Mission Impossible: Economic Biodiesel Production  

Yet another Australian biodiesel producer has come to grief as a result of rising feedstock prices, with Mission Biofuels being the latest to give up (though they hoping to revive biofuel production using jatropha at a later date).

Mission Biofuels Ltd says current high feedstock prices make it unviable for to consistently produce biodiesel for the foreseeable future. Biofuel production has been criticised for creating ecological problems and diverting crops away from food supply, amid growing concern about global food shortages.

Biodiesel is made by combining alcohol with vegetable oil. Mission Biofuels is currently using crude palm oil but its goal is to ultimately replace this with an alternative feedstock - a Central American shrub, Jatropha, which the company cultivates in India for its inedible seeds that contain 30 per cent oil.

Crude palm oil remains the cheapest vegetable oil as the cost of rapeseed oil and soy oil have increased sharply, the company said. Mission Biofuels said in a statement that it would only produce biodiesel if it could do so profitably.

"This will only be possible if we can secure sufficient quantities of feedstock at reasonable prices or if we are able to achieve higher prices with our off-take partners in both the US and Europe," it said. "The company has been investigating several opportunities to secure moderate quantities of feedstock at reasonable prices which will allow us to produce and sell biodiesel on a jobbing basis."

It expects to produce and sell about 4,000 tonnes of biodiesel this month and is ramping up its production of pharmaceutical grade purified glycerine to occupy its biodiesel plant in Malaysia in between biodiesel production.

Mission Biofuels' wind power and feedstock businesses are performing well, and it plans to add more windmills, totalling 15-18 megawatts of generating capacity, to its business in coming years. The windmills will assist the company to substantially reduce its effective tax rate for its feedstock operations this financial year while generating tax-free income by producing saleable electricity for the next 10 years.