Nufarm chairman John Gillam says the Albanese government is in danger of squandering a once-in-a-generation opportunity for Australia to become a major player in sustainable fuels produced from crops.
Mr Gillam said Australia urgently needed policies – including mandates on the make-up of fuels – to accelerate the development of a local sustainable fuels industry to support the decarbonisation of sectors such as aviation.
“We have a narrow window of opportunity to achieve this before Australia falls too far behind other countries with policies successfully attracting investment to scale up their industries,” he told investors at the Nufarm annual meeting in Melbourne.
“Our ability to realise this once-in-a-generation opportunity hangs in the balance. Acting with a sense of urgency will accelerate Australia’s decarbonisation, strengthen our fuel security, create new jobs, and support the rural economy.”
Nufarm, which has put a heavy emphasis on developing sustainable fuel crops in diversifying its farm chemical business, comfortably avoided a second strike on its remuneration report at the meeting.
Mr Gillam, the executive behind the rise of hardware supplier Bunnings during his time at Wesfarmers, said Australia should follow the lead of the United Kingdom, where the Sunak government had reaffirmed this week that a sustainable aviation fuel (SAF) mandate would kick off in 2025.
Nufarm joins energy major BP in lobbying the government to impose green fuel mandates on Qantas and other domestic carriers to decarbonise air travel. BP has said it wants hard targets for the use of SAF as it weighs up a $1 billion investment in converting an oil import terminal in Western Australia to a renewable fuel production hub.
BP Australia boss Frederic Baudry told The Australian Financial Review in December that the safeguard mechanism – the government’s flagship emissions reduction policy – should be sector-specific and promote investment in a renewable fuels industry.
Nufarm has an agreement to supply BP’s North American business with the non-food crop Carinata, developed by its subsidiary Nuseed, and has started making deliveries out of Argentina.
Mr Gillam said Nufarm was seeking approvals that would allow Carinata to be grown at commercial scale in Australia, although he added that he did not want to see biofuel crops displace food crops. Most of the canola grown in WA’s vast Wheatbelt region is exported and turned into biofuel.
He said with the right policies, there was a big opportunity to do that processing onshore, and for farmers in summer cropping areas in the country’s east to produce biofuel crops.
BP’s Kwinana plant is slated to produce 10,000 barrels a day of SAF, or renewable diesel, with a final investment decision expected this year.
GrainCorp, another publicly listed major agriculture group, is preparing to spend several hundred million dollars on a new oilseed crushing capacity in WA and could emerge as a supplier to BP.
Mr Gillam said it would make sense to have one big crushing plant suppling an SAF industry in WA with potential for farmer-controlled CBH Group to become involved to complement its grain export business.
“If BP commit to Kwinana, there’s no doubt what will flow from that is a very big crushing plant,” he said. “These are real jobs, real long-term, high-quality jobs, and big investments.
“These are the things that can make Australia a better country for decades to come. I know that this government has a once-in-a-generation opportunity to do this. If they don’t seize the opportunity, what will happen is these investments will be made elsewhere.
“They’ll be made in South America, they’ll be made in North America, they’ll be made all over Western Europe. They’ll be made in eastern and southern Asia, and the result will be is that Australian long-haul flights will refuel with SAF elsewhere.
“Nufarm will be happily selling into all these global markets, mind you, but for an Australian farmer and an Australian perspective, there’s a real chance to seize the day.”
Extracted in full from: https://www.afr.com/companies/agriculture/nufarm-wants-biofuel-mandates-to-send-agriculture-flying-20240201-p5f1q2