19 – How does low emission canola benefit Australian farmers?

19 December, 2017

The future of grain production in Australia is not solely a story of changes in food demand and Australia’s capacity to remain competitive in food grain production. Australian grain farmers also dabble in the energy market for grains.

Explaining more; take the case of canola which has become a widely grown crop in southern Australia (See Figure 1), forming a useful rotational role in farming systems.

Figure 1. Average canola production in farming regions of Australia (2010/11-2013/14). (Source: Australian Bureau of Statistics and the CSIRO)

Much of the canola grown and exported from Australia finds its way onto European energy markets, principally for use in creating biodiesel. The European Union (EU) has an energy policy known as the Renewable Energy Directive. This policy mandates a target of life cycle greenhouse gas savings, compared to fossil fuels such as mineral diesel, for feedstock used in biofuel production in the EU.

However, from January 2018, this target of emission savings has been increased to 50% for most biofuel installations. For installations commissioned since 5 October 2015, the savings target becomes 60%. This altered policy aims to lessen greenhouse gas emissions in the EU’s transport sector by ensuring less use of mineral diesel and greater use of biofuels that have verifiable fewer emissions relative to mineral diesel.

Fortunately for Australia, in 2015 with some fore-knowledge of the likely new policy requirements in the EU, AEGIC and some members of the Australian Oilseed Federation set up and funded a project, undertaken by CSIRO researchers and emission experts, to measure and report life cycle greenhouse gas emissions associated with the production of canola in each Australian State. This investigation produced in mid-2016 a Country Report for Australia that was reviewed by experts in the EU throughout 2016 and 2017. Finally, on December 17, 2017, EU officials announced their formal acceptance of the report.

Importantly, this Country Report reveals that Australia is a low emission source of canola and so Australian canola qualifies for import into the EU, as a low emission feedstock for biodiesel production from 2018 onwards.

Australia annually exports over 1.7 million tonnes of canola to the EU and up to 70% of Australia’s canola exports go to the EU for use mostly in the biodiesel industries.  In addition, the non-GM status of Australian canola means it can seamlessly flow into the food or biofuel sector within the EU. Hence Australian non-GM canola does not need to be subject to the additional expense of identity preservation within the EU, and so Australian exporters and farmers receive an additional premium for the non-GM status of their canola.  Often this premium fluctuates from $30 to $70 per tonne.

Export of canola to the EU has greatly increased since the mid-2000s (see Figure 2) such that the EU is now the principal export market for Australian canola.

Figure 2. Australian exports of Canola to the EU: 2007-8 to 2015-16.

Moreover, in some regions such as Western Australia, with its small population and large production of canola (Figure 3), the export market of the EU is especially important. The price premiums in the EU for canola are very important sources of income for many grain farmers in Western Australia. Although Australian canola will remain preferred in the EU as a low emission source of feedstock for biodiesel production in 2018 there may be less available for export in 2018. Western Australia’s canola harvest in 2017 has been affected by dryness, although still around 1.8 Mmt will be harvested. The harvest has been affected by dry climate in the north and central parts of the Western Australian grainbelt. By contrast, last year’s bumper harvest was 2.2 Mmt.

Figure 3. Canola production in each State of Australia: 2009-10 to 2014-15.

So, in summary, not only does canola form a very useful practical role in farming systems by facilitating weed management, it also helps underpin the business resilience of grain farms by ensuring those businesses are not solely exposed to food markets but are also exposed to energy markets. The low emissions from Australian production of canola are an important marketing advantage that helps provide a price premium from which Australian exporters and producers of canola benefit. AEGIC, the Australian Oilseed Federation, CSIRO and the Australian government have collaborated to ensure farmers keep receiving those price premiums.

For the full joint media release, see https://aegic.org.au/australia-secures-1b-eu-canola-export-market/

More News

05 May, 2021

The world of noodles

Australian wheat is highly valued for noodles across Asia. The Asian noodle market represents over one-third of Australia’s wheat exports! Why Australian wheat? Flour millers across Asia prefer to buy Australian wheat for noodles. The combination of excellent noodle texture and colour attributes is unique to Australian wheat. White Australian wheat results in high milling yield […]

28 April, 2021


This post is current as of April/May 2021.  AEGIC is Australia’s leading organisation for market insight, innovation and applied solutions for the grains industry. We leverage our technical know-how, market insight and innovation capabilities to find and deliver practical solutions that create value for the Australian grains industry. We are currently building our technical capacity […]

27 April, 2021

AEGIC behind the scenes: Australian wheat for Asian bread

Asian diets are changing amid strong economic growth and increasing wealth. More and more consumers are recognising the benefits and convenience of baked products. Australia is well-placed to play a positive role in this change by understanding industry requirements. AEGIC’s bread research lab helps assess Australian wheat for Asian baking to get more of it into […]

21 April, 2021

AEGIC behind the scenes: Australian wheat for Asian noodles

The Japanese udon noodle market is Australia’s most stable premium wheat market. Japanese noodle lovers know what they like when they’re tucking into a delicious bowl of udon or ramen noodles. AEGIC runs a highly-trained udon noodle sensory evaluation program with the Japanese Flour Millers Association (JFMA) to ensure new Australian wheat varieties meet Japan’s strict requirements. […]

15 April, 2021

Enhancing noodle texture and colour

Asian flour millers prefer to buy Australian wheat for noodles because of its bright, stable colour and good texture. Thanks to a landmark AEGIC research project*, we know that noodle colour, colour stability, and texture are among the most important factors that flour millers look for when buying wheat for noodles. The research found that […]

13 April, 2021

50 – The Rise of the Middle Class

02 March, 2021

Whole grain for better health

Increasing whole grain consumption represents a major opportunity and challenge for the food industry. Extensive evidence now shows the connection between whole grain consumption and reduced risk of several chronic diet-related diseases. Greater intake of whole grains in the diet leads to reduced incidence of cardiovascular diseases, gastrointestinal diseases, cancer, and diabetes. To address this […]

26 February, 2021

AGIC Asia 2021 to reach Asian feed and whole grain buyers

The Australian Grain Industry Conference 2021 will feature a special session led by AEGIC on the benefits of Australian grains for animal feed, and the health benefits of whole grains for human consumption. AGIC Asia, which will be held virtually this year on Wednesday 3 March 2021, is a key date on the grain industry […]

05 February, 2021

Stimulating Australian feed grain demand in the Philippines and Thailand

Feed grain buyers in the Philippines and Thailand learned the compelling benefits of using Australian feed grains for swine following two well-attended AEGIC webinars this week. The webinars, presented in conjunction with Austrade, featured experienced Australian feed nutrition expert Tony Edwards as keynote speaker. The Philippines event attracted 150 representatives of the grain and animal […]