The volatile world market prices for fossil fuels in the past years have significantly increased interest in the development of indigenous sources of energy in the Pacific islands. As part of their resources governance strategy, many Pacific island Governments are looking into the use of local biomass resources to replace traditionally imported fuels such as petrol and diesel with biofuels. This report gives an overview of biofuel technology, activities, experiences and key achievements in the Pacific region with regard to efforts to develop alternative fuel.

Experiences in the region show a niche for vegetable oil, especially coconut oil, fuel blends with diesel or kerosene, in certain cases, but will lead to additional maintenance and repair cost. Vegetable oil fuel that respects quality standards such as DIN 51 605 can be used in blends in indirect injection engines only. For use of vegetable oil blends in direct injection engines, modifications to the engine must be implemented and special operating load characteristics need to be followed. Modification of engines can lead to high up-front cost for a car or generator, however the additional repair cost of not following standards, suitable types of engines and operational characteristics are significantly higher over the life cycle of the engine.
If vegetable oil is converted into biodiesel by esterification, following standards such as PNS 2020 or equivalent, it can be used in virtually any engine with no adaptation. The cost of small-scale esterification of vegetable oil is estimated at US$ 0.3 – 0.6 per litre depending on the size of operation and requires importing methanol, required for the esterification reaction. Small-scale biodiesel can supply fuel for ships and trucks on remote islands where fuel prices are high, provided there is sufficient management capacity to run a biodiesel conversion plant.

Ethanol produced from sugar cane and starchy crops can partly replace petrol as a fuel. The production of ethanol following the proposed ANZ Standard (or equivalent) can replace petrol in vehicles up to 10% with no modification and up to 22% with some modifications according to the model and year of production.

There are no quality standards for biofuels in any of the Pacific Island Countries whereas it is widely acknowledged that this would greatly facilitate market acceptance. In order to achieve sustainable indigenous biofuel industries, it is imperative to enhance regional co-operation and information sharing and to establish quality standards on a national level. It is also imperative that guidelines for appropriate production methods are agreed upon, taking into account the total environmental impacts of biofuel production, use and the creation of side products.

Biodiesel from coconut oil and the production of fuel ethanol will not take off unless governments assist with these developments at prices below US$ 100 per barrel of oil. Government support in the form of tax incentives, partial duty concessions, investment promotion and public-private partnerships can significantly advance a biofuel industry.
Most countries in the Pacific region have the resources to produce large amounts of coconut oil-based fuels, while the larger countries also have a vast potential for the production of ethanol. 30% of all regional transport fuels could be replaced by biofuels in 2015, if plantations are revived and industries restructured.

Economic advantages of indigenous biofuels include reduction of energy import dependence, increasing economic resilience, an improvement of the balance of trade and support to local farmer prices. It is suggested that not all fossil fuel duties are waived for biofuels as the overall impact on the country’s finances might be negative, if subsequent losses of agricultural exports are also taken into account.

Biofuels are part of the solution to make the Pacific countries’ energy supply more renewable and will pave the way for a cleaner environment, creation of jobs and a more resilient economy.

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