Take off: Big super backs canola as a biofuel source for sustainable aviation

The country’s biggest industry super funds are betting on Australia’s canola crop to make enough aviation fuel to power a quarter of a million flights from Sydney to Melbourne each year.

Australia exports about 4.9 million tonnes of canola to Europe each year, largely destined for biofuel use.

The nation’s biggest industry super funds are backing a new renewable industry that could see Australia’s canola crop producing enough aviation fuel to power a quarter of a million flights from Sydney to Melbourne each year.

IFM Investors on Tuesday signed a memorandum of understanding with GrainCorp and Ampol to assess building a sustainable aviation fuels facility at Ampol’s Lytton refinery using canola and other agricultural feedstock.

Announcing the MOU at Lytton, federal Treasurer Jim Chalmers said sustainable aviation fuels “are good for workers, good for airlines, good for the economy and good for the environment. “But we’ve got to get the supply issues sorted out,” Mr Chalmers said.

“For Australia, there’s a big chance for us to be part of this ­really important, growing, global supply chain. It should not be beyond us to add much more value when it comes to our agriculture sector and also aviation.”

GrainCorp managing director Robert Spurway said biofuel was the only viable option for the aviation industry as it moved to decarbonise, and comes as overseas jurisdictions including the UK, Japan and Singapore mandate the use of aviation biofuels.

Australia exports about 4.9 million tonnes of canola to Europe each year, largely destined for biofuel use.

GrainCorp was already a key supplier of high-quality feedstocks across Australia and New Zealand, including canola oil, tallow and used cooking oil.

Mr Spurway said government policy settings needed to be right to encourage the growth of a sustainable aviation fuel industry using biofuel.

Treasurer Jim Chalmers at Ampol Lytton refinery on Tuesday. Picture Lachie Millard

“Australian growers produce millions of tonnes of feedstocks every year, the surplus of which is currently exported for refining into renewable fuels,” Mr Spurway said. “If we onshore the manufacturing it would be enough to produce 2 million tonnes of biofuel that could power 250,000 flights from Sydney and Melbourne.”

Mr Spurway said the renewable fuel refining industry could build a valuable new domestic market for the nation’s growers and feedstock producers, with the benefits flowing on to regional communities and consumers.

Under the MOU, GrainCorp will explore the supply of homegrown feedstocks, including additional crushing capacity to supply canola oil, to the future plant at Lytton, near Brisbane’s main airport.

GrainCorp is progressing plans to expand oilseed crush ­capacity, potentially adding between 750,000 and 1 million tonnes to its existing operational crush capacity

The announcement builds on feasibility work already conducted by each of the parties to develop feedstock supply and production capacity of renewable fuels, including sustainable aviation fuel (SAF) and renewable diesel (RD) in Australia.

SAF production this year is expected to triple to 1.5 million tonnes, accounting for 0.53 per cent of aviation’s fuel need, and 6 per cent of renewable fuel capacity.

IFM Investors global head of asset management Danny Elia said that, as a major investor in airports, the fund had significant interest in facilitating cleaner fuel for flying.