Australia, Biodiesel, Crude Palm Oil, Transportation

Natural Fuel Shuts Australia’s Biggest Biodiesel Plant

November 12, 2007 (Platts) – Natural Fuel Australia Ltd. has shut the Darwin biodiesel plant because of poor production economics, just a year after startup and barely months after making its first exports of biodiesel to Asian and US customers, several well-placed industry sources said Tuesday.

The biodiesel plant, which at 120,000 mt/year (2,400 b/d) of biodiesel production is Australia’s biggest biodiesel refinery and one of the world’s largest, was unlikely to restart any time soon, sources said.

The plant was shut in September or October, sources said. The plant opened in November 2006 and hit its nameplate capacity in March. In August, it announced its first export of 7,700 mt of biodiesel to Asia and the US. Calls to top officials from Natural Fuel Australia’s parent companies — Sydney-listed Natural Fuel Ltd. and Babcock & Brown Environmental Investments Ltd. — were not immediately returned Tuesday.

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Sources said that the Darwin plant was struggling to stay profitable, with feedstock costs soaring this year and the value of biodiesel itself not always keeping up. The plant has also struggled with quality issues since ramping up production to capacity levels earlier this year. It could not be immediately confirmed whether the plant was still struggling with
problems over production quality. In March, Natural Fuel and BEI said unexpected characteristics” found in palm oil being run through the plant had introduced impurities
into its biodiesel.

The news is another blow to the biodiesel industry in Asia, which in recent weeks has seen rival producer Australian Renewable Fuels call halt to production at its two plants in Western Australia and South Australia on high feedstock costs. Other biodiesel plants around Asia are also shutting down, relocating or converting production to alternative specialty chemical products, like dioctyl phthalate, a plasticizer that can be used to make PVC.

The closure of the Darwin plant is also bad news for the area. In August, Northern Territory Chief Minister Clare Martin celebrated the first exports of biodiesel from the plant, calling the plant a “great vote of confidence in our future.” Martin estimated at the time that the plant would create about 100 jobs directly and indirectly, and generate
millions of Australian dollars for the local economy.

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3 thoughts on “Natural Fuel Shuts Australia’s Biggest Biodiesel Plant

  1. Anand Prakash says:

    This is another lesson one can learn. At this stage in the industry, we should work harder on the feedstock availability rather than building and running plants.

  2. teek haw says:

    We should be seeing plant building halted and existing plants facing similar production cost issues. not many options for feedstock today…

  3. [The news is another blow to the biodiesel industry in Asia, which in recent weeks has seen rival producer Australian Renewable Fuels call halt to production at its two plants in Western Australia and South Australia on high feedstock costs. Other biodiesel plants around Asia are also shutting down, relocating or converting production to alternative specialty chemical products, like dioctyl phthalate, a plasticizer that can be used to make PVC.]

    as a copied wording above. I know that process is the conventionally batch reactor which not easy to maintain the quality of each batch.

    in Thailand I modified The DOP Plasticizer plant to be Biodiesel plant capacity 300Ton/day to supply biodiesel spec(ASTM+EN spec shown http://www.h2oil.co.th/ME-Spec.pdf) supply to Diesel Blending B2.

    if Australian investor prefer to move the darwin biodiesel plant to Thailand. I can organize with warm welcome.

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