TWO large beef supply chain carbon abatement projects announced today have attracted Federal Government grants or loans for work totalling close to $6.5 million.

The export-licensed Kilcoy Pastoral Co beef abattoir north of Brisbane has received a $240,000 loan through Low Carbon Australia for an upgraded compressed air system, while the AJ Bush rendering facility near Beaudesert in southern Queensland has secured a $6.2 million grant to upgrade boiler infrastructure.

The grant to AJ Bush & Sons is one of the largest to be made since the Federal Government’s Clean Technology Food and Foundries Investment Program was launched last year.

It will help the large by-products manufacturer to invest in new, clean technology to improve its production efficiency and cut energy costs.

The company will match the Government grant on a dollar-for-dollar basis.

Industry and Innovation minister Greg Combet said AJ Bush would upgrade or replace inefficient coal-fired boilers with high-efficiency boilers, reducing the amount of black coal required during the steam-raising process.

The company will also cover its anaerobic ponds to capture the methane currently emitted and use the gas as a renewable fuel source to power a new biogas boiler for steam production.

Mr Combet said the measures would improve energy efficiency and deliver a significant reduction in carbon liability at the Beaudesert district plant. AJ Bush is one of several hundred Australian businesses calculated to produce more than 25,000 tonnes of carbon annually, exposing them directly to the Government’s Carbon Tax.   

The mitigation project is expected to reduce the carbon emissions intensity of AJ Bush's steam-raising production processes by 64 percent and cut its energy cost by 46pc.

"In order to make the transition to a low-pollution economy, manufacturers need to transform their operations by investing in energy efficient equipment and technology," Mr Combet said.

Funded by carbon price revenue, the Federal Government's $200 million Clean Technology Food and Foundries Investment Program has so far provided $9.3 million in support to 12 meat processors, renderers and manufacturers of smallgoods around the country. The program is open to eligible manufacturers with funding provided over six years from 2011-12.

"The CTIP provides valuable support to manufacturers looking to improve their operations and competitiveness around Australia. They are an important part of our plan for a clean energy future," Mr Combet said.

"I encourage manufacturers who are looking to make investments in energy efficient capital equipment to take a look at the guidelines and consider applying."

The AJ Bush project, under the management of food facility engineering, design and construction specialists, Wiley & Co, will start in early 2013 and is expected to be completed by mid-2014.

Wiley and AJ Bush have a long collaborative history. When AJ Bush elected to relocate its rendering facility from inner-Brisbane to Beaudesert in 1992, Wiley was commissioned to design, engineer and build the new facility. In 2001, the plant was completely destroyed by fire and Wiley was again awarded the task of reconstructing the plant, resulting in minimum interruption to the company’s overall production.

Managing director Tom Wiley said the AJ Bush project was a great example of the food industry leveraging eco-technologies to create significant reductions in energy consumption and real efficiency improvements.

In a second announcement today, leading beef exporter and regional employer, Kilcoy Pastoral Co, will use Low Carbon Australia finance to help it improve its productivity, reduce costs and enhance competitiveness.

Low Carbon Australia is not connected with the Clean Technology Investment Program, but provides loans and leases that can be used in addition to the CTIP grant funds.

Kilcoy’s chief executive Dean Goode said a $240,000 upgrade of the plant’s air compressor system was part of an ongoing program to improve productivity, sustainability and reduce plant carbon emissions.

“This upgrade is part of a continuing series of improvements aimed at delivering world-class environmental operations,” Mr Goode said.

Kilcoy employs 750 local people and processes more than 800 cattle a day, exporting premium beef to more than 20 countries worldwide.

“We’re proud of our reputation and have worked hard to improve our sustainability,” Mr Goode said.

With compressed air responsible for 10 to 15 percent of industrial electricity use nationwide, there are considerable savings to be made by ensuring compressed air systems are energy-efficient.

One of Australia’s leading independent experts in compressed air, CAPS Australia, will deliver Kilcoy’s plant upgrade, providing compressed air for pumps, tools and packaging lines.

CAPS Australia’s energy efficiency services national manager, Quentin St Baker, said the upgrade would not only substantially boost performance, but would also help to improve equipment lifespan and eliminate production downtime.

He estimated air compressor energy savings of more than 40 percent and reduction in maintenance costs by about 30pc.

Low Carbon Australia’s finance would cover the upfront costs of upgrading equipment and would allow Kilcoy to start benefiting from resulting energy efficiencies sooner, an LCA spokesman said.

Kilcoy Pastoral Company estimates the compressed air upgrade payback period at four years.