The Australian Renewable Energy Agency (ARENA) today said it is providing early-stage support that could see an AUD-800-million (USD 613m/EUR 538m) bioethanol project in Queensland become a reality.

Renewable Developments Australia Pty Ltd (RDA) will get AUD 3 million from ARENA to help build the business case for the project proposed for construction at Pentland, near Charters Towers. The activities include growing and irrigation trials, due diligence and preliminary work related to the future engineering and construction services.

The plant is designed to produce up to 350 million litres (92 million gallons) of bioethanol per year, which would lift the country's production by 80%, said ARENA chief executive Ivor Frischknecht. The fuel will be sold under a proposed off-take agreement with a global agriculture and energy corporation and exported through the port of Townsville, he added.

The plan envisages RDA growing its own sugarcane and sweet sorghum for biofuel production. The site will also feature a 32-MW co-generation power plant, fueled by a lignin by-product. It is the company's ambition to turn the plant into the lowest cost ethanol production facility in the world.

ARENA notes that the global bioethanol market is expected to grow to 145 billion litres in 2022 from 98 billion litres in 2015, so there is a need for additional production.

The business case is due to be ready by November 2016.