Queensland Moves One Step Closer to Becoming U.S Navy Biofuel Bunker Supplier

Queensland has moved one step closer to becoming a biofuel bunkering station for U.S. Navy ships.

Queensland, Australia has moved one step closer to becoming a biofuel bunkering station for U.S. Navy ships after the state's Premier, Annastacia Palaszczuk, signed a Statement of Cooperation with Tom Hicks, the Deputy Under Secretary of the U.S. Navy, Australian media reports.

The agreement is said to define a discussion framework to support the "research, development, supply and sale of advanced biofuels," and is intended to help the navy meet its green fleet target of using 50 percent non-petroleum sources by 2020.

Queensland is said to view the U.S. Navy's new renewable energy needs as an opportunity to develop the Australian state as a biofuel hub.

"What the U.S. Navy is saying to us very clearly here in Queensland is 'we need this supply, can you meet this supply into the future,' and that is what we are throwing every thing at so we can be that player," said Palaszczuk.

"I also want to acknowledge that Queensland is the only state that has signed an agreement with the US Navy in Australia and I thank the US Navy for that."

One of the big question marks over biofuel bunkers has been their cost, and it was noted that work to develop the state's capacity to supply the required quantities of product at the price that the U.S. Navy requires, still needs to be completed.

"It is important for us to note that we are not talking price parity, we are talking price competitive, so it needs to be - we recognise that as a new kid on the block as you will, this is an area where we are going to need to provide that support and not look for parity, but look for competitiveness," said Hicks.

Queensland's biofuel station is expected to provide the navy with a fuel consisting of 10 percent beef tallow mixed with conventional petroleum.

The Queensland government notes that the fuel will be supplied by Southern Oil Refining Ltd., a A$16 million ($12.18 million) biofuel pilot plant, although a further A$150 million plant may also be developed by the company as well.

Meanwhile, the Australian Navy, along with Virgin Australia Airlines and Air New Zealand, are also reported to be examining the potential use of biofuels supplied from Queensland.

Earlier this month Chuck Red, Vice President at US-based biofuels firm Applied Research Associates (ARA), who are also supplying the US Navy with biofuel bunkers, told Ship & Bunker he was confident that competitively priced sustainable biofuel products are not only possible, they will be a reality in the near future.