Australian renewable fuels has just closed its first large volume sale - a 6 month contract for between 2 and 3 million litres of biodiesel per month.

Succeeding in alternative energy in Australia is not easy - of all the world's developed countries, it has the lowest energy costs by far. This is because of its vast coal resources that are very inexpensively extracted. So it makes sense that the one area - transport fuel - where they produce less oil than they consume (55%), is the major opportunity for alternative energy.

In biofuels, feedstock costs trump almost everything. So it's interesting that arfuels (as they like to be known) has chosen to use processed tallow and used cooking oil, i.e. waste vegetable oils. I suspect that this may be because in Oz, the usual types of virgin oil crop feedstock (rapeseed, soya bean, palm, jatropha etc.) just wouldn't grow in the climate.

These last few weeks of falling oil prices have not been a great time to put the case for biofuels. And so, you wonder a little at whoever advised BDI Biodiesel (advfn page going up shortly) to go public on September 25th.

BDI Biodiesel had set its IPO price at EUR58 a share and right now its around 55. Hardly a success, or at least not yet. As I have commented earlier in this blog, it looks like oil has found a new trading range $60 - $80. And when in the last week oil fell below $60, it quickly recovered. Should it go north of $70 again soon, many biofuel (and solar) stocks might well rediscover their popularity.