more than seven billion litres in 2006.

Across the Atlantic, considerable groundwork has been completed to establish a biodiesel industry in the US, largely driven by the soybean industry. US production rose from less than 100 million litres in 2004, to almost 300 million litres in 2005.

In Australia, the Federal Government has established a biofuels market. Initiatives from Canberra include a gradually-reducing excise concession until 2016, a capital grants scheme and a biofuel production target of 350 million litres by 2010. However, the Biodiesel Association of Australia (BAA) says that the biodiesel production excise of more than 38 cents per litre is causing great uncertainty for the future of the fuel in Australia, especially for small, decentralised producers. Producers must pay the government excise for every litre they produce, regardless of whether it is used, sold or given away.

The BAA says there is large potential for biodiesel. Sustainably produced local oil crops, converted for use as a renewable fuel used in existing engines, make an attractive carbon-neutral proposition, but to compete economically the BAA says there must be a subsidy for biodiesel, similar to those offered to other fuels in their development phase, such as LPG.

Nevertheless, plans have been announced by specialised biofuel producers to boost total Australian biodiesel production to around 650 million litres per annum over the next two years, with BP planning a further 110 million litres of biodiesel to be produced at its Brisbane oil refinery from tallow.

At present, only three plants are producing in volume, but four new sites under construction will quadruple local capacity in the near future.

With Australian diesel consumption running above 14 billion litres per annum, the biodiesel industry should have the capacity to capture around five per cent of that market by 2010.


European engine makers have by far the most experience with biodiesel fuels, since the EEC produces 95 per cent of the world’s biodiesel.

The most common biodiesel diet in Europe is five per cent biodiesel in 95 per cent diesel fuel. This B5 blend is approved by all European engine makers and pumps delivering it don’t need any labelling.

The USA’s Engine Makers Association also approves B5, provided the biodiesel meets quality standards.

This five per cent blend meets the Australian Standard for diesel fuel and is the diesel fuel ‘extender’ that is being promoted here.

Recording-breaking NZ wave-piercer, Earthrace has pioneeered the use of biodiesel fuels.

Australian marine diesel pumps deliver B5 without specific labelling.

Australia has published a fuel standard for biodiesel under the Fuel Quality Standards Act 2000. It is referred to as Fuel Standard (Biodiesel) Determination 2003, Table 1.

While the technical requirements of this standard include limits that are found in both the US ASTM D6751 and Europe’s EN 14214, it is identical to neither of these.

The 2008 Position Paper on biofuels canvassed the Australian fuel quality situation and concluded that the current unlabelled B5 situation would continue and that Australia would work towards a B10 blend, following the initiative set by the EEC.

Europe is examining raising the overall biodiesel content to 10 per cent, but this will happen only after further liaison with diesel engine makers.

The powerful Engine Makers Association, a group of international major diesel engine producers, is now studying the implications of a diesel/biodiesel blend with up to 20 per cent biodiesel.

Cummins has a commitment to warrant its engines to operate on standards-compliant B20 biodiesel in the near future. At a meeting in Sydney on August 8, Cummins’ engine business vice president, Jim Kelly, told a group of journalists that B20 operation is quite feasible, but fuel certification is difficult, because of different biofuels standards around the world.

Peugeot, the world’s largest producer of diesel engines, is ahead of the game – in its car diesels, anyway. The Peugeot HDi range of vehicles can successfully operate on biodiesel, which meets or is equivalent to the EN14214 Standard to a maximum blend of B30.


The quality of biodiesel has been a major concern for engine makers, all of whom have requested an international standard. In July 2008, the Worldwide Fuel Charter published its draft document, Biodiesel Guidelines, which is expected to be accepted by global engine makers. The Worldwide Fuel Charter was established in 1998 and represents nearly every major marine diesel engine maker.

The guideline document lists the chemical content requirements for 100 per cent biodiesel blend stock, intended for mixing with petroleum-based diesel fuel to a maximum of five per cent.

Doubtless, future publications from the WWFC will cover characteristics for biodiesel blends in higher ratios.

The results of long-term biodiesel storage tests have been appended to the guideline document. In particular, the WWFC notes that anti-oxidants should be added to the fuel during production to limit degradation, and it should not be stored for long periods, or in adversely hot or cold conditions. Importantly, any biodiesel blend fuel needs monitoring until it is used.


One of the main issues to emerge from the 2006 Biofuels Taskforce report was the fact that the 2003 introduction of ethanol-petrol blends to Australia was a marketing and publicity dud. Former PM, John Howard admitted that the ethanol blend program had been badly handled.

It looks as though the biodiesel blend business is also headed down the same wrong track, given the following quote from the Taskforce Report: “Currently, biodiesel is being marketed in Australia at a range of different blends, with consumers not always aware of the percentage of biodiesel in the blend.

“It is important for consumers to be told what they are buying, ie: pure biodiesel or a blend and, if a blend, the concentration of biodiesel in the blend.

“It is also important that information be available to assist consumers in making appropriate fuel choices.

“The Taskforce considers that there is a gap in this information.”

Two years down the track, nothing has changed.

Vehicle and boat owners are still unclear as to what biodiesel is and if they can use it in their diesel engines without voiding their warranty.

It’s possible to run marine engines on higher concentrations of biodiesel, but it’s unlikely that this exercise would be either financially beneficial or easily achieved. For a start, you need to establish a reliable biodiesel supply that’s cheaper than diesel. The next step is to assure yourself that the supply is of a consistent quality that meets the fuel standard required by your engine supplier. In fact, you need a written approval from the engine maker to use biodiesel blends above B5 in your engine.

Next, it’s vital that the biodiesel is stored in a manner that takes into account its propensity to oxidise and its higher water absorption tendency than regular diesel.

It’s a tough road ahead for the biodiesel industry, but it can be done, if the rewards are there in reduced fuel costs.

To preserve engine warranty requirements, most boat owners would be unwise to use biodiesel in blends above B5 in the short term, without the engine maker’s written approval.

After all, you can buy an awful lot of diesel for the replacement cost of an engine.