At Ozmotech, they know a good idea when they see one. Or rather, they understand the commercial possibilities of rudimentary innovation – they take a simple idea, refine it, and market it as an environmental technology with applications around the globe.

As a result, Ozmotech – a company formed in 1999 by investor Ray Peck with the aim of investing in environmental technology – has developed ThermoFuel, a process which turns waste plastics into diesel fuel. Not only does this divert tonnes of plastic away from landfill, it also provides an efficient high energy, low sulphur fuel source that can be used in all standard diesel engines without the need for any modification. This means that cars, buses and equipment can be fuelled by plastic waste.

Recognising commercial applications

However, Ozmotech didn’t develop this technology themselves. According to Ozmotech’s Marketing Manager Marc Middleton, their contribution to the innovation has been in recognising its potential and undertaking the necessary research and development to improve its quality and range of applications.

In fact, the company first discovered the technology in action at an unassuming film printing house in Japan. The film printing house was using waste plastic to generate fuel to power a diesel generator which produced electricity for their operations.

“What we saw there was technically inefficient,” says Middleton. “But we recognised the concept worked. We look for companies that have a brilliant idea but don’t necessarily have the resources, desire or capacity to develop it to a stage of full operational viability for the global market. We’re not a research and development company in the true sense of the word; we’re a ‘systems perfecting’ company. We take what we know will work and we make it better.

“At the time, in Japan, we were seeing two guys come into work in the morning, shovel out the previous day’s char from a chamber (which was part of the process to convert the plastic to diesel fuel), then throw bricks of plastic into the chamber. They used brooms sticks to move things around to get in as many plastic bricks as they could, then they’d close the hatch and that would be their work for the day.”

Middleton says Ozmotech recognised the potential scalability of the idea. “It had such a low yield and, more importantly, the resulting product was not standards compliant,” he says. “That means you couldn’t use it in a car or bus – it was only good for diesel generators.”

Ozmotech bought the worldwide intellectual property for the process in 2001 and then spent three years and A$4 million to advance and refine the system.

“We’ve turned that rudimentary system into a plant that’s financially viable and more importantly, produces standards-compliant fuel for use anywhere in the world. And we’ve increased throughput from three tonnes to 20 tonnes a day. There’s hardly an element of the process that hasn’t been reviewed and upgraded. But the fundamental technology – what the system does –is largely unaltered.”

Ozmotech manufactures and sells the plants to operators around the world, particularly environmental solutions providers and waste management companies.

Overseas support versus local restrictions

By 2006, Ozmotech had orders for 46 plants from overseas buyers including a A$190 million European contract with Dutch renewable energy company, EnvoSmart Technologies.

A further 15 plants were due for sale within Australia. However, this has been put on hold because of the Federal Government’s changing stance on excise on plastic-derived fuels. Like other innovative companies involved in the production of alternative fuels, Ozmotech has found greater support for its technology overseas than on its own shores.

“In 2001, we secured a ruling from the Australian Taxation Office that fuel produced from waste plastics was not an excisable good. So we went to market based on that,” says Middleton. “We then signed a contract with Axiom Energy for the sale of a number of plants. Axiom went to market to float based on our technology and their plans to build a biodiesel plant. However, just before the float – which was due to be in September 2005 – they were advised by the Federal Treasury that there was to be a review of excises and there was no guarantee that plastic-derived fuels would be outside the Act.”

Middleton says that Axiom had to pull out of the float and return money to investors. “The float was abandoned,” he says. “Even though our international orders are growing, there will be no plants built for Australia until this issue had been resolved. It’s a sad situation – we are building plants to go overseas and yet the Federal Government won’t assist us to put any in our own backyard.”

Nevertheless, the appetite for this technology from overseas buyers is healthy. Middleton says:“In the next three to five years, I would think that there would be up to 200 ThermoFuel plants operating, or on order, worldwide.”

www.ozmotech.com.au