GrainCorp is eyeing expansion opportunities locally and overseas in the biofuel market as global consumption of vegetable oil-based aircraft fuel and diesel rises rapidly.
The big eastern Australian grain handler, oilseed processor and tallow exporter believes it is uniquely positioned to take advantage of the hungry renewable fuel market.
Globally, green jet fuel and biodiesel production is forecast to more than double its 2021 volumes by 2024, reaching 41 million tonnes, and up to 45m tonnes by 2026.
Compound annual production growth is currently running at almost 20 per cent across the world's major markets, predominantly in the USA and Europe, but also notably in Singapore and China.
By 2030 the global sustainable aviation fuel (SAF) industry, alone, is forecast to be worth about $22 billion - a leap from less than $100m two years ago.
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SAF can cut aircraft emissions by as much as 80pc without requiring existing aircraft engines to be modified.
It is made by blending conventional jet fuel with vegetable oils including canola, soybean and sunflower oils, plus used cooking oil, forestry product residue and tallow.
GrainCorp is already a leading supplier and Australia's largest exporter of renewable transport fuel feedstocks via its Melbourne-based used cooking oil upcycling business, Auscol, and its tallow trading operations in Australia and New Zealand.
The company is also Australia's biggest canola seed crusher with 475,000 tonnes of production capacity at Numurkah in northern Victoria and in Western Australia at Pinjarra, south of Perth.
We are actively looking at how we can increase our capacity to meet demand
- Robert Spurway, GrainCorp
"We see a geographical opportunity for Australia in the renewable fuels market," said managing director, Robert Spurway.
"We are actively looking at how we can increase our capacity to meet demand."
He said the grain logistics, processing and marketing business would likely need to invest in expanding its interests in the agri-energy area, including possibly finding a partner to help it develop export opportunities.
The 50-year-old Auscol used cooking oil collection and processing division currently handles about 24m litres of oil for conversion to biodiesel.
It is sourced from about 5000 customers in the quick service restaurant and commercial food processing sector.
Although also used as a stockfeed ingredient, in personal care products and in industrial manufacturing, as a energy source recycled cooking oil produces about five times fewer carbon dioxide emissions than conventional diesel fuels.
Airline demand
In fact, Qantas jets refuelling at Heathrow in London - the world's largest user of SAF - are already flying to Australia on the biofuel mixture.
In line with an international aviation sector's decarbonisation efforts, the national airline wants to be using 10pc SAF by 2030.
While the aviation industry is also pursuing electric and hydrogen powered flight alternatives to fossil fuels, biofuel is currently considered the only practical option on long-haul routes.
In fact, the Australian industry is worried if local SAF production initiatives are not implemented soon, almost all Australia's oilseed and recycled oil production will be fully committed to overseas processors.
That would force airlines to pay for sustainable aviation fuel, made from Australian ingredients, to be imported from from Singapore or North America.
Long term contracts
With biofuel feedstock supply contracts now being signed for up to 10 years by overseas buyers, Qantas managing director, Alan Joyce, has voiced concern about Australia "dropping the SAF ball".
"It's a shame if Qantas has to meet its 10pc sustainable aviation fuel target in 2030 by just buying it offshore," he said.
Australian crop chemical and seed technology company, Nufarm has hopes for its Carinata oilseed to be trialled commercially in Australia next year as part of its global rollout of the SAF feedstock globally.
Already grown in South America and the US and contracted to energy giant BP, Nufarm has estimated by 2030 Carinata could provide the low carbon feedstock for about 4 billion litres of sustainable aviation fuel every year.
Meanwhile, the federal government recently agreed to establish a SAF council, similar to Britain's Jet Zero' council which was tasked with ensuring 10pc of UK aviation fuel consumption involves SAF by the end of the decade.
However, Bioenergy Australia chief executive, Shahana McKenzie, has urged Canberra, and energy and agriculture industries to work together much faster because SAF production is progressing so rapidly overseas where supportive policies are encouraging billions of dollars of investment.
She said if there were no strong signals to farmers and the Australian biofuel feedstock market about projects on the drawing board here, overseas ventures would lock in all locally produced raw ingredients for themselves.
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Andrew Marshall
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
