Ethanol is an alcohol, produced from various sugars through fermentation and distillation. The process is similar to brewing beer where starch crops are converted into sugars and then into alcohol. Australia's ethanol is currently produced from wheat, sorghum and C grade molasses. Although it is possible to produce ethanol from biomass and urban waste, they are yet to be fully commercialised.
Ethanol is typically used as a fuel extender and to increase octane levels in petrol. In Australia, ethanol is most commonly sold as E10, a blend of 10 per cent ethanol and 90 per cent petrol. There are currently three ethanol production plants in Australia: Manildra (Nowra, New South Wales); Sucrogen (Sarina, Queensland); and the Dalby Biorefinery (Dalby, Queensland)
Under certain circumstances, ethanol can achieve environmental benefits. The use of E10 in place of unblended petrol reduces the emissions of certain pollutants from the vehicle exhaust. Ethanol as a transport fuel may also realise a greenhouse benefit when it is produced from a waste product (for example, C-grade molasses) or the energy source used in its production is relatively clean (for example, co-generation).
The use of ethanol as an alternative transport fuel has grown considerably as a result of growing consumer confidence in the use of the fuel, production and other grants to encourage uptake of ethanol. The implementation of the New South Wales government biofuel mandate has also increased demand.
The Ethanol Production Grants Program is an eligibility-based entitlement program and its objective is to encourage the use of biofuels in transport in Australia. Further information on the Ethanol Production Grants Program is available on the EPG webpage.