AR Fuel's biodiesel plant at Largs North in SA recommissioned after fire on Christmas eve last year

December 11, 2012 12:00AM
Valerina Changarathil

Adelaide Advertiser

AUSTRALIA'S largest biodiesel producer Australian Renewable Fuels (AR Fuels) has recommissioned its Largs North processing and storage facility, which was destroyed by a major fire on Christmas Eve last year.

The plant, rebuilt at a cost of $6.5 million, now includes a fuel-blending facility on site and employs about 12 staff. The site is now partially operational, shipping its first truckload of fuel last week - and will be fully operational next month.

The biodiesel is made from tallow and used cooking oil and stored on site.

The company then blends its product with mineral diesel - a mix of 80 per cent regular fuel and 20 per cent biodiesel - for customers.

AR Fuels is exploring options to develop supply channels of recycled mill oils and other waste vegetable oils from the Asia Pacific region.

The recommissioning of the 45 million litre capacity plant comes amid renewed interest in biodiesel, with more transport and fuel companies looking to reduce carbon emissions under the new carbon tax regime. Last week, McDonald's Australia announced it would use biodiesel - made from used cooking oil from its restaurants - to drive its Victorian transport fleet.

AR Fuels national business development manager Anthony Guy was in Adelaide last week, attending meetings with fuel and mining companies for potential supply talks.

"The stars and planets are beginning to align," Mr Guy said.

"Our major customers are now seeing their clients asking for our product. The carbon tax regime is in place.

"We are now marketing not only to fuel retailers but also directly to customers like transport companies and miners.

"The business is only going to grow."

Currently fuel tax rebates are only available for B5 and B20 blends.

However, AR Fuels does supply 100 per cent biodiesel to customers who are willing to forgo the rebate or are using it for power generators on remote sites. AR Fuels now owns Biodiesel Producers Ltd at Barnawartha, Victoria, along with the plants at Largs North and Picton, Western Australia - giving it a total manufacturing volume of 150 million litres of biodiesel.

It also has a blue-chip customer in Shell Australia in Victoria and is expecting more fuel retailers to come on board - especially its neighbours such as BP, which has announced a $20 million expansion of its Largs North terminal The Federal Government in March this year sought feedback on setting a B20 fuel quality standard because of its widespread use and is believed to be preparing its response.

Biodiesel blends currently meet the diesel standard.

Meanwhile, publicly-listed AR Fuels is preparing the groundwork for its merger with Wentworth Holdings early next year, unlocking $14 million in cash.