Australia Exports Tallow as Diesel Dependence Bites

Australia imports 90 per cent of its diesel and exports most of its tallow. That gap has drawn government and corporate interest in making renewable fuel at home. Diesel powers transport, agriculture, mining and other sectors, and disruption to global oil supplies from the Iran war has put Australia’s dependence on imported fuel in sharper focus.

"What's happened in the Strait of Hormuz is fuel security has become really important," said Jeff Summerville, GrainCorp's head of agri-energy. "So, how can Australia be more self-sufficient?" His proposed answer comes from an animal-processing by-product that already moves through global markets: tallow.

The export market calls the shots

Tallow comes from rendering: processors melt and purify fat, oils and bones from cattle, sheep, poultry, pigs, goats and aquaculture. They can combine it with used cooking oils and canola oil to make renewable fuels. Australia is the world’s biggest exporter of tallow and animal oils. Exports reached a record $1.5 billion last year as global demand surged, particularly in the United States.

Most Australian tallow already has a destination. "We still use some tallow for food refining whether it's pastries or good old-fashioned meat pies, but by far the bulk of it is exported into those renewable fuel markets," Summerville said. About 80 per cent currently goes to the United States, which has a strong renewable fuels policy but lacks enough feedstock for its own fuel production, said Jess Bloomfield, executive officer of the Australian Renderers Association.

Australia has about 3 million tonnes a year of raw materials for rendering, Bloomfield said. Last financial year, processors turned more than a million tonnes into rendered products, primarily from beef, after Australia recorded its biggest cattle slaughter numbers since 1978. Those products went into pet food, poultry feed, pig feed and aquaculture. "Pet ownership is increasing across the globe, so is poultry and pig production. So the demand for animal protein meals is increasing every year," Bloomfield said.

The value of tallow rose 26 per cent following last year’s record production. Now the questions include who processes the material and where the resulting fuel gets made. Most tallow still goes abroad while Australia imports most of its diesel.

A domestic industry, built with corporate partners

The Australian government has committed to the Cleaner Fuels Program and is developing policies, Bloomfield said. "We're really hopeful that we can support a domestic industry and our fuel security." The program is a government policy effort; the article describes no community-run fuel project or grassroots response.

GrainCorp, primarily a grains exporter, is also Australia and New Zealand's largest exporter of tallow and used cooking oil. The company plans a domestic renewable-fuel refinery with Ampol and IFM Investors. "GrainCorp, with our partners Ampol and IFM Investors, is working with the government to start up a low-carbon liquid fuel industry," Summerville said. "That would be a refinery here at Lytton in Brisbane and GrainCorp would be the feedstock supplier to that project."

Rendering gets a high-tech makeover

Parwan Protein and Tallow, north-west of Melbourne, opened in 2023 at a cost of about $40 million. Its owners, the Failli family, aim to double or perhaps triple production within the next few years. The plant processes low-value material from its own meatworks and other Victorian facilities, producing bone meal for animal feed and high-grade tallow.

"You've got your stomachs, you've got your heads, you've got your hoofs, you've got your fat and bone. So all that product goes into rendering," Pietro Failli said. He said the plant must meet the standards of other food processing facilities. Summerville described the commodity’s change in status this way: "We often joke on the tallow trading desk that we're now the prettiest person at the dance. It used to be a really dirty, stinky product, but we're really seeing now it has become a globally traded product, an important product." He added: "We think it's a great opportunity for farmers. We think it's a great opportunity for Australia in terms of fuel security."