A shared passion
Turning fields of gold into a sustainable fuel source
June 19, 2024

By GrainCorp CEO, Robert Spurway

Australia’s next great oil bonanza could well be green and gold.

If you’ve ever driven through rural towns spread out across the East or West coasts of Australia in September, you’ve probably stopped to admire the vast fields of golden canola flowers swaying gently under the Australian sun.

Just as these bright flowers turn that sunlight into nourishment, canola growers themselves are poised for the shift that will turn their crops into valuable feedstocks for a new domestic market.

The premium quality and high oil content of our national canola crop makes those fields of gold a prime feedstock for any future onshore renewable fuel production – and the grains industry is ready, willing and able to seed the opportunity.

To that end, growers and feedstock producers alike welcomed the inclusion of traceability schemes, consultation on mandates and other low-carbon liquid fuel initiatives in the recent Federal Budget.

The high oil content of Australia’s canola crop makes it ideal for renewable fuels, like Sustainable Aviation Fuel.

Industry ready for action  

National grower representative groups Grain Growers Ltd and Grain Producers Australia have signalled their members’ support of the establishment of a new domestic market for canola.

Currently, our nation’s growers produce much more than we can eat, with a surplus average of nearly 5 million tonnes of the oilseed exported overseas annually in the last three years – with the vast majority refined into biofuels.

GrainCorp is progressing plans to expand our oilseed crush capacity to manage the feedstock task, and working in partnership with IFM Investors, who are focused on establishing a domestic sustainable aviation fuel (SAF) sector as a significant manager of investments in Australian and global airports.

With a likely minimum cost of $500 million, the greenfield addition to our crush would add between 750,000 to 1 million tonnes to our existing operational capacity.

In the Sustainable Aviation Fuel Roadmap published last year by the CSIRO, it was assessed that local production of sustainable aviation fuel (SAF) would prove the most likely gateway to production of other fossil fuel replacements, such as renewable diesel, lubricants and lighter hydrocarbons.

The same CSIRO research identified that just 4.5 million tonnes of canola could yield 2 million tonnes of lower-carbon liquid fuel, which is equivalent of around 250,000 return flights between Sydney and Melbourne.

A domestic SAF sector would deliver growers the opportunity to make the most of their comparative advantages of geographic proximity, while diversifying their exposure to global feedstock markets.

Airplane refuels on the tarmac. Photographer Tobias Titz. 

Best-case scenarios

Our feasibility work on the crush plant expansion is studying the best locations and timing for what we know will be a complex value chain – for GrainCorp, that means considering proximity to oilseed supply, fuel refining capacity, customer demand and export access for canola meal.

And what does best practice look like for the future of the transport sector?

The Government has recognised that transport is currently the third-largest source of greenhouse gas emissions in Australia, amounting to 21 per cent of Australia’s greenhouse gas emissions in 2023.

Electricity is not presently an option for driving either long-haul planes or heavy vehicles.

But the precedent is already set to inject renewable fuels into the diet of both sectors.

Currently, that excess supply of Australian canola is being used as a source of SAF that is mitigating emissions in Europe, the US and Asia, where governments have introduced incentives to attract investment in clean energy.

Earlier this year, Singapore unveiled their aviation decarbonisation goals, declaring 1% of all jet fuel used at Changi and Seletar Airports to comprise SAF by 2026, and to raise that to 5% by 2030.

Back home, QANTAS have stated a goal of 10% of their fuel use to come from SAF by 2030.

We think the Flying Kangaroo should be able to source that fuel load in Australia, and GrainCorp and the Australian agriculture sector are up for providing that solution.

And as for the regulatory framework required to stand up this fledgling opportunity, it is critical that industry and government continue to work together to achieve the right policy settings for Australia to hold its own on the global SAF production stage.

A signal on the horizon

It was pleasing to see $63.8 million pledged in the Budget to support emissions reduction efforts in the agriculture and land sector and the $32.2 million committed to fast-tracking the Guarantee of Origin scheme, which aims to measure and certify emissions intensity across key sectors of the economy.

And the allocation of $1.7 billion to the Future Made in Australia Innovation Fund over the next decade will support the commercialisation of net zero innovations like low-carbon liquid fuels.

GrainCorp is encouraged by the announcement of a consultation phase to identify options for production incentives, as well as the response of Government at all levels to our views on the initiatives required to deliver demand-side certainty from refiners and consumers.

For the agricultural industry, and for Australia’s golden growers, this is the much-needed next step to securing investment for the future of our fuel.

This article was originally published by The Australian on 14 June 2024.

GrainCorp CEO Robert Spurway discussing biofuels on a panel at The Australian’s Energy Nation Forum.

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