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Holden goes it alone on E85

Field of dreams: Australia’s major petrol companies have no plans to offer E85 in the short term, putting GM Holden's ethanol plans in doubt.

No support from Big Oil for Holden’s E85 plan, as fuel retailers stall on ethanol

29 Jul 2008

AUSTRALIA’S major petrol retailers have no plans to offer E85 fuel in the foreseeable future, despite GM Holden’s recent declaration that it will produce an ethanol-compatible Commodore as soon as 2010.

BP, Mobil and Shell this week told GoAuto that they have no plans to offer E85 – a blend of 85 per cent ethanol and 15 per cent petrol – at any of their service stations in Australia.

Their resources appear to be totally dedicated to the expensive roll-out of E10 nationally, starting with New South Wales (where it is legislated) and Queensland (where most of the ethanol is produced).

Supply of sufficient ethanol is also a source of concern because producers are already running at capacity to meet the growing demand for E10.

And there are long-term concerns for the growth in ethanol demand because, while the current relatively low level means that it can be produced from agricultural by-products, an increase in demand could force producers to use food crops.

BP Australia spokesman Chandran Vigneswaren said that the company had a meeting with Holden but it was merely an opportunity for the car-maker to tell them what its plans were and “not necessarily requiring any feedback as to what we might do tomorrow”.

“At this stage we don’t have any plans to go forward in terms of rolling out E85 at any of our service stations,” said Mr Vigneswaren.

“But obviously the GM announcement is relatively new, so what we are doing and will continue to do is monitor the market in terms of new vehicles coming online. As that changes and there’s greater market penetration then that’s something we may consider.

“When you roll out a fuel, there’s a lot of work required in terms of changing infrastructure. Rolling out E10 has been a long and involved and expensive process, but something that we support.

“Certainly at this stage we’ve got no plans to introduce E85, but we’re interested in it, we’ll follow it very closely, we’ll continue discussing it with manufacturers and, if there’s strong market take-up and there’s a demand for the product, you’d have to say: why wouldn’t the majors bring it on? If there’s a market, you’re going to make money out of it.

“I think we should be encouraged by (the Holden move), though, and not bagging it. It’s one car manufacturer bringing on something like this that forces the industry to change.

“From BP’s perspective, we certainly believe in biofuels. We think ethanol-blended fuel is important, but we also believe that in the longer term and in the transition to cleaner fuels and alternative fuels, it’s really the next generation of biofuels that we think will be more effective and will play a greater role.

“We’re investing millions of dollars investigating fuels of that kind and, while ethanol’s got an important role to play now, there are limitations.” Mobil Australia spokesman Alan Bailey said the company was some way off being able to create the necessary production and distribution infrastructure required for E85.

“We don’t have a plan in place for E85 at this point,” said Mr Bailey.

“One of the issues is getting enough ethanol to roll out a reasonable access for E85. We’re stretched with supplying enough to meet current market plans for the industry as a whole, which are based on E10.

“E85 is not on the agenda at this point. Our focus is really on E10 and getting that out into the market where it’s attractive for us to do so or, in the case of New South Wales, where it’s a mandated requirement.

“It’s a matter of getting enough (E85) vehicles on the market to justify making that grade available, and that takes time. If you’re going to dedicate part of your retail and supply infrastructure to a particular grade, you have to have a reasonable market for it. It’s not something that would happen in a hurry.” Claire Wilkinson from Shell Australia said that “E85 is not on our radar at this point”.

“Shell has no plans to introduce E85 at this time,” said Ms Wilkinson in a statement. “We are currently focused on increasing supply of E10 to our retailers given there is growing demand for this fuel.” Caltex was unable to respond to GoAuto’s questions on its E85 plans before it closed for publication.

80 center image Left: Holden E85 Coupe60 Concept.

While ethanol is widely regarded as one of the best alternative fuels available, the “food versus fuel” debate continues to rage globally, with ethanol critics saying that the growing demand for it as a fuel has resulted in a food supply crisis as well as inflated prices, putting further pressure on poor countries.

Data published by the Australian Bureau of Agricultural and Resource Economics shows that the global price of sugar closely follows the price of oil and that feedstocks are similarly affected.

However, the former head of the CSIRO’s low emission transport research department, David Lamb, has told GoAuto that ethanol made from sugar cane is an excellent alternative fuel, both economically and environmentally, and has the potential to replace up to 10 per cent of Australia’s dependence on oil.

Mr Lamb supported the development of ethanol made from sugar cane – as it is in Brazil, where it has largely replaced petrol – because it is environmentally advantageous from a whole-of-life perspective and would be good for Australia “if done properly”.

He said Australia has the capability of extending its sugar plantations, but that it requires a government mandate so that there is a long-term policy and security. He does not believe it will work if left to market forces.

GM Holden managing director Mark Reuss said two weeks ago that an E85-compatible Commodore could be produced locally “in the next two years”, while accepting that fuel supply will not be readily available.

Availability will almost certainly be in the hands of a small number of independent distributors for a number of years unless there is a large demand for the more environmentally friendly ethanol-based fuel.

It is a classic chicken-and-egg scenario, but General Motors believes that the environmental benefits of E85 are such that it warrants the cost of local introduction.

“The benefits of ethanol are huge,” said Mr Reuss at the recent launch of a CSIRO study into future fuels. “It is a comparatively clean-burning renewable fuel and it requires a very small cost to modify existing technology.

“I think it is our responsibility as an auto industry and as a company to lead this. If we wait until we have $8 a litre gasoline and we wait until bad things happen to respond, that is a pretty poor place to be. We owe the society, the economy and our customers a lot more than that as an industry and a company.” Mr Lamb, who retired from the CSIRO only last month and who worked for Ford Australia in the 1980s, said it was essential for Australia to break its dependence on fossil fuel and welcomed Holden’s move towards ethanol – with a reservation.

“As I understand it, it costs precious little – something like less than $100 – to make a car so that it can accept a high percentage of ethanol in the fuel,” said Mr Lamb.

“That’s a great thing. Anything that increases the acceptability of alternatives has got to be a good thing, so I say ‘good on’ Holden.

“However, if you’re going to tell me that (they are doing) a V8 E85 engine and it is going to do something good for the environment, I will say bollocks.”

E85 on tap in Adelaide:

FOLLOWING on from comments that United Petroleum’s E85 fuel pump at Rozelle in Sydney is the only consumer outlet in Australia, GoAuto has learnt of two more located in Adelaide.

Saab BioPower model owners can now fill their cars with E85 fuel for $1.36 per litre at independent service stations in Mawson Lakes and Park Holme in Adelaide.

However, while Saab has promoted the United Petroleum initiative, it appears to have snubbed the South Australia-based company, Australian Farmers Fuel Pty Ltd (trading as Enffue, which stands for environment friendly fuel), which also trades in other states of Australia.

Enffue managing director Andy Fischer told us that he has met with Saab Australia director Parveen Batish to discuss Saab’s promotion of its industry-first E85 offering.

“He knows about what we’re doing, but we’ve probably embarrassed them a bit by dealing with GMH through the back door here in Adelaide,” said Mr Fischer, who is hoping to market E85 adaptor kits for other cars.

Mr Fischer said that Enffue intends to add more E85 sites “and we’re seriously considering dropping PULP – premium unleaded – and putting more E85 bowsers out if there’s demand for it”.

Read more:

Councils stall E85 - United

Ethanol-powered Commodore on the way

Doubt emerges over hybrid Commodore

Saab boosts bio-ethanol range

Holden Commodore hybrid and diesel are go

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