Bioethanol

The EU Biofuel Directive governing the mandatory substitution of biogenic fuels requires the following substitution levels in Austria

• From 1 October 2005 – 2.5% (by calorific value)
• From 1 October 2007 – 4.3% (by calorific value)
• From 1 October 2008 – 5.75% (by calorific value
 
This is tied to a tax break for diesel effective from 1 October 2005 with at least 4.4% biogenic fuel by volume, with a tax break applying to the same minimum level of substitution for gasoline effective from 1 October 2007. The Bioethanol Directive also came into effect on 1 October 2007. This entails tax breaks for high bioethanol concentrations (85%) in gasoline mixtures.

In March 2007, the Austrian federal government also announced the ambitious target of achieving the 10% substitution level proposed by the EU Guideline by 2010, considerably earlier than the 2020 deadline set by the EU itself.

It was in this context that AGRANA set about building the first industrial-scale bioethanol production facility in Austria. Located in Pischelsdorf, this facility has a capacity of up to 240,000m³ a year.

Traditional Austrian crops such as corn, wheat and sugar beet will serve as the raw materials. This in turn will secure the sustainable farming of around 75,000 hectares of arable land.

The production of bioethanol from cereals will also generate up to 190,000 tonnes of protein-rich animal feed, marketed as ActiProt, which can be used to partially substitute imports of soya-based animal feed from oversees.

AGRANA’s production of bioethanol from renewable raw materials for gasoline substitution is also associated with positive energy and ecological benefits. The burning of ethanol as opposed to gasoline entails a reduction in CO2 emissions of around 1.6 kilograms of CO2 for every litre used. This means that the AGRANA facility will lead to a reduction in CO2 emissions of around 380,000 tonnes per year.

The AGRANA bioethanol plant at Pischelsdorf in Lower Austria entered pilot operation on 1 October 2007. The marked increase in the price of raw materials from mid 2007, however, led to AGRANA’s decision, following the successful completion of the pilot phase, to postpone the start of production until spring 2008. The bioethanol plant was started up in May 2008. The first bioethanol was produced at the beginning of June.

Hungary

Tax breaks have also been introduced in Hungary as a means of underpinning the implementation of the EU biofuels directive.

The exemption from tax on oil amounts to 100% for ETBE (ethyl tertiary butyl ether: containing up to 47% bioethanol instead of methanol and with similar properties to MTBE) and biodiesel.

Approximately 1% bioethanol in the form of ETBE is currently admixed to fuel.

The Hungarian government has extended the implementation of the EU guideline at the national level to require the mandatory admixture of 4.4% biofuel to fossil fuels from 1 July 2007. Any failure to reach this level of admixture is subject to a higher rate (+8%) of tax.

Due to the fact that the demand for ETBE in fuel is limited, it is now also permitted to directly admix bioethanol.

AGRANA’s subsidiary, Hungrana, supplies around 60% of the Hungarian petroleum industry’s demand for ethanol. Work began during the second quarter of the 2005|06 period on the expansion of the existing ethanol production facility in order to meet the level of demand. This project to expand the capacity of the plant to approximately 52,000m3 per year was completed in May 2006.

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