C1I7

ETHANOL FROM SUGAR CANE

AS AN EXTENDER FOR

AUTOMOTIVE FUEL IN AUSTRALIA

Submiss ion by CSR Limited to the Senate Standing Commit tee

on Nat ional Resources Inquiry into the Replacement

of Pet ro leum-based Fuels by Al ternat ive

Sources of Energy

Sydney

January 1980

QUT Library

ETHANOL FROM SUGAR CANE

AS AN EXTENDER FOR

AUTOMOTIVE FUEL IN AUSTRALIA

Submission by CSR Limited to the Senate Standing Committee

on National Resources Inquiry into the Replacement

of Petroleum-based Fuels by Alternative

Sources of Energy

Sydney

January 1980

CONTENTS

Page

SUMMARY (i)

1. INTRODUCTION 1

2. ETHANOL: A FUEL EXTENDER WITH ESTABLISHED TECHNOLOGY

Description of ethanol and its uses 2

Production of ethanol 3

Performance of ethanol/petrol blends 5

3. OPTIONS FOR PRODUCTION OF FUEL ETHANOL

"On farm" versus central processing 6

Suitable crops 7

4. SCOPE FOR ETHANOL FROM SUGAR CANE

Long term potential 9

Regional development concept: an immediate solution 10

5. ISSUES FOR GOVERNMENT AND INDUSTRY 13

APPENDICES

1. Treatment processes for distillery effluent 15

2. Ethanol as a fuel extender 20

3. Energy balance considerations for ethanol production from sugar cane 26

4. Copy of Press Release concerning Sugar Industry Consultative Committee on Fuel Alcohol 31

ETHANOL FROM SUGAR CANE AS AN EXTENDER FOR AUTOMOTIVE FUEL

IN AUSTRALIA

SUMMARY

Ethanol from renewable crop resources is one of

several alternative liquid fuels being suggested to replace or

extend Australia's petrol supply. CSR considers there is a

case for the use of ethanol in the 1980's as a supplementary

automotive fuel and this paper identifies the main issues

involved in the introduction of fuel ethanol based on sugar

cane .

CSR is in a unique position to offer an authoritative

view on the question of fuel ethanol. This results from its

diversity of interests which include substantial activities in

the fuel industry (coal, oil shale, petroleum), the

fermentation alcohol industry and the Australian sugar

industry. CSR has been producing ethanol since 1901, and

currently operates three large molasses distilleries which

produce some 90% of the industrial ethanol produced in

Australia. We have also embarked on an extensive research

programme, supported by Federal Government grants, to evaluate

cassava as a starch and energy crop.

Ethanol stands out as the only proven alternative

liquid fuel that could be quickly introduced in significant

quantities.

As an alternative fuel, ethanol is generally

distributed as ethanol/petrol blends, rather than as straight

ethanol. Such blends have been used previously in Australia

and the successful performance of blends in modern motor

vehicles has been demonstrated by large scale use in the U.S.A.

and Brazil.

Various crops could provide the raw material for

fermentation to ethanol but sugar cane is the most attractive

choice for any large-scale fuel ethanol industry in the short

to medium term. The appropriate agricultural practice is well

established in Australia and the distillery technology is

proven and available. The balance of liquid fuel inputs (for

fertilisers, tractors, transport, distillery fuel etc.) against

liquid fuel output is very favourable for sugar cane.

(ii)

Not only is the fermentables yield per hectare high for sugar

cane, but inherent with the harvested cane is solid stalk

material which can be used as boiler fuel to provide all the

energy to run the distillery. Most importantly, the Australian

cane sugar industry with its substantial existing

infrastructure can provide a secure base for co-ordinated and

phased development of the new crop resource.

A large fuel ethanol industry based substantially on

sugar cane could conceivably substitute in excess of 10% of the

nation's petrol needs but 10% replacement could require an

investment of up to $3 billion (1979 costs) and the marshalling

of vast resources, as well as restrict production of sugar for

food to its present level. At this stage, such a venture is

not considered practical.

However, development of selected regional sugar cane

to fuel ethanol industries does appear to be a practical

proposition. By the early 1980's such industries, sited in

cane growing areas, could substitute 2-3% of the petrol used

nationally. This could reduce imports of oil by up to 3%. To

achieve the greatest economy the ethanol would not be

distributed uniformly throughout Australia, but rather, would

be distributed as ethanol/petrol blends in regions surrounding

the distilleries.

For example, it is realistic to contemplate several

distilleries in Queensland producing a combined output of

300,000 to 400,000 kilolitres per annum by 1984, that is, about

15% of Queensland's petrol needs. Other distilleries could be

established in areas not currently used for sugar cane

production, for example the Ord River area which could supply

significant quantities of ethanol to Western Australia and the

Northern Territory. A decision to establish regional

distilleries would not preclude later development to the

national-scale ethanol industry which is currently considered

to be impractical; established regional distilleries could

prove a valuable learning step should circumstances change to

the extent that Australia-wide use of blends is justified.

(iii)

The benefits to the nation of ethanol blends would be

a reduction in oil imports and thus reduced dependence on

overseas oil suppliers. The regional benefits would be

substantial, especially in terms of development and employment

opportunities.

Ethanol produced in regional distilleries from sugar

cane would cost about 40c/litre ex distillery (1979 costs).

Therefore, assuming the current rate of motor spirit excise is

applied to the blend, the retail price of a 15% blend would be

about 3C/litre more than the current price of petrol. If

recent experiences of price increases for crude oil continue,

the current differential of 3C/litre could be significantly

reduced and may disappear altogether over the next 2 to 3

years. That is about the lead time needed to establish a

substantial fuel ethanol industry based upon sugar cane.

Five main issues need to be addressed in order to

assemble a plan for rational, phased development and

implementation of the industry:

1. The need for an automotive fuel extender. A

definitive government assessment is required

regarding the need for fuel extenders,

particularly through the 1980's when a fuel

ethanol industry could have special relevance.

2. Assurance of a distribution and market

arrangement with petrol suppliers to make use of

all fuel ethanol produced and to assure

reasonably remunerative prices for bulk ethanol

over the commercial life of the investment.

