Ethanol in the Transport Fuel Market

Dr John Tilley, Executive Director of the Australian Institute of Petroleum, told the 2005 International Ethanol Conference in Brisbane today that AIP members see a role for ethanol as a fuel extender, replacing some fuel imports and helping to meet the growth in overall fuel demand, as well as a potential role for ethanol as one of the options to meet the rapidly growing demand for higher octane fuels.

The speech, "Ethanol in the Transport Fuel Market" outlined a range of factors expected to influence the rate of growth in demand for transport fuels and hence the potential demand for ethanol blend fuels, including

• Changing national and regional demand patterns for liquid fuels
• Changes in engine technologies and vehicle fuel preferences, including lower sulfur diesel and 95 octane petrol
• Community and government expectations for improved urban air quality
• Changes in Australian refinery capacity, and investment in upgraded facilities to producer cleaner fuels
• Changes in the price and availability of domestic and imported crude oil
• Changing international refining capacity and demand for liquid fuels in other countries.

In discussing the role for ethanol in the transport fuels market, Dr Tilley said "each fuel must establish itself in the market by being

• Cost competitive
• Readily available on a reliable basis
• Of consistent high quality and compliant with fuel standards, and
• Acceptable to the customer."

While indicating that AIP member companies believe ethanol blend fuels can meet these requirements, he emphasised that the "key challenge at the moment for ethanol blend fuels is establishing customer demand."

Dr Tilley outlined the results of several market surveys into customer attitudes towards ethanol blend fuels. He called on all stakeholders to work together on more sophisticated communications strategies aimed at each customer segment of the fuels market. He also called on governments to look more closely at strengthening their role in consumer education and their support for promotional activities at this initial stage of industry development.

AIP and its member companies will continue to play their part to assist the development of the biofuels industry.

Media Contact:      

Dr John Tilley
Executive Director, AIP
(02) 6247 3044