KEY POINTS:
New Zealand's focus on ethanol production as a replacement for fossil fuels could be misplaced, visiting US experts say.
Within 15 years, the biofuel of choice would not be ethanol-based, Professor Basil Nikolau of the Iowa State University said at a biotech conference in Auckland yesterday.
Nikolau, who specialises in biochemistry, biophysics and molecular biology, said biodiesel, made from oils, was more like petroleum than ethanol.
And problems in the production and transportation of ethanol created extra costs, he said.
Ethanol could be diluted in water, and so could not be transported through pipelines.
And producing the biofuel used more energy than it created.
Jeff Stroburg, chief executive of Renewable Energy Group, said demand for biodiesel in the US had grown from 94 million litres in 2004 to nearly 760 million litres last year.
He predicted that by 2010, demand would reach have reached 3.8 billion litres, far more than the demand for ethanol or petroleum-based diesel.
But Jim Watson, founder of Genesis Research, which is conducting a large ethanol experiment in Taupo through its subsidiary BioJoule, said the American view was "biased".
Corn was a lucrative crop grown in the US for home consumption and export and there was competition for the land needed to grow corn either as a food or to produce ethanol.
People were not keen to see land used for growing food taken over to grow crops for biofuels.
For that reason, BioJoule focused on producing cellulosic ethanol produced from woody material that could be grown on "marginal" land.
To replace diesel supply with biodiesel required quality land.
"If New Zealand did this we'd have the same problem as the US - using high-quality land might mean replacing a food crop," Watson said.
The world needed biodiesel and ethanol produced from a range of sources, Watson said.
In February the Government said that from next year it would force oil companies to meet a biofuels quota of 0.53 per cent of total fuel sales, rising to 3.4 per cent by 2012.
Genesis Research offshoot Biojoule is seeking $5 million for a trial plant that will produce ethanol from shrubby willows it is growing near Taupo.
Local researcher Scion and state-owned AgResearch have teamed up with San Diego company Diversa to study how to use enzymes to convert wood into sugars that can be fermented and refined into ethanol.
Genesis, Scion and Diversa have said the forestry industry could provide ethanol for the three billion litres of petrol New Zealand uses each year.
BIODIESEL DEMAND
2004: 95 million litres
2005: 285 million litres
2006: 760 million litres
2010: 3.8 billion litres
Source: Renewable Energy Group