3. Appropriate structural arrangements for the fuel

ethanol industry, including those to assure

continuity of sugar cane supply.

4. Environmental acceptability of the new industry.

5. Definitive testing of the performance of vehicles

using ethanol/petrol blends under local

conditions.

(iv)

A sugar industry consultative committee chaired by the

Chairman of the Queensland Sugar Board and representing all the

industry associations, has been formed to study and report on

all aspects of alcohol production from sugar cane (Refer

Appendix 4 ) . CSR is participating in the work of this

committee.

The involvement of State and Federal Governments in

addressing these issues is both desirable and necessary for the

introduction of appropriate legislation- Some Queensland

legislation covering the addition of ethanol to petrol already

exists and was operative during the period 1929-1956 when

ethanol blends with petrol were supplied to North Queensland.

Existing Federal and State legislation relating to the crystal

sugar industry will need careful consideration also.

Probably the most important legislative aspect relates

to the question of concessions for ethanol/petrol blends

relative to straight petrol, for example removal or relaxation

of motor spirit excise for blends. A positive statement of

government policy in this area would enable prospective

participants in a fuel ethanol industry to assess its

feasibility and possibly move towards its commercialisation.

1.

1. INTRODUCTION

Although well endowed with energy resources when

compared to other nations, Australia is not self-sufficient in

liquid fuels. Liquid fuels are vital for a healthy economy,

fueling road, rail, sea and air transport. Ethanol is one of

the alternative liquid fuels which have been suggested to

reduce Australia's dependence on imported petroleum. Ethanol

has considerable attraction since it offers a renewable energy

resource produced in Australia from Australian grown crops.

Ethanol is being used to fuel motor vehicles in other

countries and has been used before in Australia. Brazil is

well advanced on a National Alcohol Programme which is based on

sugar cane and aims at 20% replacement of petrol by 1982, using

various ethanol/petrol blends. The U.S.A. has a fledgling

"gasohol" programme supported by government subsidy to

establish ethanol/petrol blends.

This paper first presents some facts about ethanol and

its use as motor vehicle fuel. It then examines the

feasibility of a fuel ethanol industry in Australia, and the

vital issues involved in establishing such an industry.

2.

2. ETHANOL: A FUEL EXTENDER WITH ESTABLISHED TECHNOLOGY

Description of ethanol and its uses

Ethanol, also known as ethyl alcohol and commonly

referred to simply as alcohol, is one of a large group of

organic materials with the generic name of alcohol.

Another common member of the alcohol family is

methanol, also known as methyl alcohol (formerly called wood

alcohol). Methanol and ethanol are often spoken of together as

alcohol extenders for petrol. However, methanol should not be

confused with ethanol since methanol not only performs

differently in petrol blends, but as an extender it would

probably be derived from non-renewable resources such as coal

or natural gas. Ethanol, on the other hand, would be made from

renewable crop resources such as sugar cane or grain.

Ethanol is probably best known as a constituent of

alcoholic beverages. Pure ethanol is a clear, colourless

liquid which is soluble in water at all concentrations; the

normal commercial product contains 4 to 5% water. Most people

in the community would be familiar with ethanol as methylated

spirits, which is commercial grade ethanol rendered undrinkable

by the addition of a small quantity of denaturants. Anhydrous

(dry) ethanol is available for special purposes.

Ethanol is widely used as a chemical in its own right

and as a basic building block for other important organic

chemicals. Ethanol and chemicals derived from it are used in

the production of a large variety of industrial and consumer

products such as drugs, cosmetics, aerosols, polishes and

cleaning products, lacquers, and printing inks.

3.

Production of Ethanol

Ethanol can be produced by fermentation of sugars by

yeast or synthetically from hydrocarbon-based chemicals.

Fermentation remains the preferred process, completely

dominating the production of potable spirit for beverages and

accounting for some 70% of the 10 million (approx.) kilolitres

of ethanol produced in the world annually for industrial

purposes.

As the era of cheap oil and gas closes, the economics

of fermentation versus synthetic ethanol is swinging further

away from synthetics.

In Australia, the availability of molasses, a

by-product from the sugar cane industry, has enabled

fermentation ethanol to remain competitive against synthetic

ethanol in meeting local industrial demand even when oil was

relatively cheap. Australia has four molasses distilleries

making industrial alcohol with a total capacity of almost

100,000 kilolitres per annum (equivalent in volume to 0.7% of

Australia's petrol consumption). CSR operates three of these

distilleries; the largest is near Mackay and produces about

50,000 kilolitres per annum.

These established molasses distilleries convert to

ethanol just over half of the 650,000 tonnes of molasses

produced annually by the Australian sugar industry. The

remainder of the molasses is used locally for stockfeed or

exported. Any significant expansion in ethanol production for

fuel could not rely solely upon molasses, the availability of

which is strictly linked to tonnage of cane sugar produced. An

abundant crop source is needed.

Ethanol can be made by fermentation of sugars obtained

from crops containing sugars, starch, or cellulose (plant fibre

or wood). If starch or cellulose are to be used, they must

first be converted to sugars by hydrolysis. Commercial scale

starch hydrolysis processes are available, but processes for

converting cellulose to sugars are yet to demonstrate

commercial feasibility.

The more suitable crops for ethanol production are

those quick-growing crops yielding high levels of sugars or

starch. Such crops are sugar cane, sugar beet, cereal grains,

cassava and sweet sorghum.

4.

The processing scheme is similar for all these crops.

The crop must be harvested and transported to a factory where

the sugars or starch are extracted. The sugars (from

hydrolysis in the case of starch) are diluted if necessary to

about a 20% solution in water and yeasts are added which

convert the sugars into ethanol. When the fermentable sugars

have been consumed, the broth is heated and fed to a

distillation unit where the ethanol and some water evaporate,

leaving a large volume of liquid waste for disposal.

The initial distillation step cannot separate from the

ethanol all the water which evaporates with it from the broth.

The wet ethanol product from this first distillation step is

called rectified spirit and contains about 5% water. A further

distillation step of azeotropic distillation, involving another

liquid (such as cyclohexane), produces the dry ethanol required

for making stable ethanol/petrol blends most suited to the

existing distribution and usage patterns for petrol.

