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Outbreak at Watersedge A Public Health The cost of fuel to power their mulching and revegetation businesses drove Peter O’Donnell and his partners to create their own supply of biodiesel from canola grown on Peter’s Madowla Park property near Echuca, Victoria. Grinding waste wood to make mulch, transporting it to revegetation sites around Victoria, and doing the earthworks associated with major landscaping projects are fuel-intensive activities. It’s what drove Peter O’Donnell and his partners, owners of mulch and landscaping companies Mossrock Australia and Ecodynamics, to join experienced cattle industry operators to form Ecofuels Australia. Peter O’Donnell: “We try and supply everything that goes in and we try to use everything that comes out. So we grow the crop, we process the crop, we make the fuel, we use the fuel and we use the by-products.” In October 2013, Mossrock took its first delivery of Madowla Park biodiesel. Within 6 weeks it had substituted 15% of its diesel usage with biodiesel. “The Ecofuels plan initially is to supply the needs of Mossrock, the farm and the biodiesel plant”, explains Peter O’Donnell. “Once they are running on at least 75–80% biodiesel, any surplus capacity will be offered to other large-scale, rural operations.” The high protein canola meal, a residue of the oilseed crushing process, is mixed and pelletised at the plant and fed to the thousands of dairy heifers agisted at Ecofuel’s two AQIS-certified, pre-export quarantine stations before they are shipped to China. Other by-products, mainly soap-contaminated wash water and glycerol, will be used to generate power and create fertiliser. Peter expects to generate more than enough power to run the entire biodiesel plant. Peter’s philosophy is clear: “We try and supply everything that goes in and we try to use everything that comes out. So we grow the crop, we process the crop, we make the fuel, we use the fuel and we use the by-products.” This ‘closed-loop’ approach, Peter believes, lends itself well to a large-scale farming operation. “People could set aside a portion of their land to grow an oilseed crop. For example, they could grow enough fuel for that property, and perhaps the neighbouring properties. We always saw the scale of what we were doing as appropriate for a rural or regional operation.” The Madowla Park biodiesel operation can grind about 4000 tonnes of oilseed a year, with an expected yield of 1200–1400 tonnes of oil which will produce about 1,500,000 litres of biodiesel. The balance of the oilseed (about two thirds) ends up as meal. “We can send the meal out without further processing for people to mix into blended rations themselves or we have the capacity to pelletise it”, says Peter. “If we were to mix that meal with cereals, we would end up with about 12,000–14,000 tonnes of blended pellets.” Off the shelf, the processor that converts the canola oil to raw biodiesel is designed to produce 1,000,000 litres a year, or 3000 litres a day. Ecofuels has doubled its capacity by modifying the control software and adding more raw fuel treatment tanks. “We can probably increase capacity by the same factor again, up to 3 million litres, if we really tweak it so that we are maximising the utilisation of the reaction tank. That’s the limiting factor currently on fuel production.” Storage of biodiesel is a subject that people need to research, says Peter. “Microbial growth and oxidation of fuel over time need to be understood or you can do some damage to fuel systems. “The steps needed are not complicated or expensive but they are important and will vary from site to site. Feedstock, temperature and types of storage containers are all relevant. “Standard diesel additives can be used and early blending with standard diesel can help to address oxidation problems.” Peter has enough canola meal storage for 2 days worth of grinding. “As with the oil storage, we have tried to introduce buffer capacities. So if the oil side of the process stops, we can keep going with the meal, and vice versa.” The meal needs to be stored dry or mould can be an issue, so he monitors the moisture content. The local stockfeed people are helping us in terms of quality control and keeping the whole thing safe. We are feeding this to cattle that are worth a lot of money, and we don’t want to see any of them falling over with it. “People should also be aware that mice love this stuff”, he adds. The canola meal, or ‘cake’, that comes out of the grinder is a high quality, high protein stock feed. The rest is combined with other materials in a mixer wagon to make a total ration. “The canola meal as is can’t be fed directly to stock in volume because of the very high protein content”, says Peter. “We can make up blends with cereals, straw, trace elements or whatever recipes the nutritionists come up with.” From the mixer wagon, the mix is fed into the pelletiser. “The protein content of the pellets depends on the stock you are feeding. We are producing pellets with a protein content of about 16%, while the canola meal itself is 30%–35%. That’s the initial reason to pelletise.” Peter has found that pelletising the meal is also a convenient way of handling it. “It’s not dusty, and with cattle there can be eye problems with dust.” Pelletising is an important part of the economics of the whole process, he believes: “It adds value to