Not that long ago, oilseeds were extensively used for industrial purposes. Many kids of last century would recall a claggy bottle of Tungoil sitting in the laundry cupboard, its use seemingly a mystery, as it never moved. The original Linoleum floor covering used linseed oil as its primary binder and, since pre-biblical times, rapeseed oil, crushed from brassica seed (Rapina), was used as a lubricant and a fuel for oil lamps.
However, with the rapid advance of industrialisation, the other ‘plant-based’ oil, petroleum (derived from ancient plants and animals liquified underground over millions of years) drove innovation that replaced seasonal plant oils for industrial purposes, directly or by way of oil based products (e.g. plastics). Petroleum also spelt the death of industrial animal oils. Those old enough will remember that whale oil products were purchasable from pre-Bunnings hardware stores such as Wright’s (fun fact: Wright’s is the same family as Peter Wright who went on to find fortune through Pilbara iron ore with Lang Hancock).
Although plant based oils have been used for food for centuries (e.g. olive and sunflower oil), fried foods of last century were mostly cooked in rendered fat from meat processing (and, if duck fat potatoes are anything to go by, would have been tasty!) and even early versions of margarine were made using beef fat. But convenience cooking saw families slowly turn to pre-packaged and processed products stacked with animal fats that increasingly found their way into arteries and on to waistlines in unhealthy volumes.
This confluence of factors meant that cooking oils from plants seemed like a great idea. There was cheap supply with lower industrial usage, and there was new demand for ‘healthy’ food.
In the US, the Chinese originated crop, soybean, just happened to be in the right place at the right time, as it was already grown (for forage, sileage and hay) and programs to flip the script for oil seed production kicked in en masse mid-last century. Before too long, more soy was grown in the US than anywhere else.
Soy is an agronomically fussy plant, liking warm conditions with rainfall above 500mm, so cropping areas such as the WA wheatbelt, keen on their own edible plant oilseed, had to find an alternative - and the problem with many plant-based oils is that they contain fatty acids which do not pass the flavour test. In rapeseed, it is erucic acid.
But never fear, in the 1970s, crafty Canadian plant breeders created a CANadian rapeseed for Oil with Low Acid (stick the Capitals together and voila – you have CANOLA). Australia liked the cut of the Canadians’ jib, but Northern Hemisphere varieties didn’t do so well on the sandplains of WA. Australian breeders took up the challenge and created their own low acid varieties. By the time Australia started producing exportable quantities, canola was the global brand (Ausola didn’t get run up the flagpole).
Australia has produced more and more canola as varieties improved, with WA alone producing 4.2 million tonnes in 2022. Normally when volume increases, prices drop, but not so with canola in recent years.
As volumes have increased over the last decade, it has coincided with the switch from food oils back to industrial purposes -specifically biofuels. Only a decade ago, the vast majority of oil crushed from exported Australian canola was used for food. These days – it's fuel in the gold medal position.
Canola is the feedstock of choice for the relatively simple process of making biodiesel or is processed into the likes of Sustainable Aviation Fuel (SAF). The European Union has been importing large volumes to reach sustainable fuel mandates and signs are that demand won’t stop there.
Australia imports almost all of its liquid fuel requirements from Singapore. How much oilseed does Singapore grow? Zero. But that didn’t stop Finnish sustainable fuel company, Neste, opening a SAF plant in Singapore in 2023 with a capacity of a billion litres (hello WA exporters).
Meanwhile, in Australia, GrainCorp has just announced a MOU with IFM Investors and Ampol to explore a renewable fuels facility in Brisbane and, earlier this year, CBH and Cargill jointly planted their flag next to the Kwinana terminal, with the potential to supply a BP biofuels refinery.
Let's not start on the volumes soy and canola oil crushing and attendant fuel processing mooted in the US and Canada which – if they progress – will seriously dent the available seaborne trade of oilseed.
Many of these projects have a long way to go and, if the ethanol boom in the mid-2000s is any guide, some are likely to fall over. The key factor this time is that the need for Government policy to gazump commercials is not necessarily required. Although fossil fuels will out-compete biofuels on profit for a while yet, many institutional investors and the corporates themselves are all in on reducing emissions for social licence and long term viability, and the competition for first mover advantage is creating impetus.
If it comes off, then it's feasible that WA growers will be able to truck their canola into a million tonne processing facility in Kwinana and refuel their semis with the output for the trip back home with a load of fert – win, win win!
