GM Holden Ltd. joins a consortium to investigate the viability of establishing Australia’s first ethanol facility capable of turning materials such as household rubbish and building waste into more than 53 million gallons (200 million L) of ethanol annually.

The plant would produce ethanol using a process developed by U.S. biofuels company Coskata Inc., which last year unveiled one of the world’s few facilities capable of producing ethanol from such waste materials. Coskata has close ties with GM Holden parent General Motors Co.

While no price tag for establishing the plant has been given, previous published reports peg the cost at about A$300 million ($275.6 million).

The consortium, formed by the Victoria state government and a group of leading companies, will look at blending the ethanol into E85, a mixture of 85% ethanol and 15% gasoline.

Other members of the consortium include Caltex Australia Pty. Ltd., Veolia Environmental Services Pty. Ltd. and Mitsui & Co. (Australia) Ltd.

“(The consortium’s) vision is that this technology will, in time, cut Australia’s dependence on (gasoline) up to 30% and make a major contribution to sustainable motoring and greenhouse-gas reduction,” GM Holden Energy and Environment Director Richard Marshall says in a statement.

GM Holden later this year will introduce Australia’s first locally produced flex-fuel vehicle: an E85-compatible Commodore.

“We’ve always said we’d take a leadership position on biofuels, and provide the vehicles to do that,” Marshall says. “We’re committed to having locally built Holden cars capable of running on E85 in the market by 2010.”

GM Holden sees ethanol compatibility as one of the keys to keeping its Commodore large car, the top-selling vehicle in Australia, viable over the next decade.

The auto maker says its push toward alternative fuels in Australia is part of GM’s global sustainability and energy-diversity strategy.

Caltex Australia Marketing General Manager Andy Walz says his company has signed an agreement with GM Holden for the installation of fuel pumps in 30 metropolitan and regional service stations later this year, increasing to 100 within 12 months.

“Caltex’s expansion into this new fuel and participation in the consortium is part of our ongoing commitment to biofuels and tackling climate change, which fits well with a strategy of providing energy beyond the traditional fuel mix,” Walz says.

“Caltex already has about 400 service stations that sell E10 and a growing biodiesel market. We believe the biofuels industry has a vital role in a sustainable transport fuels future and that biofuels are good business opportunity for Caltex.”

Coskata Chief Marketing Officer Wes Bolsen is quick to point out that not all biofuels are created equal.

“At Coskata, we don’t make fuel from food crops, we use sources like municipal waste that have reached the end of their lifecycle and turn them into renewable energy, which leads to a net positive effect for the environment,” he says.

The consortium’s initiative is a quantum leap from the way in which Victoria now receives, sort and treats its existing waste, Veolia Environmental Services Victorian Group General Manager Simon Tori says.

“Deriving energy from municipal, commercial and industrial waste that is otherwise bound for landfill is an exciting possibility, and such a facility will enable Veolia to be at the forefront of the emerging advanced resource recovery treatment sector,” he says.