Why Queensland sugar cane can be the ‘Exxon of biofuels’

The Australian Financial 

1 November 2022

In the battle to supply the carbon-neutral aviation fuel of the future, American entrepreneur Karl Seck reckons Queensland’s sugar cane industry has one big advantage over the vast cornfields of North America.

“The one really good thing about bagasse [sugar cane waste] is it is already aggregated,” he told the Tech Zero podcast when discussing the potential to turn crops into fuels.

“There’s a lot of other feedstocks that are perfectly acceptable feedstocks, just from a science of conversion [perspective]. [But] If you are going out and gathering up yard waste as a feedstock, there’s a lot of gathering costs.

“The same thing can be said for corn stover [the leaves and stalks left behind after harvest]. We have a lot of that in the US and most of it gets left on the field – that’s what’s left over after you harvest the corn kernels.

“You can gather that up and that’s a pretty good feedstock as well, but it’s just more expensive to gather it up.

“You have to make sure you don’t burn a lot of fuel doing that because then you sort of defeated your purpose to make a low-carbon fuel.”

Seck’s company, Mercurius Biorefining, is based in the US state of Washington and has previously tried to establish projects in North America that turn plant matter into “sustainable aviation fuels”.

But Seck now spends most of his time in Mackay, sampling the waste sugar cane spat out the back of the local refinery that is mostly owned by German sugar giant Nordzucker.

“It does look a lot like garden mulch and there is literally piles of it, almost big hills of it,” he says of the way the Mackay refinery aggregates the sugar cane waste into one location.

Carbon dioxide is released to the atmosphere when biofuels are burned, but that carbon was initially extracted from the atmosphere by a plant, meaning biofuels are considered carbon-neutral fuels that do not release additional carbon dioxide into the atmosphere.

On the contrary, new carbon dioxide is added to the atmosphere when fossil fuels are extracted from underground and burnt.

Biofuels a fast path to net zero
Biofuels loom as the fastest and easiest path to decarbonisation for heavy transport sectors such as shipping or aviation, given that the adoption of biofuels will not require significant changes to existing equipment and infrastructure, such as fuel tanks, engines and hydrants.

While electric engines are starting to power small aircraft, few believe they will be capable of powering big commercial passenger planes any time soon.

Less than 0.1 per cent of the fuel burnt by the global aviation sector last year was “sustainable”, but the International Energy Agency believes that will need to rise to 10 per cent by 2030 for the world to achieve net zero carbon emissions by 2050.

The IEA said in a report on the sector in September: “Increasing SAF [sustainable aviation fuel] use from less than 0.1 per cent of all aviation fuels in 2021 to around 10 per cent by 2030 in line with the net zero scenario will require investment in production capacity and new policies such as fuel taxes, low-carbon fuel standards and mandatory blending.”

Oil giant Shell is investing in development of sustainable fuels in the belief that internal combustion engines are likely to dominate passenger cars globally for decades, even if electric vehicles are adopted quickly.

The world’s top motorsport competition, Formula 1, has also vowed to adopt sustainable fuels by 2026 – partly because rival motorsport competition Formula E has the exclusive right to race electric vehicles.

Big airlines are already blending biofuels into their jet fuel at certain airports as part of efforts to lower their carbon footprints.

Qantas and British Airways have started blending waste cooking oil into their aviation fuel at London’s Heathrow Airport.

Hydrants at Singapore’s Changi Airport now supply fuel that is a mix of conventional jet fuel made by ExxonMobil and sustainable fuels made by Neste.

US carriers such as American Airlines and Delta Airlines have commissioned NASDAQ-listed company Gevo to supply vast quantities of sustainable aviation fuel in future, and Gevo is planting huge crops in South Dakota to ensure it can meet demand.

Qantas is among several airlines that have committed to getting 10 per cent of their fuel from sustainable sources by 2030 and the Sydney-based airline has pledged to invest up to $US200 million ($312.3 million) to foster a domestic sustainable aviation fuel industry.

‘The Exxon of biofuels’
Mercurius wants to become a supplier to the industry, and Seck jokes to Tech Zero that his company might become “the Exxon of biofuels”.

“There’s not going to be electric airplanes any time soon, especially not the big, long-haul airliners that people love to go on vacation and conduct business using,” he said.

“There’s really only one alternative in the near or even medium future to decarbonise airplanes, and that’s biofuels and E-fuels.”

While the waste fat, oil and grease produced by commercial kitchens are the low-hanging fruit for sustainable fuels, Seck says there will not be enough of such materials to fully supply the world’s future demand for low-carbon fuel.

Mercurius has established a pilot plant next to the Mackay refinery where it is trialling a new “liquid phase catalytic” method of turning the waste sugar cane into fuel.

There are currently two methods for making biofuels from cellulosic material such as sugar cane waste: a “biochemical” path that involves the fermentation of sugar into ethanol, and “thermochemical”, where the feedstock is heated and gasified and then reassembled at molecular level.

However, both methods emit carbon dioxide as a waste product during the manufacturing process.

Seck’s process relies on liquid hydrochloric acid to work as a catalyst. Heat is applied in the process, but at lower levels than is typically applied in thermochemical production of biofuels.

He says his process has lower carbon dioxide emissions than the two traditional methods and therefore will convert more of the available carbon into fuel and waste less of it.

He is also confident it will require less capital spending on equipment and be faster.

The research is only in its infancy but will produce an intermediate crude product suitable to power a diesel truck.

Financial incentives needed
Seck says the product would not be suitable to power a jet aircraft on its own but would be if blended with aviation fuel.

Crops and organic matter are not the only way of making carbon-neutral versions of diesel and aviation fuel; companies such as Southern Green Gas hope to use direct air capture technology to suck carbon out of thin air and convert it into sustainable diesel and methane.

Seck says the Queensland government had provided a lot of support to help Mercurius set up its Mackay trial.

“Without them, we wouldn’t be here,” he says.

But further government action might be required to convince the likes of Mercurius to sell their product here.

“If I was making jet fuel in Queensland, I’d send every drop of it to California ... because of their very generous credits,” says Seck. “That’s what companies do now from Singapore and other places; send everything to California and take advantage of the credits.”

California has offered financial incentives toward those reducing the carbon intensity of transport fuels since it introduced the Low Carbon Fuel Standard in January 2011.

Those credits can now be claimed in addition to incentives included in US president Joe Biden’s Inflation Reduction Act, which will offer $US1.01 for each gallon of biofuel produced and $US1.25 for sustainable aviation fuels.

“If Australia wants to actually burn to biofuels they make here, there has to be some kind of incentive to level that playing field out in my view,” says Seck.

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