The business started out recycling steel in the late 1990s. With peak oil approaching and an identified alternative, Smorgon Fuels again put their philosophy into practice and branched out into biodiesel research and production.

A special division of the business was created to concentrate on the development and production of biofuels. From used cooking oil, Smorgon Fuels turned out their first batch of biodiesel in late 2005.

Just seven years later, Smorgon Fuels is now one of Australia's largest biodiesel manufacturers, running a 100 million litre biodiesel plant at Laverton North that turns Juncea and other oils, into high quality biodiesel.

The business employs around 30 people in the production facility, sales, support services and raw material management – including the recycling of used cooking oils.

Feedstocks for biodiesel

Smorgon's chemists have developed processes to convert various feedstocks into fuel.

Feedstocks currently used by BioMax:

Food waste such as off-grade or rancid materials. Almost any food not fit for human consumption can be converted into biodiesel.

Algae produce oils and fats that can be converted into biodiesel. Read more about algae on page 2

Used cooking oil is sourced from the hospitality industry. Smorgon Fuels provide stainless steel vats to restaurants and cafes and a collection service to deliver the oil to their processing plant. Used oil is fast being treated as a commodity that can be sold rather than discarded as waste.

Juncea DJL200 oil produces a biodiesel with similar qualities to canola oil biodiesel. However, Juncea grows in low rainfall sites and the oil is not suitable for human consumption. Read more on page 2.

Poppy seed oil is a pharmaceutical industry by- product that makes a good quality biofuel.

Feedstocks not currently used by BioMax:

Other feedstocks such as canola can be converted to a very high quality fuel but is not used by Smorgon Fuels as it is also a food grade oil consumed by humans.

Palm oil can be converted to fuel, but its high freezing point makes it unsuitable in Australia's climate. In addition, Smorgon Fuels do not want to risk sourcing oils from SE Asian palm plantations that may have been established on land that has been purposely cleared of rainforest.

Tallow (animal fat) is generally not used, as BioMax Fuels consider it too expensive and like palm oil, it has a high freezing point.

Fuel from Juncea

The Juncea oilseed BioMax DLJ200 was developed by the South Australian Research and Development Institute (SARDI) as an alternative oilseed crop suited to low rainfall areas where rotation crop options can be limited.

DLJ200 was first grown commercially in 2009 on 4800 hectares. In 2010, Smorgon Fuels contracted 13,500 hectares across Victoria, South Australia and New South Wales and they continue to encourage uptake of the variety by farmers in low rainfall areas.

A non-food oil

Grown commercially, BioMax DLJ200 seed provides a non-food oil alternative to produce biodiesel. Oil from this seed has a lower oleic acid and higher glucosinolates levels than canola and hence is specified as unsuitable for human consumption.

Two products in one

In the production of biodiesel, oil seed is first crushed and the oil is extracted leaving a meal residue high in protein and carbohydrates that can be fed to dairy cows, poultry and pigs.

Processed locally

Wherever possible, seed is crushed close to where the crop is grown. The meal is sold from the crushing point and the oil is transported to Laverton for processing.

Product qualities

Biodiesel produced from BioMax DLJ200 oil complies with the Australian Biodiesel Standard and is noted for its Low Cold Filter Plug Point, Low Filter Blocking Tendency and High Ester content.

DLJ200 produces a meal that is more palatable to livestock than that from the unprocessed mustard seed.

Diagram 1: Oilseed to biodiesel closed loop process

Biodiesel use

Biodiesel is used mostly in cars, but can also be used in farm machinery such as trucks and tractors. However, it is also popular in indoor generators as biodiesel has fewer emissions than mineral diesel. i.e. it does not belch out smoke!

Batch production

BioMax biodiesel is currently produced in small batches to enable the use of different feedstocks. Each feedstock is processed separately before being blended to achieve the desired end product characteristics.

Fuel from algae oil

Smorgon Fuels have developed a process to convert waste carbon dioxide (CO2) emissions into biodiesel through industrial scale biosequestration using algae. In 2000 a trial was established at the Hazelwood coal fired power Station in the LaTrobe Valley, Victoria.

How it works

This process converts waste carbon dioxide into bio-products through the photosynthesis of microalgae.

CO2 produced from the combustion of fossil fuels by industries (such as energy production), is captured and pumped into waste water channels where micro-algae transform the CO2 emissions into vegetative matter and oxygen through photosynthesis.

Oil from the algae can be extracted and turned into biodiesel while the remains of the algae may be suitable as a livestock feed supplement, similar to oilseed meal.

Diagram 2: Process used to convert flue gases and sunlight into biofuels and other products through photosynthesis

Main challenges for the biofuel production industry


Sourcing economically viable feedstocks is a big challenge for biofuel manufacturers. The cost of feedstocks is rising, for example used cooking oil increased in price by around $400/ tonne from 2007 to 2012.

Demand and cost of production

Demand is often difficult to gauge. There is an assumption that people like and want to choose sustainable products. The barrier is that they are not willing, or able to pay more for these products.

Consumers may want an incentive to pay more for biofuels. They are less likely to pay more just to feel good about the purchase. The number of biodiesel manufacturers in Australia has dropped from seven in 2007 to three in 2012 due to cost of production issues.


Fossil fuel-based, mineral diesel provides strong competition with the more expensive biodiesel alternative. Biodiesel manufacturers in the United States, for example, receive incentives to produce biodiesel and some export it to Australia. Non-subsidised local producers have to compete with this imported product.

Further information on bioenergy and agriculture

Features of biodiesel

  • manufactured from renewable sources (vegetable oils, animal fats, used cooking oil)
  • direct substitute for diesel
  • simple to use, biodegradable, non-toxic and essentially free of sulphur and aromatics
  • can be substituted in compression ignition (diesel) engines, with essentially no engine modifications. (If in doubt, consult your Owner's Manual.)
  • reduces net carbon dioxide (CO2) emissions by 78% compared to petroleum diesel
  • when produced in Australia must first meet the Biodiesel Standard, and blends with mineral diesel must meet the Diesel Standard
  • safer to handle and store than conventional diesel
  • when mixed with low sulphur diesel, has superior engine lubricating qualities
  • can be blended into mineral diesel to a level of
  • 20% (i.e. 20% biodiesel; 80% mineral diesel), commonly called B20 Biodiesel
  • BioMax B20 Biodiesel fuel has detergent properties, which keep fuel injection systems clean, delivering superior environmental and vehicle performance benefits.
  • BioMax B20 Biodiesel is interchangeable with other diesel fuels.

Types of Biodiesel

Photo 2: Separating tanks at BioMax FuelsB100 is composed of 100% biodiesel

B5 is composed of up to 5% biodiesel. Consumers do not need to be notified of the biodiesel when it is less than 5%

B5 up to B20 will meet mineral diesel blend standards of Australia i.e. qualifies for tax rebate. Consumers must be notified of biodiesel content when it is above 5%.

Many manufacturers now have new engine warranties that allow use of B5-B20 biodiesel in their cars.

An emissions output comparison of 100,000,000 litres of different biodiesel types

 Kg/L CO2Kt CO2kt
carbon offset

Mineral diesel




Used cooking oil/

canola biodiesel




Algae biodiesel




Source: National Research Energy Laboratory (US) and Massachusetts Institute of Technology