Recent research has led to various proposals for

improvements in the technology of fermentation and

distillation, notably for a continuous fermentation process.

If these proposals can be developed to full-scale commercial

operation, there are prospects for some savings in the capital

and operating costs of distillery plant. However, it is

important that such developments be viewed not as radical

changes in technology, but as the on-going improvements one

would normally expect with an established industry. At this

stage there are no valid technical reasons for delaying the

introduction of a fuel ethanol industry.

All distilleries, no matter what crop is being

processed, have a significant commercial problem in disposing

of the large volumes of liquid waste in an environmentally

acceptable manner. Technical solutions are available and a

discussion of effluent treatment procedures, with particular

reference to ethanol production from sugar cane, is included in

Appendix 1.

5.

Performance of ethanol/petrol blends

Blending is the most sensible means for utilising

ethanol to extend the available petrol supplies. Blends of say

10% to 15% anhydrous (dry) ethanol* in petrol would enable

conventional petrol engines to be used and would cause minimum

disruption to the established petrol distribution network.

As recently as the mid 1950's, many Australian cars

were operating on ethanol/petrol blends containing up to 20%

ethanol supplied from the CSR (ANPA) distillery near Mackay.

For nearly thirty years (1929-1956) petrol companies

co-operated under Queensland State legislation** to blend and

distribute this fuel in North Queensland. Of course since then

engines have become more sophisticated and emission controls

have imposed their particular requirements on engine design.

However, reports now coming in from Brazil and the U.S.A. give

great confidence that when using a 10% to 15% ethanol/petrol

blend, motor vehicle performance and emission levels will be

comparable with conventional petrol-fueled operation. In

Australia, various groups have expressed the view that ethanol

petrol blends would be suitable for use in modern Australian

motor vehicles; Ampol Petroleum Ltd. have announced their

participation in a venture to test new technology for the

manufacture of fuel ethanol from grain.

Notwithstanding the justifiable confidence in

ethanol/petrol blends, there are several technical issues which

require consideration before widespread use of such blends.

Therefore, limited field testing of ethanol blends under

current Australian conditions is required. Such testing would

allow the benefits of ethanol/petrol blends to be maximised for

local conditions. The issues requiring particular

consideration are the octane rating of blends, motor vehicle

performance (including fuel consumption), exhaust emissions,

and compatability of fuel system components with blends. There

appears to be considerable scope for energy and cost savings

within oil refineries if the petrol used for blending is

manufactured with a view to fully utilise the octane boosting

properties of ethanol. These issues are elaborated in Appendix

2.

*The use of certain additives in ethanol/petrol blends may improve fuel stability, and could at some future time obviate the need for anhydrous ethanol in such blends. **The Motor Spirit Vendors Acts, 1933-34

6.

3. OPTIONS FOR PRODUCTION OF FUEL ETHANOL

"On-farm" versus central processing

Fuel ethanol could be produced on a small scale

"on-farm" or on a larger scale at a centrally located

distillery.

The larger scale central distillery offers a far more

significant contribution to the nation's liquid fuel

requirements, with the assurance of dependable supplies of

ethanol at the required quality.

In certain circumstances a farmer may consider that

"on-farm" fuel ethanol production for his own use is

economically attractive, particularly if resources such as

unused land, his own labour, or capital are assigned a low cost

in his calculations. However, apart from the fact that

operation of farm-scale stills is currently illegal in

Australia (except for those stills specially licensed for

experimental purposes), a number of important factors would

appear to rule out "on-farm" production of a significant

quantity of ethanol. These include the substantial capital

outlay (major items such as primary extraction equipment are

required as well as the still); the reliability of farm-scale

equipment (yet to be established); the labour requirements

(still operation is time-consuming, and demands some skills not

normally required in farming); the product quality

(particularly with respect to variability); the water content

(which may necessitate the use of emulsions or engine

modifications); and safety and storage considerations.

Furthermore, it would require a large administrative

effort for governments to control health and revenue collection

matters attendant with widespread use of "on-farm" stills.

The above list is not exhaustive but supports the view

that the small potential contribution from "on-farm" production

is outweighed by the inherent problems.

7.

Suitable Crops

Australia has the potential to grow most of the crops

which have been suggested for fuel ethanol, such as sugar cane,

sugar beet, cereal grains, cassava, and sweet sorghum.

However, only sugar cane and cereal grains are currently

produced here in significant quantities and have an established

agricultural practice with substantial alternative outlets for

the crop. This is not to say that cassava, sugar beet, sweet

sorghum, or other crops might not eventually make valuable

contributions as raw materials for fuel ethanol.

Cassava is claimed to be quite drought resistant and

capable of reasonable yields in a range of climatic and soil

conditions not suitable for sugar cane. CSR and Fielder

Gillespie Limited jointly conduct the only farm-scale cassava

research in Australia. Both companies have NERDDC grants to

seek out the most appropriate agricultural practices and plant

strains for local conditions.

Sugar beet is not currently grown commercially in

Australia. However, it may have some application for ethanol

production in certain regions (CSR is currently involved in a

feasibility study of ethanol production from sugar beet in New

Zealand) .

Sweet sorghum has not been widely grown in Australia.

There have been some recent improvements in the strains of

sorghum available as a result of breeding programmes in the

U.S.A., and it is possible that sweet sorghum may have a place

as a supplementary source of fermentables for a distillery

operating predominantly on another crop.

The U.S.A. "gasohol" programme is based on corn, but

there is little potential for growing significant quantities of

corn in Australia.

Australia's farmers will need confidence that large

scale commitment to a crop for fuel ethanol will not prove a

speculative venture. Likewise, the success of the large

commitments required by processors and distributors ought not

to hinge upon the vagaries of an experimental crop.

Accordingly, the obvious choices for mainstay crops are sugar

cane and wheat.

8.

CSR estimates that fuel ethanol will be produced more

cheaply from sugar cane than from wheat if realistic returns

are assumed for large quantities of wheat by-products

(particularly gluten). In the event of large scale production

of ethanol from wheat, the current gluten market would be

oversupplied and prices would fall accordingly.