the meal. For a lot of people, the economics of the biodiesel operation revolves more around the economics of the meal. The fuel has a pretty clear and consistent market but the meal price fluctuates a lot. So if you can’t get a good return on the meal, then the economics start to look shaky.” The pelletiser was made in Griffith by Palmer Milling Engineers and the electrics and control system were done locally. Peter could have saved money by importing a machine from China but was keen to have the back-up of a locally made product. To maximise the value of the canola meal produced from the biodiesel operations, Ecofuels began dairy-heifer backgrounding operations at two locations: Kalumunda, the western-most block on Madowla Park; and south of Deniliquin. Both sites now include AQIS-registered pre-export quarantine facilities. “We take in dairy heifers destined for China and we put them in quarantine for 30 days before they go onto the boats”, explains Peter. “We use the pellets produced from our biodiesel operation to supplement the pasture grazing for those animals while they are in quarantine.” The quarantine operation uses most of the meal produced and there are nearby outlets for the excess. “We are close to the dairy areas around Shepparton and Tatura so there is a ready market for the meal that we produce. And we are working in with the local stockfeed producers who are interested in our pelletised canola meal.” Ecofuels has designed a digester system that can use the waste water, glycerine and any surplus meal to generate power. “The soap-contaminated wash water and other waste streams from the property will feed into a digester system which, on current calculations, will give us enough power to run the whole plant, so we can go off grid at that stage”, says Peter. “That’s what we are aiming for.” From the digester, Ecofuels expects to get power, clean water and fertiliser by-products that can be used on the property. The digester is awaiting approval and permits, and is expected to be operational early in 2014. “Digesters on the market are enormously expensive for a small-scale operation. So we have had to look at the components and put something together that works for our operation. We think that what we have developed may have a place in the wider market as well, where effluent, waste and power prices are increasingly an issue.” The digester produces a burnable gas, which can be used to generate heat or steam, or which can be burnt directly in an engine that will drive a generator. “Our intention is to put it into a generating system and generate power through it. We have units that are going to run 24 hours a day so, if we can produce power 24 hours a day, it all fits together quite well.” Excess power could be fed back into the grid but Peter has chosen not to do so. “We use enough power on this property to say, well, let’s be sensible about using it ourselves and scale accordingly.” Ecofuels is exploring cotton seed as an opportunistic alternative to canola. “If the canola market gets to 0–0/tonne, as it has done previously, that is more than we can afford to pay and still produce fuel at a competitive price. “Obviously for us it is not a total disaster if the price gets up because we can cover part of our requirements with what we are growing. But the cotton seed can be at a lower price.” The price of cotton seed can vary enormously. “It might be 5/tonne some years and 0/tonne in other years. In years where it is cheap it may be an option for us.” At Picola, 20 km from the Madowla Park facility, Peter has 600 tonne of cotton seed stored in an ex-Graincorp silo facility. “Cotton seed has its own problems because it’s covered with lint and we have had to work out ways to take the lint off. Then we will put delinted seed through our grinder and see what sort of results we get.” From the trials done so far, Peter reckons he’ll get about 12% oil from the cotton seed, compared with the 30%–35% he gets from canola. He’s happy to continue trials with that yield because the cotton seed can be cheaper and the meal still has a significant value as a stock feed. He also plans to look at other oilseeds as long as they are available in the right volume. “The whole idea of what we are doing is that we don’t want to be carting stuff all over the country. And you can’t afford to anyway—the margins are not there to have a lot of transport built into the system. “If you can source your raw material from within a sensible catchment, say 50–100 km, then that’s fine. If you have to go further than that for material, you go and build another plant.” The machinery and the design and development of Ecofuel’s 15 m x 25 m shed represents nearly million of investment. That includes the grinder, filter, processor, pelletiser, mixer wagon tanks and, Peter adds, “a lot of time”. The company expect to produce 1.5–2 million litres of fuel and 3000–4000 tonne of meal a year. On that basis, this operation has a payback period of 3–4 years. Peter cautions others to choose their processor carefully. “The equivalent Ageratec unit to the one we are using has gone up in price by nearly 0,000 [AUD]. We are looking at that situation at the moment.” People need to be aware of the excise requirements for biodiesel, says Peter. That then gives you the opportunity to apply for various grant schemes, so it is worthwhile.” Biodiesel qualifies for payment under the