Virgin Australia (ASX: VBA) is collaborating with Renewable Oil Corporation (ROC), Dynamotive Energy Systems Corporation (DYMTF) and Future Farm Industries Co-operative Research Centre (FFI CRC) to develop a sustainable aviation biofuel that also has benefits for the Australian farming community and the environment.

The partnership plans to use innovative fast pyrolysis technology developed by Dynamotive to process mallees, a eucalypt tree that can be grown sustainably in many parts of Australia.

Virgin Australia CEO John Borghetti said: “Over the past few years Virgin Australia has been working with stakeholders across the industry to research and develop bio-derived renewable fuels that can be used to progressively replace conventional aviation fuels.

“We believe this new project has great potential given the results with the technology and the availability of this unique Australian feedstock.

“It is also particularly attractive to Virgin Australia because it aligns with our commitment to supporting the Australian economy and environment, and encouraging Australian innovation”, Mr Borghetti said.

Dynamotive has invested in excess of $100 Million and more than 10 years of work in developing its fast pyrolysis technology from bench-scale through to commercial-scale plants in Canada. The plants are equipped to make pyrolysis oil for fuels and also produce biochar, for soil improvement and carbon sequestration.

Dynamotive CEO Mr Andrew Kingston said “We have a great opportunity to develop a sustainable industry in Western Australia capable of producing second generation fuels that do not require food sources and have positive effects in land and water management.”

Leading the commercialisation of mallees is the Future Farm Industries Co-operative
Research Centre (FFI CRC), a national R&D joint venture with experts in breeding, growing and harvesting these trees.

CRC CEO Mr Kevin Goss said: “Our research shows that mallees can be planted in balance with profitable crop and livestock production in Australia’s wheatbelt region. As well as becoming a source of biomass for renewable energy they offer protection from wind erosion, help to avoid dryland salinity and provide improved livestock shelter. They even provide habitat for native birds and mammals.”

Already more than 1,000 farmers have planted mallees in belts on their farms, mainly in
Western Australia. Later this year the FFI CRC partnership will bring the prototype, world’s first hardwood biomass harvester to Western Australia for wide-scale demonstrations.

Virgin Australia and its partners are currently finalising plans for a demonstration unit that will make bio-fuels for testing, certification and public trials. The demonstration unit is intended to be operational in 2012, after the construction of a commercial-scale plant, which could be operational as early as 2014.