An important consideration in the selection of a

suitable crop is the energy balance associated with the

production of ethanol. The production and processing of any

crop to ethanol consumes energy for the manufacture and

operation of farm and factory plant and for supplies such as

fertilisers. Sugar cane is inherently favourable as a source

of ethanol because the cane stalk fibre (bagasse) remaining

after extraction of juice can be burnt to provide energy for

the distillery. The energy balance for ethanol production from

sugar cane is further discussed in Appendix 3, where it is

estimated that in the liquid fuel energy balance there is a net

gain of four units for each unit of liquid fuel energy input.

9.

4. SCOPE FOR ETHANOL FROM SUGAR CANE

Long term potential

Australia currently consumes about 15 million

kilolitres of petrol per year. The Department of National

Development has forecast a rise to about 17 million kilolitres

per year by 1984-5. Although there is not necessarily a strict

one-to-one relationship between ethanol and the volume of

petrol it replaces, a 10% replacement of petrol nationwide

would require about 1.7 million kilolitres of ethanol per year

or 17 times the current total domestic production. (For

perspective, Brazil's National Alcohol Programme based upon

sugar cane aims at 5 million kilolitres of ethanol per year by

1982) .

In Australia there are now about 300,000 hectares of

land dedicated ("assigned") to sugar cane. A 10% replacement

of petrol would require an allocation of a further 300,000

hectares of equivalent productivity*.

The availability of readily accessible land for

expansion of cane production falls short of this amount.

Suitable unassigned land in reasonable proximity to existing

sugar mills is estimated very roughly at 200,000 hectares. It

is not possible at this time to estimate what proportion of

this land could be available for ethanol production. This

would depend on many factors, not least of which are the

relative returns from production of cane for sugar and for

alcohol, and for alternate uses of this land.

Additional new cane areas in Queensland and Western

Australia could produce additional cane equivalent to something

over 6% replacement of petrol. These new areas include:

The Ord River area (existing dam)

The Burdekin River area (assuming a new dam built)

*The yield from sugar cane is relatively high; based on average Queensland yields, about 7.5 kilolitres of ethanol are obtainable from each hectare of cane harvested.

10.

The Fitzroy River and Wide Bay/Burnett areas

(irrigation needed)

The Cooktown area {as yet undeveloped)

It is therefore possible, solely from the viewpoint of

land area, that ethanol from sugar cane could supply 10% to 15%

of Australia's petrol demand. The practicality of acquiring or

developing such an area of suitable cane lands for ethanol

production is quite another matter.

Regional development concept: an immediate solution

The scale of a cane ethanol industry to replace 10% of

Australia's petrol needs is very large. It would be equivalent

to duplicating the existing cane sugar industry which has grown

to its present size over more than a century.

Given present circumstances, it is not practical in

Australia to mount a crash programme to produce sufficient

ethanol to replace 10% of petrol within about 5 years. The

disruptive influences would be enormous, not least in terms of

maintaining a viable sugar industry in the interim. The direct

investment would be in the order of $3 billion {1979 costs) ,

that is, on the same scale as large resource projects such as

the North West Shelf development in W.A. Although the initial

infrastructure costs could be minimised by expanding existing

sugar cane areas, these costs would rapidly escalate as new

agricultural areas are opened up to move beyond about 3% petrol

replacement level.

It might be practical to aim for a gradual build up of

ethanol production to a 10% replacement level over say 10 to 15

years. However, commitment to even a gradual development of

such a large industry cannot be recommended at the present

time, as there is some doubt regarding the long-term need for

such a large commitment of community resources. In the longer

term it is possible that other competitive fuel extenders may

emerge, such as liquid fuels from coal and shale. In addition,

some other crop, for example cassava, may ultimately prove a

cheaper source for ethanol than sugar cane.

11.

Two main arguments are therefore advanced against the

establishment of a fuel ethanol industry to replace say, 10-15%

of Australia's petrol needs, namely, the need to marshall vast

resources and the possible emergence of other competitive fuel

extenders.

However, the possibility of a fuel ethanol industry on

a manageable scale should not be ruled out. There are some

real benefits to be derived from the fact that lead times for

ethanol production are less than those commonly encountered in

the fuel and chemical process industries. A significant fuel

ethanol industry (say 2-3% of Australia's petrol needs) could

be established within a few years.

An economic unit size for a sugar cane distillery is

considered to be in the range 50,000 to 100,000 kilolitres

ethanol per annum. This size would enable individual cane

growing areas to develop a significant local industry which

could supply ethanol to supplement fuel supplies in the

surrounding region and in other parts of the state in which the

distillery is located. For example, it is realistic to

contemplate that several distilleries with a combined output of

300,000 to 400,000 kilolitres per annum could be operating

within the existing Australian sugar cane areas by 1984-5.

These would provide enough ethanol to supply Queensland with a

15% ethanol/petrol blend, equivalent to replacing 2% to 3% of

petrol used nationally. The first of these new distilleries

could be operating by 1982-83.

Distillery units could be established on a regional

basis away from existing cane industries but this would require

more extensive development of infrastructure. However

construction of such a unit, for example in the Ord River area,

could contribute significantly to the development of that area

as well as provide supplementary fuel for Western Australia and

Northern Territory.

On the basis of a regional development concept as

outlined above, the cost of bulk anhydrous ethanol ex sugar

cane distillery would be about 40C per litre (1979 costs).

12.

About 60% of this amount is attributable to the cost of the

sugar cane to the distiller assuming that the cane for ethanol

is priced at the same level as cane for raw sugar produced in

the 1979 season.

At 40C per litre, ethanol would be slightly less than

twice the current price for petrol ex the refinery (excluding

excise). For the most appropriate distribution arrangement

where a 15% blend of ethanol in petrol is made available, and

assuming the current rate of motor spirit excise is applied,

the retail price of the blend would be about 3c per litre more

than for straight petrol. If. recent experiences of price

increases for crude oil continue, the differential of 3C/litre

could be eliminated or significantly reduced within the 2 to 3

year lead time needed to establish any substantial fuel ethanol

industry.

The benefits offered by the regional development

concept are substantial. In addition to the general benefits

to be derived from any automotive fuel extender - namely

reduced imports and reduced dependence on overseas suppliers -

fuel ethanol from sugar cane offers a renewable fuel resource

with proven technology. Development of a regional ethanol

industry would strengthen and broaden the base of the local

economy and expand employment prospects in the region.

