CSR Limited , the leading Australia sugar provider, today announced a $17.8 million project to significantly increase its fuel ethanol production capacity to 60 million litres per annum.

The company cited rising demand in Australia for fuel ethanol as the reason for the project.

Currently, CSR produces up to 38 million litres of fuel ethanol and up to 22 million litres of industrial/beverage grade ethanol at its Sarina distillery each year. They will now upgrade the distillery by installing a molecular sieve dehydration unit to convert all its production to 60 million litres of fuel grade ethanol. The additional production is already in strong demand by Australian oil companies for blending into fuel, according to the company.

CSR will continue to service industrial and beverage customers through its additional sources of ethanol, including imports.

“This is a logical extension and important part of our strategy to further increase recurring earnings in our Sugar business and improve our renewable energy capability,” said Jerry Maycock, Managing Director of CSR. “CSR has long experience in producing renewable fuel ethanol from molasses, a by-product of raw sugar production, and this project further enhances our ability to meet the exponential growth in the fuel ethanol market.”

CEO of CSR Sugar, Ian Glasson, reports that CSR is Australia’s second largest producer of ethanol and is strongly positioned to develop its market position further. “Demand for fuel ethanol continues to grow strongly, particularly as awareness of its greenhouse gas abatement qualities increases,” he said. “The nature of CSR’s ethanol process means that every litre of CSR ethanol produces less than half the CO2 emissions of petrol, with no impact on food prices.”

Construction of the project is anticipate to begin in November, with completion scheduled for June 2009.

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