Australia, which imports 90 per cent of its diesel, could find part of a homegrown solution to fuel security in tallow, GrainCorp's Jeff Summerville said. The rendered animal fat was exported at a record value amid global demand for renewable fuels, and GrainCorp has plans for a domestic renewable fuel refinery. The global disruption of oil supplies from the Iran war has highlighted Australia's fuel import dependence.
"What's happened in the Strait of Hormuz is fuel security has become really important," GrainCorp's head of agri-energy, Jeff Summerville, said. "So, how can Australia be more self-sufficient?" Mr Summerville believed part of the solution could be found in tallow, a by-product of meat processing made by rendering fat, oils and bones.
Australia is the world's biggest exporter of tallow and animal oils. Last year, exports soared to a record $1.5 billion, driven largely by surging demand from the United States, where strong renewable fuel policies have outstripped domestic feedstock supply. Ms Bloomfield said about 80 per cent is exported to the US at the moment.
Last financial year, more than a million tonnes of rendered products, primarily from beef, followed the biggest cattle slaughter numbers in Australia since 1978. Jess Bloomfield, executive officer of the Australian Renderers Association, said the products went into pet food, poultry and pig feed, and aquaculture. The real driver is growing demand for renewable, non-fossil fuels.
"The Australian government has already committed to the Cleaner Fuels Program, and there are policies being written at the moment," Ms Bloomfield said. "We're really hopeful that we can support a domestic industry and our fuel security."
Mr Summerville said GrainCorp, together with Ampol and IFM Investors, is working with the government to start up a low-carbon liquid fuel industry, with a refinery at Lytton in Brisbane and GrainCorp as the feedstock supplier.
The emergence of the renewable biofuel market has seen increased investment in new high-tech rendering plants. Parwan Protein and Tallow, north-west of Melbourne, opened in 2023 at a cost of about $40 million, with owners looking to double, perhaps even triple, production within the next few years. Owner Pietro Failli said the modern plants are a far cry from the old, smelly rendering works, and that they had to make sure the plant was no different from any other food processing plant.
"We often joke on the tallow trading desk that we're now the prettiest person at the dance," Mr Summerville said. "We think it's a great opportunity for farmers. We think it's a great opportunity for Australia in terms of fuel security."
Analysis
Why This Matters
- Australia imports 90 per cent of its diesel, making it highly vulnerable to global supply shocks. A domestic tallow-to-fuel industry directly addresses this critical economic and security gap.
- The renewable fuel boom is turning a low-value by-product into a high-demand global commodity, driving investment in regional processing infrastructure.
- Success would boost Australia's supply of low-carbon liquid fuel for hard-to-electrify sectors like heavy transport, agriculture and mining.
Background
Tallow is rendered animal fat, a by-product of meat processing. Historically used for candles and soap, its value has been transformed by global demand for feedstocks in renewable diesel and sustainable aviation fuel. Australia is the world's largest exporter of tallow, with 80 per cent of exports currently going to the US. The Iran war and the disruption of oil shipments through the Strait of Hormuz have sharpened the government's focus on domestic fuel security and refining capacity.
Key Perspectives
Jeff Summerville (GrainCorp, head of agri-energy): Says tallow is a critical ingredient for domestic fuel security. GrainCorp is working with Ampol and IFM Investors on a renewable fuel refinery at Lytton in Brisbane.
Jess Bloomfield (Australian Renderers Association): Points to strong US policy as the driver of the export boom and expresses hope that Australia's Cleaner Fuels Program will support a domestic industry.
Pietro Failli (Parwan Protein and Tallow): Highlights the transformation of rendering into a high-tech, food-grade processing industry, with his company planning to double or triple production.
What to Watch
- The progress of the GrainCorp-Ampol-IFM refinery project at Lytton and the final shape of the government's Cleaner Fuels Program.
- The path of global oil prices and the situation in the Strait of Hormuz, which will maintain political urgency around fuel security.
- Whether record livestock slaughter and tallow volumes can be sustained, as a downturn would tighten feedstock supply for any future domestic refinery.