The 2-3% target could be achieved with a relatively

small investment while at the same time preserving a wide range

of options for future development. In the event that more

competitive fuel extenders are developed commercially, an

ethanol from cane industry on this scale could divert its

production to other markets (for example, as a feedstock for

the chemical industries). This flexibility would allow a

managed phase-out of fuel ethanol production with appropriate

arrangements for amortisation of plant. Alternatively, a fuel

ethanol industry of the suggested size could expand to the

scale required to replace 10-15% of Australia's petrol needs,

which is currently considered impractical, but which may be

necessary in a severe liquid fuels shortage.

13.

5. ISSUES FOR GOVERNMENT AND INDUSTRY

Selective regional development of sugar cane

distilleries and their supporting crop areas appears realistic

from both commercial and social aspects.

There are however, five main issues which must be

resolved promptly to allow timely and co-ordinated development:

1. The need for an automotive fuel extender. The

widely-publicised view of a liquid fuels crisis in

Australia needs to be quantified. A definitive Government

assessment is required regarding Australia's need for fuel

extenders particularly through the 1980's when a fuel

ethanol industry would have special relevance.

2. Assurance of a distribution and market arrangement with

reasonably remunerative prices for bulk ethanol:

- given the present cost differential between

ethanol and petrol and the possibility that a

cheaper alternative may eventuate, commitment by

farmers and processors/distillers of extra

resources dedicated to ethanol production will

depend upon an assurance of reasonable prices for

cane and for ethanol over the commercial life of

the investment.

An important aspect to this assurance would be

some statement as to the intentions of Federal

and State Governments as regards concessions for

ethanol/petrol blends relative to straight

petrol, such as relaxation of excise on

ethanol/petrol blends.

3. Appropriate structural arrangements for the fuel ethanol

industry:

- there need to be arrangements for assuring

adequate and reliable supply of raw material to

the distillery.

14.

- the structural arrangements for an ethanol

industry within the existing cane growing areas

need to be compatible with those of the existing

sugar industry. A sugar industry Consultative

Committee chaired by the Chairman of the

Queensland Sugar Board and representing all the

industry associations has been formed to study

and report on all aspects of alcohol production

from sugar cane (Refer Appendix 4 ) . CSR is

involved in the work of this committee.

Environmental acceptability of the industry:

production of significant quantities of ethanol

would require an expansion of cane areas and

additional cane crushing facilities as well as

the building of distilleries. With respect to

additional cane and crushing capacity, the

environmental impact would be well understood as

it is an expansion of an existing rural industry.

the environmental impact of treatment and

disposal of distillery effluent would need

careful consideration. NERDDC has granted funds

to various groups, including CSR, to conduct

development work.

The establishment of performance data on vehicles using

ethanol/petrol blends under local conditions:

ethanol/petrol blends should be evaluated as

fuels in a range of motor vehicles operating

under Australian conditions with a view to

optimising factors which affect their use. Full

co-operation of the Australian automotive and oil

refining and distribution industries would be

desirable.

15.

APPENDIX 1

TREATMENT PROCESSES FOR DISTILLERY EFFLUENT

Ethanol production by fermentation characteristically

yields as a by-product a large volume of liquid effluent with a

high pollution potential. This appendix briefly describes the

nature of distillery effluent and the processes available for

treatment, concentrating particularly on effluents from cane

juice and molasses distilleries.

Effluent treatment is a major consideration. The

various processes differ significantly in their degree of

technological sophistication and in their relative capital and

operating costs. It is not anticipated that any one process

would be appropriate for all distilleries; rather, the effluent

treatment process most appropriate to a particular distillery

would be determined principally by such factors as raw

material, availability of energy, location and operating period

for the distillery, and demands of the surrounding environment.

Composition of Effluent

Distillery effluent, also known as dunder or stillage,

contains the non-fermentable residues from the raw material as

well as yeast and other chemical by-products of the

fermentation process. The quantity and composition of

effluents from typical molasses and cane juice distilleries of

capacity approximately 160 kl ethanol per day (50,000 kl p.a.)

are shown in Table 1.1.

The effluent is characterised by:

high volume in relation to the volume of ethanol

produced;

high organic solids content, which reflects in a

high biological oxygen demand (BOD) in the

effluent.

significant levels of inorganic material which

has potential fertiliser value, being

particularly high in potassium.

a relatively high level of plant colorants, many

of which are not significantly bio-degradable.

Effluent from molasses distilleries contains much

higher contents of organic, inorganic, and colouring matters

than does effluent from cane juice distilleries. These high

levels of impurity cause particular difficulties in the

treatment of effluent from molasses distilleries.

17.

Effluent Disposal Methods

There are several alternative methods that are

feasible for effluent treatment. The more conventional methods

that are currently available are as follows:

concentration for use as stockfeed

land disposal

anaerobic digestion

ocean disposal

incineration

Concentration for Use as Stockfeed

This disposal method is used widely in Europe where

there is a heavy demand for winter feeding. The effluent is

concentrated by evaporation and blended with fibrous plant

residues .

For Australian conditions, there are some technical

problems in the preparation and storage of such feeds and, in

any event, the economics of intensive feeding of cattle in

Australia would severely limit the market for such a product.

Land Disposal

Irrigation of effluent on to sugar cane farms is

widely practised in Brazil as a means for disposal of liquid

wastes and for returning fertilisers to the fields. In

Australia it is not expected that such disposal will be

generally practical because of the cost of transportation of

effluent to the cane fields, difficulty of disposal during

periods of wet weather and the possible need to restrict

fertiliser application to certain times of the year.

18.

An alternative to disposal of effluent onto cane farms

is intensive irrigation of effluent onto a small area. This

method is used at the Sarina distillery near Mackay, which

handles approximately one-third of the molasses produced by the

Australian sugar industry. The area required at Sarina for

intensive irrigation is relatively small (about 600 ha) in

comparison to the area of cane land from which the molasses

impurities are produced (about 100,000 ha).

