Assessing the viability of growing Agave Tequilana for biofuel production in Australia

Governments around the world have been introducing policies to support the use of biofuels since the 1990s due to its positive influence in climate change mitigation, air quality, fuel supply security and poverty reduction through rural and regional iindustry growth. In Australia, liquid fuel is in high demand and this demand is increasing every year. To meet the current fuel demand and to address climate change impacts, it is important for Australia to invest in green and clean energy. Biofuels are one of the options for clean and green energy that could help to reduce the demand for fossil fuels. Not only developed countries but also developing countries are interested in reducing dependence on imported fossil fuel and promoting economic development, poverty reductions and improving access to commercial energy through biofuel policies. However, the major challenge for the biofuel industry is to find the right feedstock that does not compete with human feedstock and can grow in marginal land. One of such feedstock that is studied in this research is Agave tequilana.

Overcoming many of the constraints to establish Agave tequilana as a potential feedstock in Australia requires an understanding of the complex technical, economical and systemic challenges associated with farming, processing and extracting ethanol. The aim of this research is to study the viability of growing Agave tequilana as a potential biofuel feedstock in Australia. The study also explores and highlights the economics of growing this crop, with the idea of comparing the costs and benefits of growing Agave tequilana with that of sugarcane. Agave tequilana has been selected for this study because of the existence of a trial site at Ayr, Queensland and because of a similar climate and rainfall pattern to that of the western central highlands of Mexico where Agave is traditionally grown for the production of tequila. In this study, the viability of growing Agave tequilana for producing ethanol in Ayr, Queensland has been assessed using a case study approach and financial cost and Green House Gas (GHG) saving have been estimated using life cycle cost analysis. Likewise, Agave tequilana and sugarcane agronomic practices have been compared and ibofuel policies have been highlighted using secondary sources to support the establishment of non-food crops such as Agave tequilana in Australia and elsewhere.

Ayr, Queensland is predominantly a sugarcane growing area where sugarcane farmers occupy 88% of the total agricultural land available. The remaining 12% has been set aside for other crops and cattle grazing or alternatively, some land may remain unused. In this study, farmers expressed that there is very limited land in Ayr available for Agave tequilana to be commercially viable until the sugarcane growing land or cattle grazing land is converted into Agave fields. However, it appears that both farmers and stakeholders are ready to accept Agave tequilana as a potential biofuel crop, if it is to be established on marginal lands in the sugarcane belt of Queensland, rather than in the Burdekin region which is predominately a sugarcane growing area.

The study also found that only 33% respondents were acquainted with this crop, and that a smaller group were aware of the potential of the crop to produce biofuel. Farmers indicated they would wait until the first trial outcomes are finalised and more research and development is undertaken on this crop before deciding to invest. Since this crop takes at least five years to provide a financial return compared to existing crops in the region, most of the respondents expect higher returns of 20-25% at the end of harvesting time and would prefer interim payment. Farmers may also require initial assistance from the government such as subsidised farm machinery, subsidised fuel and interest free loans before deciding to invest. Life cycle stages of Agave tequilana have been derived taking sugarcane as a base crop. At the first trial site, more than 65% of the cost of farming Agave tequilana in Australia occurred in the first year of plantation, and allowed the conclusion that existing tools and machineries are able to be modified and used in farming Agave tequilana in Australia. The tequila

industry provides a model for biofuel production from Agave tequilana. In Australia, the cost of producing ethanol from Agave tequilana is estimated to be around A$0.52 per litre, excluding government subsidies. The total cost of constructing ethanol pl nt capacity of 90

ML/Year in Australia at present is estimated at A$113.5 million.

The level of support provided to the biofuel industry by the Australian government is relatively less significant compared to other advanced countries such as USA and EU. However, the support provided by both the federal and state level programs has provided significant amounts of support to the biofuel industry in Australia. In future, if Agave tequilana is to be selected as a potential non-food crop biofuel feedstock, the government and the private sector need to explore the financial opportunities in marginal and semi marginal regions of Australia for supplementing the viability of producing ethanol with new technology. It is also necessary to explore the business case to modify the existing sugar processing mills to produce ethanol from Agave tequilana from its juice and bagasse.