From farm gate to fuel tank

What do you do if nobody wants to buy your product? ProGreen Biofuels set up a new company and became its own customer.

The result was more than just an example of successful vertical integration. As well as creating a marketable product – on-site generation of carbon-neutral power for the construction and mining industries – it provided an opportunity to prove the credentials of ProGreen’s product.

Removing the risk

ProGreen Biofuels is a supplier of biodiesel. The problem was that, until recently, most diesel engine manufacturers declared that use of biodiesel would void their warranties. Potential customers were understandably reluctant to take on the risk, so ProGreen Biofuels set up Green Power Solutions (GPS) to supply, fuel and maintain generators that power remote construction and mine sites. This sees GPS take on any warranty-related risks. With both generators and delivery tankers fuelled with 100% biodiesel, all the customer needs to worry about is how to make best use of their carbon-neutral electricity.

Two years on and it turns out that the risk was well worth taking. None of the generators has experienced a single fuel-related problem.

Rev head with a green streak

Driving both businesses is Managing Director Danny Williams. With his background in motorsport and mining Danny is an unlikely green evangelist. His epiphany came when managing Australia’s largest mine de-watering project. “We were pumping thousands of litres of fresh water every second to create a river that disappeared into the desert. We were using up to 30,000 litres of mineral-based diesel and creating over 80 tonnes of carbon dioxide every day,” he says. “In both mining and motorsport I experienced some of the most vulgar use of fossil-based fuels imaginable.”

This lead Danny to a simple resolution. “My life goal now is to ensure I exercise my duty of care to leave an environmental footprint that will have little or no detrimental effect on what I leave for my grandkids or their grandkids.”

A brief flirtation with booze

Influenced by his motorsport background, Danny’s initial interest in biofuels revolved around ethanol. However, it soon became clear that there was huge potential for biodiesel so the business redirected its focus. A key to ProGreen’s success was the work put in to establishing handling and storage procedures. This ensured a seamless transition for customers making the switch to biodiesel.

“We haven’t had any mechanical failures, but we have had to learn a few hard lessons in storage and quality control,” says Danny. “In overcoming these problems we’ve gained a better understanding of using biodiesel than anyone else in the country.”

The hard questions

Three big questions are often raised in relation to biofuels. Danny is quick to respond to each of them.

Is biofuel production a threat to food production? “There are hundreds of potential oil seed crops, and many of them improve the soil. As part of sound crop rotation practices, production of biodiesel can enhance food yields.”

Does production of biodiesel produce more energy than it consumes? “One litre of biodiesel is enough to produce three and half litres, so it is energy-positive. New crops and production technologies will improve yields.”

How does biodiesel compare on cost? “Biodiesel is exempt from duty through the Cleaner Fuels Grant, so that puts us on a par. However, the diesel fuel rebate tips the scales back in the favour of mineral diesel when used in an off-road-exempt application.” Again, improvements in crops and production processes will help to favour of biodiesel.

One milestone for GPS was to be recognised as a green power generator by the Office of the Renewable Energy Regulator. GPS can now create Large Generation Certificates (renewable energy certificates), the sale of which helps to make biodiesel financially more attractive.

As committed as he is to the environment, Danny recognises that it is fuel security and diminishing oil reserves that are likely to be the main drivers of the switch to biofuels. On pure availability and price grounds, the main competition for both power generation and transport will come from natural gas.

Fringe benefit

ProGreen Biofuels and Green Power Solutions could be considered fringe benefits of the mining boom. The Williams family owns WestLink Resources, an equipment hire company that supplies the mining industry. The profits from WestLink supported the research into alternative fuels, including the establishment of an engine test facility in collaboration with RMIT University. Further development of the fuels incurred substantial R&D costs, but Danny says the business has now turned the corner.

Integrated all the way

The future for biofuels the ProGreen way is full integration from farmer’s field through production and delivery to the final customer. All feedstock will be sourced from Australian farms. “I grew up in rural Australia, and supporting our farmers is an important part of our philosophy,” says Danny.

The business is evolving rapidly and new alliances are being formed to take the existing level of vertical integration even further. If Danny has his way, it won’t be long before ProGreen biodiesel is appearing in a service station near you.

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