In practice this method of intensive irrigation has,

at times, been found inadequate at Sarina, for three principal

reasons:

uncontrollable discharge of partially treated

effluent in periods of heavy rainfall may

temporarily discolour and reduce the dissolved

oxygen content of surrounding waterways;

nutrient build up on the irrigated area provides

conditions favourable for fly breeding in periods

of warm showery weather;

the high concentration of inorganic matter in the

effluent, together with an extremely high

application rate and low soil porosity

temporarily destroys the pasture. (The pasture

recovers rapidly once application is

discontinued.)

These problems are unlikely to be as severe for cane

juice distilleries and, depending upon plant size, land

availability, and soil condition, it is possible that a

manageable land disposal system for cane distillery effluent

could operate satisfactorily.

Anaerobic Digestion

The process of anaerobic digestion can be employed to

convert the organic solids in distillery effluent into a

"biogas" containing methane and carbon dioxide. This gas is

suitable for use as a fuel, and may supply a significant

proportion of the distillery's energy requirements.

19.

Anaerobic digestion may occur within two temperature

ranges that favour development of specific bacteria, i.e.

mesophilic (35-40°C) and thermophilic (50-60°C). The

activity of the thermophilic bacteria is approximately twice

that of the mesophilic bacteria, offering potential for reduced

investment for thermophilic installations. However these

systems require closer control of operating conditions and are

more sensitive to change than the mesophilic systems.

The residual effluent from anaerobic digestion

contains inorganic solids, colour and a small amount of organic

solids present in the original effluent. Some form of

irrigation or other disposal system is needed for this effluent.

Ocean Disposal

It is feasible for distillery effluent to be piped

some distance out to sea, where the depth and flow of water is

sufficient to ensure adequate dispersion of the effluent.

This method, while it would not be available to all

distilleries, could also be used in conjunction with anaerobic

digestion to dispose of the digested effluent.

Incineration

The distillery effluent can be used as a liquid fuel

for steam raising if the organic solids are first concentrated

to a sufficient level (about 60%). The steam so produced may

be used for concentrating the effluent and for the distillation

process .

The principal advantage of this process is that it

destroys colorants and permits recovery of inorganic materials

for re-use as fertiliser. The principle limitation of

incineration is the high initial capital cost of evaporation

and combustion equipment.

Recent work has indicated that incineration processes

installed in molasses distilleries may be able to generate all

the steam required in the factory. The energy balance for

incineration of effluent from cane juice distilleries will be

less favourable than for molasses distilleries, but this may be

unimportant as bagasse may be used as distillery fuel.

20.

APPENDIX 2

ETHANOL AS A FUEL EXTENDER

This appendix covers technical aspects concerning the

use of ethanol, as a straight fuel and as a blend with

conventional fuel, in spark ignition and diesel engines. It

appears that ethanol/petrol blends would have an immediate

application as an automotive fuel, but the use of significant

quantities of ethanol as a straight fuel or as a blend with

diesel will require further development of engines and fuels.

The uncertainties in the use of ethanol/petrol blends

as automotive fuels relate more to optimising the use of

ethanol/petrol blends than to the development of satisfactory

methods for utilising the blend. Trials of limited scope and

duration are necessary to determine the optimum conditions for

use of ethanol/petrol blends in Australia.

Ethanol/Petrol Blends in Automobiles

A number of factors relating to the distribution and

use of ethanol/petrol blends, and to the performance of cars

using such blends, warrant consideration. For the purpose of

this Appendix, a blend is defined as containing 10-15% ethanol

in petrol.

Fuel Stability.

Water is virtually immiscible with petrol;

ethanol/petrol blends containing more than about 0.3% water

separate into two phases, or layers, which can cause cars to

stall. The problems of phase separation are most severe in

colder climates, such as in U.S.A., where extremely low winter

temperatures reduce the solubility of water in petrol.

However, even in such climates, the use of anhydrous (dry)

ethanol in the blend, together with proper maintenance of

transport and storage tanks, has obviated significant problems

with phase separation. Freedom from significant difficulties

would be expected in the warmer Australian climate.

Over time, it may be possible to relax the requirement

for anhydrous ethanol, and to introduce the normal commercial

product (95% ethanol) as the ethanol component of the blend.

However, this will be possible only if additives now being

developed and evaluated prove successful in modifying the

solubility characteristics of water in ethanol/petrol blends.

Vehicle Performance

For most cars, performance with ethanol/petrol blends

should be indistinguishable from that with a petrol of the same

octane number.

U.S. experience (1) suggests that a small number of

existing cars may experience surging, hesitation, and/or

stalling with ethanol/petrol blends, due to a variety of causes:

- the leaning effect of the ethanol in the blend

(can be overcome by tuning the engine);

the effect of blends on some plastic fuel system

components, such as gaskets, pump diaphragms,

etc., (it is logical to expect that new cars

would include compatible materials);

the effect of dislodging of deposits in the fuel

system which may clog the fuel filter and/or

carburettor (this problem occurs specifically in

older cars, and even then only for the first 1-3

tankfuls of blended fuel).

These problems should disappear with time as use of

ethanol blends becomes more widespread, and the car fleet is

replaced with new cars manufactured to operate on

ethanol/petrol blends.

(1) "Gasohol - a Technical Memorandum", Congress of the United States, Office of Technology Assessment, Washington D.C., September, 1979.

22.

Octane Number

An important advantage of an ethanol/petrol blend is

that its octane number is higher than the original petrol to

which the ethanol was added. The exact increase in octane

number depends on the octane number and composition of the

petrol, and has not been measured under Australian conditions

where petrol is leaded and is made largely from Bass Strait

crude oil. In U.S.A. where ethanol is blended into unleaded

petrol the increase is 3-4 octane numbers.(1)

Raising the octane rating of motor fuels would enable

car manufacturers to increase the efficiency of car engines,

but this is unlikely to occur unless blends are available

throughout Australia. Alternatively, the octane rating of the

petrol component of the blend can be reduced to exactly

compensate for the octane boosting properties of the ethanol.

If this is done, there are potential energy savings at the

refinery of 0.6-1.0 MJ/1 of oil refined(1) (under U.S.

conditions). If these energy savings are attributed solely to

the ethanol, a saving of 0.27-0.45 1 of petrol can be achieved

for each litre of ethanol used. in Australia some reduction in

the lead content of blended petrol is another option.