Cleaner Fuels Grant Scheme as long as it meets the appropriate standard, he says, though B20 and weaker blends are treated as standard diesel with respect to the diesel fuel rebate. “Excise and licensing requirements for biodiesel are explained vey clearly through the ATO website—what you need to do and what licences you have to have. People think that if they are producing fuel just for their own consumption then they are outside the system. “There are a series of quality levels based on the European standard that locally produced biodiesel has to meet. So there are quite extensive requirements that you have to satisfy in terms of the record keeping and testing, and you can be audited at any time. “But if the fuel you produce meets the relevant standards, and you are registered, then you can claim back the full value of the fuel excise. “The requirements are well explained on the various websites. The applications for registration are straightforward. And I would have to say that the departments that I dealt with were really helpful, and it was a pretty painless operation.” With an extensive network of three-phase power on the property, Ecofuels didn’t have to pay a lot to upgrade the power supply to the shed. But for people who don’t have access to the three-phase network, or are isolated from it, it may be a real issue, Peter says. “Before we got the power hooked on, we ran from a generator. It worked, but it was a bit underpowered, and had its moments. “We have a 200 k W power supply to the shed now and we are sitting pretty close to the limit of what that can supply to the machinery that we have got here. If we started everything up at once, we probably couldn’t do much more than what we are doing. So power is something that people need to be aware of.” Safety is a concern with biodiesel manufacture, principally because you are using methanol in the process. “Methanol is a highly volatile liquid with a very low flash point”, says Peter. “And you don’t want to come into contact with it through your skin or eyes. You need to be sensible about it.” Ecofuels has had inspections done by Energy Safe Victoria who made a series of recommendations. They have also developed full safety manuals for the site and have had extensive discussions with the Country Fire Authority and the local council. “Careful consideration of safety issues is important”, says Peter, “as accidents have the potential to be very serious.” As with other fuel facilities, provision has to be made to contain spills. Regulations around bunding requirements are clear, he says, and need to be incorporated into the shed design. Spills at Madowla are captured in a separate drainage system that leads to an isolated storage. For more on safety with biodiesel, Peter recommends starting with Biodiesel Safety and Best Management Practices for Small-Scale Noncommercial Use and Production, published by Penn State University. During construction, more than 25 local contractors worked on the Madowla Park site. Now operational, the biodiesel facility alone employs at least 5 people. The whole operation will soon employ 15–20 people, Peter says. “We are growing the crop; the meal side of things is going to employ a number of people; we are pushing significant numbers of cattle through with the meal we produce; and we will have trucks running virtually full-time collecting raw material and delivering product.” Depending on the results from Madowla Park, Ecofuels plans to build more plants in partnership with large rural biofuel users, providing increasing numbers of long-term jobs in rural areas. Peter credits Deane Belfield, who runs environmental consultancy Eco2Sys, with the original concept for the biodiesel plant. “Deane’s idea was to have a plant that was owned by the end users of the fuel”, explains Peter. “We went a couple of steps beyond that and became the crop growers, the users of the meal and the users of the other by-products. “Deane was also of enormous help to us in negotiating a way through the array of regulations, requirements and departments that was initially confusing, and in putting together the subsequent planning and funding applications. “The Victorian Government has made a substantial contribution through its regional development initiative, which has allowed us to move far more quickly and far further than would otherwise have been the case. We have got, and continue to get, a lot of assistance from Ian Guss at Regional Development Victoria. “Steven Hobbs at BE Bioenergy in Kaniva has been involved in biofuel manufacture for a long time now and has really detailed, practical and technical knowledge. His company Yarrock Oils produces fuels from a range of seeds and he has done extensive research into the viability of Indian mustard as a dryland oilseed crop in northern Victoria. I’m on the phone to Steven regularly, both in his commercial guise as the local agent for Keller Presses, but far more often for his help and industry knowledge—and he’s very generous with both. Some of the information from the American universities is extensive and detailed. “Getting started is not totally straightforward, but it’s not that difficult either”, says Peter. “We have certainly run into some roadblocks along the way, and I would hope that the next plant that we build will be easier because of the knowledge that we have gained. 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