Peter Niewand is walking through his farm looking at his canola, wheat and barley crops. “Today, I’m Peter the primary producer. On other days, I’m Peter the managing director. And now, there are days when I’m Peter the oil baron,” says Niewand.With tongue firmly in cheek, Niewand is referring to his town’s involvement with Bendigo Bank’s biodiesel Community Enterprise.

Community Enterprise is a Bendigo Bank initiative designed to help communities provide essential services such as telecommunications or energy. It’s a concept that has evolved out of the bank’s innovative Community Bank model. There are now 185 Community Bank branches in Australia. Under this model, local communities invest in and operate their own Bendigo Bank branch. Profits are shared by the community company and Bendigo Bank.

There are already numerous Community Enterprise schemes providing telecommunications. The most recent initiative is the provision of biodiesel. Niewand is the chairman of the Central Wimmera Community Enterprise Steering Committee, a volunteer community group working on the biodiesel pilot in the towns of Rupanyup and Minyip. “We’ve already seen that the Community Bank model works,” says Niewand. “Our Community Bank branch has thrived here for the last eight years.”

In early 2006, the community also came together to found a Community Enterprise for telecommunications. Bendigo Bank negotiates bulk rates on behalf of many communities, supplies the service to the Community Enterprise, which can then determine the price it sells to the community.

“We can grow our own fuel”

“It worked for the bank, it worked for the telco. So we thought why not use the same model for biodiesel?” says Niewand. “If we can grow our own fuel, which is the ultimate objective, we don’t need to be reliant on anyone else for our oil supply.”

However, Niewand says there are a few steps to takebefore getting to that stage. Members of the community - of which Niewand estimates to be around 300 farmers - are asked to do two things: buy a share in the company and pledge to use the fuel.

“You can buy shares for A$1 to a maximum of A$50,000 which means that no one will ever have more than 10% of the company,” explains Niewand. “And if the community can pledge to use the biodiesel – around 4.5 million litres a year – then we know there is a ready market for it.”

The Community Enterprise will need to build a distribution facility where petroleum diesel can be blended with biodiesel. Although using 100% biodiesel is possible in the summer – a blend must be used in the winter due to freezing issues – they will continue using a blend until changes in excise tax make 100% biodiesel more affordable.

Biodiesel can be made from crops such as canola, soy, oil seeds and animal fats. “Once we have a groundswell of users, we can go to the next phase,” says Niewand. “If we’re going to use the fuel in our tractors, we may as well grow the crops to power the tractors. As a community, we can vertically integrate our products.”

If this occurs, the Community Enterprise will then need a crushing plant, to process the crops so it can be used for biodiesel. “The crushing of the oil produces both oil and meal. The oil can be used in biodiesel. And the meal can be used to feed sheep or cattle. So we’ll not only have an oil industry, we’ll have a feed industry that will help the meat industry.We’ll feed the nation – as well as drive the nation!”

Niewand’s enthusiasm is obvious as there is potential for many positive outcomes: the Community Enterprise schemes will eventually create jobs, transportation costs could be reduced if crops are going to a local buyer, and the community shareholders reap the financial returns.

“Initially the biodiesel will come from Australian Biodiesel Group in Sydney. It’s trucked in,” says Niewand. “If we have our own crushing plant then, as we get a delivery of biodiesel, we can load up the truck with oil back to the refinery to be processed. Once we have enough volume, we may even be in a position to put in our own refinery.”

Returning profits to the community

Bendigo Bank Community Energy Operations and Support Manager Leigh Watkins says there is enormous potential for the project as more farmers come on board.

“Like our Community Bank model, a percentage of any profits from the enterprise would be returned to community organisations and projects, building a sustainable income stream to provide for community needs,” says Watkins. “It would provide an off-farm investment for local people and there are enormous environmental benefits that come from using biodiesel.”

While it’s still early days for the towns of Rupanyup and Minyip, Niewand is confident about the future of biodiesel in his community. “This is a chance to create our own destiny,” he says. “It’s a new market that will give us good returns. If we can retain ownership then the value-adding effects are enormous. It’s great for the whole community. If the town prospers, we’ll celebrate and go to the pub. Then the publican makes a dollar too!”

www.bendigobank.com.au