Fuel Consumption

To a considerable extent fuel consumption depends on

the energy content of the fuel. The net calorific value of

ethanol and petrol are 21.2 and 32.6 MJ/1, respectively. On

mixing, 0.9 1 of petrol plus 0.1 1 of ethanol results in 1.002

1 of the blend. The combined effect of the lower calorific

value of ethanol and the volume expansion result in 3.7% less

energy per litre of blend, compared with straight petrol. If

all other factors were equal, this would result in 3.7%

increase in fuel consumption.

However, ethanol/petrol blends are claimed to have the

effect of "leaning" the fuel mixture (i.e. move the air-fuel

mixture to an effective value that contains less fuel and more

air) which increases the thermal efficiency (km/MJ) in most

motor vehicle engines. If this is so, the increase in fuel

consumption for blends would be less than the 3.7% predicted on

the basis of calorific value.

23.

Detailed comparisons of fuel consumption with

ethanol/petrol blends and conventional petrol have not been

carried out in Australia. Some comparisons have been carried

out in U.S.A., but the detailed results do not appear to have

been published. A recent authoritative U.S. report (1)

concluded that, based on laboratory and road test comparisons,

fuel consumption with blends would be no more than 4% higher

than and may be equal to straight petrol.

Vehicle Emissions

The effects of ethanol/petrol blends on vehicle

emissions are dependent on whether an engine is tuned to run

fuel rich or lean, and whether or not it has a carburettor with

a mixture feedback control.

On balance it appears that for conventional engines

ethanol/petrol blends will have little net effect on pollutant

emissions.

If no carburettor modifications are made, the use of

blends is expected to have the following effects on most of

today's cars (1)

increased evaporative emissions from fuel tanks

(although the new emissions are not particularly

reactive, and should not contribute significantly

to photochemical smog.)

decreased emissions of carbon monoxide (due to

"leaning" effect).

increased emissions of aldehydes (which are

reactive, and might aggravate smog problems).

Increased NOx emissions with decreased emissions

of exhaust hydrocarbons, or decreased NOx with

increased hydrocarbons (depending on the state of

engine tune).

24.

The effect of blends on exhaust emissions from cars

which are adjusted to maintain optimal air/fuel ratios will be

considerably less than the case where no carburettor

modifications are made.

In Australia, ethanol in blends may permit a reduction

in the lead content of the fuel, with consequent improvements

in lead emissions.

Straight Ethanol as a Fuel

Pure ethanol can be used as fuel in a spark ignition

engine. Its prime advantage is its high octane number,

allowing use of higher compression ratio engines to give

greater thermal efficiency. Also, water is completely miscible

in ethanol, so there is no concern about storage stability.

However it has a lower energy content per litre than petrol, so

a larger fuel tank would be required, and significant changes

would be required in the carburettion system.

Conventional diesel engines cannot be run directly on

pure ethanol because of its unsuitable ignition quality. it is

possible to modify the engine to be spark ignited. It is also

possible to modify the fuel ignition characteristics by adding

ignition enhancers, such as amyl nitrate or cyclohexanol

nitrate, although the amount required makes their use (2) uneconomical '

In summary, both the spark ignition and diesel engines

have been developed for use with conventional fuels. Straight

ethanol is not a suitable fuel for such engines and so has

little relevance for widescale use in existing vehicles in

Australia.

In the longer term, engines may be developed to run on

straight ethanol, and such engines may find limited application

in selected vehicle fleets, in the same way as some taxi fleets

now use LPG. The limited availability of ethanol in Australia

would prevent this use becoming widespread.

(2) "The Report of the Alcohol Fuels Policy Review". U.S. Department of Energy. June 1979.

25.

Ethanol/Diesel Blends

Ethanol/diesel blends are not stable, and emulsifiers

are necessary. Further development work is needed to give

satisfactory emulsions which remain stable, and do not damage

the engine. It is also possible to modify a diesel engine to

run on the two fuels using separate fuel systems. Diesel fuel

could be injected into the cylinders, and ethanol mixed with

air in a carburettor. Such an engine might run on 100% diesel

at low power, and 20% diesel/80% ethanol at peak power.

For any large-scale use of ethanol/diesel blends,

significant changes in the design of the fuel system would have

to be incorporated as an option in engine production. This

would require a significant time scale and, more importantly, a

significant demand for such vehicles. Such demand is likely

only if ethanol becomes a widely available fuel or if diesel

fuel becomes scarce.

26.

APPENDIX 3

ENERGY BALANCE CONSIDERATIONS FOR ETHANOL

PRODUCTION FROM SUGAR CANE

The manufacture of liquid fuel from crops provides a

means for conversion of solar energy to liquid fuels. However,

the production and processing of the crop requires inputs of

energy for the manufacture and operation of plant, equipment

and supplies used on farms and in the factory. Some of these

energy inputs are in the form of liquid fuels and some are in

the form of non-liquid fuels such as coal.

In evaluating a crop as a source of liquid fuel, it is

important to consider the overall energy balance for the

operation, in terms of both total energy and the energy content

of liquid fuels. The energy balance for liquid fuels is the

more relevant for Australia at the present time.

It should be noted that estimation of energy inputs to

agricultural operations and to the manufacture of plant and

equipment is subject to a number of assumptions about which

there is no universal agreement. The estimates of energy

balance made in this appendix should be regarded only as

indicative.

Basis of Method Used to Estimate Energy Balance

The analysis is based on growing, harvesting and

transport of sugar cane, as practised in Queensland. The

factory crushes cane for half the year, with half the juice

being fermented to ethanol, and the other half being

concentrated and stored. In the other half of the year the

concentrated juice is diluted and fermented to ethanol.

The principal energy inputs are "direct" fuel (mostly

diesel fuel and bagasse), fertilisers (which require energy in

manufacture), and "capital" energy of machinery. The energy

equivalents for fertilisers and diesel fuel include energy

required in their manufacture and delivery to the farm.

27.

The energy equivalent of electricity assumes 25% efficiency of

conversion from coal (1) . The "capital" energy cost of

machinery is taken as 300 MJ/kg (2) .

