Bio-fuel company seeks $5m for pilot refinery

A home-grown biofuel is now a step closer to commercial production.

Technology company BioJoule is to plant a 6ha commercial nursery for its fuel crop salix following a two-year trial of seven species of the cane willow at sites around Lake Taupo.

BioJoule head Dr Jim Watson, founder scientist of Genesis Research, said the company had selected the best variety to be propagated in the nursery in the Taupo area.

Mass plantings will start in 2009, and Watson expects fuel from harvested salix to become commercially available from 2011.

The company, a spinoff from Genesis Research, is seeking $5 million in private investment for a pilot refinery.

The project is believed to be the first attempt in Australasia to grow the crop for biofuel.

The company has also developed patented processes to extract xylose, a non-diabetic sweetener, and lignin, a substitute for petrochemicals in the manufacture of plastics, resins and glues - two byproducts that make the crop even more lucrative.

BioJoule's partner in the venture is the Lake Taupo Development Company, a ratepayer-funded economic development agency.

Government should foster the young industry as it did the electricity industry in the 1920s and 1930s.

"There doesn't seem to be a real commitment on the part of the Government that we're serious about renewable fuels," said Dr Watson, who also chairs the Royal Society of New Zealand's Energy Panel.

The country consumes 6.3 billion litres of petrol and diesel annually, at a cost of $4.5 billion - nearly a third of its annual current account deficit.

The Government's proposed target of having renewable fuels comprise 0.25 per cent of total combined annual petrol and diesel sales in 2008, rising to 2.25 per cent by 2011, should be raised., he said.

"We're going to have to fund the beginnings of this industry from our own pockets. This is going to benefit the country hugely but we're somewhat timid in taking the first steps."