Holden announces ethanol consortium

Holden, the Victorian government and Coskata have been joined by Caltex, Veolia Environmental Services and Mitsui in a consortium to investigate an ethanol production plant in the southern state. It's not just any old ethanol production plant either, but one that will recycle waste products to distill more than 200 million litres of the volatile substance for blending with petrol in E85 'flex fuel'.

Coskata was out here about a year ago canvassing prospective investors in a local plant employing the company's 'second generation' ethanol production technology. At the time, according to Coskata and its automotive partner Holden, the Victorian government showed strong interest in being involved and actively introduced Coskata's representative, Wes Bolsen, to a number of potential investors in the scheme.

So the news from Holden today, that a consortium has been formed and the Victorian government is involved, is less surprising than that 'Big Oil' stalwart, Caltex is one of the other participants -- although companies such as Caltex and BP are reinventing themselves  in the 21st Century as energy providers, rather than oil suppliers.

Coskata has a strong tie to GM in the US, so Holden's local involvement was a given. The local manufacturer is committed to building cars that will run on the E85 blended fuel in the near future. In fact, Holden's Energy and Environment Director, Richard Marshall announced in the company's press release today that locally-built E85-capable cars would hit the road before the end of this year.

"Our vision is that this technology will, in time, cut Australia’s dependence on petrol by up to 30 per cent and make a major contribution to sustainable motoring and greenhouse gas reduction," Marshall said.

"We've always said we'd take a leadership position on biofuels, and provide the vehicles to do that. We're committed to having locally built Holden cars capable of running on E85 in the market by 2010. It's about designing and engineering vehicles for Australians, built by Australians, using Australian fuel alternatives."

Much of the biofuel technology has already been developed by GM divisions in the US and it's relatively cheap and easily implemented in a production setting. The principal advantage to using E85 to burn in internal combustion engines is that it's almost carbon-neutral and the Coskata method offers further environmental gains by producing the ethanol from waste products, not food crops as the first-generation production methods do.

Marshall has previously told the Carsales Network that the 15 per cent petrol content in E85 ensures easy cold-weather starting, but in a milder climate such as Australia, it's conceivable that cars could run on 100 per cent ethanol, making the country largely self-reliant for the fuel to power its petrol-engined road transport.

While ethanol in cars has zero profile in Australia currently, GM alone has built 3.5 million vehicles that will run on E85 in the US. Ford and Chrysler are also marketing flex-fuel cars in America.

Caltex's involvement in the consortium is to ensure that these cars (and other E85-capable vehicles already on the road) will be resupplied with the petrol/ethanol mix through up to 30 retail outlets in metropolitan and regional areas. The plan from there, according to Caltex Australia's General Manager Marketing, Andy Walz, is for the initial 30 outlets to expand to 100 within 12 months of commencing operations.

"Caltex's expansion into this new fuel and participation in the consortium is part of our ongoing commitment to biofuels and tackling climate change, which fits well with a strategy of providing energy beyond the traditional fuel mix," Walz said in the joint press release.

"Caltex already has about 400 service stations that sell E10 and a growing biodiesel market. We believe the biofuels industry has a vital role in a sustainable transport fuels future and that biofuels are good business opportunity for Caltex."

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