Quoted energy consumption data are divided between

liquid fuel, and non-liquid fuel. Energy inputs via

fertilisers have been considered as liquid fuel since

nitrogenous fertilisers require at present large volumes of

liquid fuel for their manufacture. Electricity inputs have

been considered as non-liquid fuel. "Capital" energy inputs

have been considered to be 31% liquid fuel and the balance

non-liquid fuel (2). This percentage is based on 1975-76, and

will be lower in the future, as coal and natural gas replace

fuel oil in manufacturing industry.

Energy Inputs and Outputs

Agricultural energy inputs for cane production have

been estimated by Austin et al (3) and are shown in Table

3.1. These data refer to sugar cane production in the

high-yielding Bundaberg and Burdekin areas of Queensland.

Corresponding agricultural output is 8.7 kl ethanol per hectare

per year.

The crop processing operation uses bagasse as its main

energy source, with coal as fuel during the period when the

distillery operates on concentrated cane juice, rather than

sugar cane as raw material. The quantities of fuel consumed by

the factory have been estimated on the basis of CSR experience

of sugar milling and ethanol production in Queensland.

(1) Leach, G. (1975) "Energy and Food Production". London: International Institute for Environment and Development.

(2) Stewart, G.A. et al (1979) "The potential for liquid fuels from agriculture and forestry in Australia" C.S.I.R.O. Chapter 4.

(3) Austin, R.B. et al (1978) "Gross energy yields and the support energy requirements for the production of sugar from beet and cane; a study of four production areas" J. agric. sci., Camb. SO., 667-675.

The overall and liquid fuel energy balance is shown in

Table 3.2 on a basis of 1 kilolitre of ethanol produced. This

balance is on an ex-factory basis. No allowance has been made

for energy required to ship the product to a market (which must

be done on a case by case basis, as there may be credits

through shipping a lower tonnage of petroleum products).

Direct Farm Qsa - Diesel - Capital

Fertiliser rjsed - M - P - K

Irrigation pumping

- Capital

Chemicals

Transport of Cane to Factory

- Fuel - Capital

TOTAL

Total Energy on pec '<! basis

Quantity

179 1/ha/crop

150 kg/ha 31 kg/ha

130 kg/ha

-

-16 km avge haul

Energy/unit

52 MJ/kg 300 MJ/kg

76 MJ/kg 32 MJ/kg ) 10 MJ/kg :

14.4 MJ/kwH 300 MJ/kg

-

Predominantly

GJ/ha/year

7

3 11

2

0

2 2

27

3.1

fuel

GJ/ha/year

6

-

4

-

6

19

2.2

Total

GJ/ha/year

9

11

3

a

2

' 46

5.3

TABLE 3.2

OVERALL ENERGY BALANCE

Agricultural energy input

Credit for bagasse

Set Input

Output

Ratio Output/Net input

* Includes 24.4 for bagasse - assumes all bagasse in

Predominantly Predominantly Total liquid Euel Non-liquid fuel Energy

GJ/kl GJ/kl GJ/kl

3.1 2.2 5.3

0.5 31.2 31.7* 3.4 1.0 1.4 1

4.0 34.4 38.4

24.4 24.4

4.0 10.0 14.0

23.5 - 23.5

5.9 - 1.7

cane is used in factory during crushing

AGRICULTURAL ENERGY INPUT(2) (3)

(per ha per year basis)

29.

Conclusion

The total liquid fuel used to produce 1 kilolitre of

ethanol amounts to 4.0 GJ/kl and the energy content of the

product is 23.5 GJ/kl. The liquid fuel energy ratio is thus

estimated to be in excess of 5:1.

The overall energy balance depends upon the manner in

which bagasse is treated in the analysis. If bagasse is

considered to be a fuel input the ratio of output to input is

0.6:1. However, if bagasse is considered as part of the crop

and not as a direct fuel input then the ratio of output to

input is 1.7:1.

Compared with other carbohydrate crops, sugar cane is

unique in producing, as part of the harvested crop delivered to

the factory, virtually all the fuel to operate the factory, at

least when cane is being crushed. Research into methods of

bagasse storage may permit operation with bagasse as fuel

outside the cane crushing season, and so further improve the

overall energy balance.

3 0 .

APPENDIX 4

PRESS STATEMENT. The Sugar Board, BRISBANE.

21st December, 1979.

FUEL ALCOHOL FROM SUGAR CANE.

(Statement by Mr. C.L. Harris, Chairman, The Sugar Board.)

The Chairman of the Sugar Board, Mr. C.L. Harris, announced

today that a Sugar Industry Consultative Committee had been formed to

study all aspects of alcohol production from sugar cane. This was in

response to increasing concern about liquid fuel supplies, which has

received special emphasis recently by State and Federal Governments.

Fuel alcohol from sugar cane has aroused considerable interest

in Australia and overseas, Mr. Harris said, because sugar cane is a

renewable resource and a very efficient producer of carbohydrate, which

can be readily converted to alcohol.

Almost all of the alochol now produced in Australia for

industrial purposes is made from molasses, a by-product of the sugar

industry. Alcohol/petrol blends, as a fuel for automobiles, have

been used from time to time in various parts of the world including

Australia. However, until the recent escalation of oil prices, its

use for this purpose has been relatively limited.

Following recent oil price increases, the Australian Sugar

Industry now had to take a view on the production of fuel alcohol from

sugar cane because of the implications for its traditional sugar

activities. Until recently, alcohol had not been regarded as an

alternate end product from sugar cane.

The Committee, to be chaired by the Chairman of the Sugar Board,

comprised the Presidents and Secretaries of the Australian Sugar

Producers Association, the Queensland cane Growers' Council, the

Proprietary Sugar Millers' Association, the New South Wales Cane Growers'

Association, the President of the New South Wales Sugar Milling

Co-operative and CSR Limited, which is the sugar marketing agent for

the Queensland Government. The Committee is thus fully representative

of the Australian sugar industry.

The Committee will consider, as a matter of priority, and from

an overall industry point of view, possible organisation structures which

would enable alcohol and sugar to be produced in the most effective and

compatible manner. However, it should be clearly understood that the

Committee will have an investigatory role only and will report its

findings to the industry.

Mr. Harris added that State and Federal Governments would

be fully informed of the findings of the Committee-