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Positive news this week from the Nelson-based algae company Aquaflow whose fortunes we have followed on Hot Topic over the past three years. I last reported on them in August 2011, when they had signed an agreement for joint testing and evaluation with Texas-based CRI Catalyst Company (CRI). Now they have announced a full technology cooperation agreement with that company which they believe leaves them poised to make refining next generation biofuels a commercial reality in New Zealand and in overseas projects within the two to three years it takes to build a refinery.

That’s big news if it comes to fruition. Director Nick Gerritsen says: ’We should be able to produce renewable hydrocarbon fuel that is equivalent to fossil fuel at a cost that is highly competitive with the current per barrel price of crude oil.’ He adds that New Zealand could turn its biomass into enough carbon-neutral biofuel to meet its renewable fuels requirement within ten years.

The IH2 technology which will be used is usefully reported on the Green Car Congress  website and on the website of the Gas Technology Institute which invented the process. CRI has the global sublicensing rights to the technology. Gerritsen describes it as world-leading. ’This is a robust and highly integrated technology package which can leapfrog other biomass to biofuel technologies because it goes straight to blended fuel stock and avoids intermediate pathways.’ The process he regards as among the most economical for renewable hydrocarbon fuel production.

Aquaflow was initially focused on biomass conversion and started with algae as a feedstock for fuel. Its baseline now is multi-biomass conversion in which algae can be used wherever it is available as a feedstock. The inclusion of algae in a multi-biomass mix produces a long tail benefit in terms of achieving higher yields of diesel and jet fuel. Other feed stock can include wood waste, agricultural waste such as vine prunings, invasive weeds like gorse or broom and solid waste.

Importantly the process is self-sufficient. It can all happen on site. In simple terms, a road carrying in the feedstock, the factory on site, and a road out with the finished products ready to join existing infrastructure. Regional fuel refining has obvious advantages, and Gerritsen envisages the possibility of four regional refineries throughout the country producing up to 1 million litres of fuel a day (250,000 litres per refinery), or a total of 7,800 barrels of fuel per day.

The next step is money, and lots of it. Gerritsen is confident it will be there. It’s a viable technology, and it’s ready to go. It’s commercially competitive. It’s long-term infrastructure investment of a type which can attract good support.

We have to wait and see whether the needed investment is obtained and the venture made operational, but even at this stage the project is a cheering reminder of how much can be going on, little reported, in the exploratory area of renewable energy and with what encouraging prospects. It’s also a reminder that a small company in a small country can be a significant contributor on an international level. Even in a small country whose Government is more excited by exploration for fossil fuels than for renewable energy.

Renewable energy projects such as that pursued by Aquaflow have to demonstrate economic competitiveness against the benchmark of cheap fossil fuel, without fossil fuel being required to pay the cost of its damage to the climate and without any compensating subsidy being offered to clean energy for not adding to greenhouse gas pollution. The fact that renewable energy in a variety of forms is nevertheless beginning to emerge as economically competitive with fossil fuel is a testimony to the human inventiveness so crucial in the battle against global warming and also gives the lie to the claim that the cost of moving to a low-carbon economy will be crippling.