A nursery with rows of potted plants, labeled with yellow tags. The plants are mostly green with small, yellow flowers.

Investing in biofuels

We're developing Pongamia seed farms in Australia as part of a new biofuels pilot to explore the potential of Pongamia seed oil as a feedstock for renewable diesel, a cleaner alternative to traditional fossil fuels.

We’ve acquired 2,250 hectares of cleared land near Townsville in north Queensland to establish the pilot farms. Working with our partner Midway Limited, we’ll plant Pongamia and biodiversity saplings on land historically cleared of native vegetation and used for hay, cattle grazing or sugar cane. Planting is currently in progress with a target of 130,000 saplings to be planted this year. The Pongamia trees will take approximately 5 years to mature and produce seeds, which can be harvested annually, with targeted renewable diesel production of 10 million litres. The trees and soil remain intact to store carbon with annual harvesting of the oil rich seed pods. The pilot will study growth conditions, measure seed oil yields, and assess the viability of Pongamia seed oil as a renewable diesel feedstock.

Biofuel crop farming trial for renewable diesel production in Australia

Why renewable diesel?

Renewable diesel is a drop-in replacement to fossil diesel fuel. It can be made from fats and oils and has lower life-cycle emissions.

The most efficient and cost-effective long term-solution to reduce fossil diesel use in our mining fleet and equipment is electrification, however we’re not expecting mass deployment of battery electric haul trucks throughout our operations to be technically or commercially feasible before 2030. We’re collaborating with BHP, Caterpillar and Komatsu to pilot battery haul truck technology in the Pilbara.

We’re developing complementary pathways to more immediately reduce diesel-sourced emissions, including the use of biofuels, while we continue to invest in projects to support electrification. We have transitioned our US operations in California and Utah to renewable diesel but Australia currently lacks a sufficient biofuel feedstock industry to meet domestic demand. This pilot represents an important step in helping to bridge that gap and advance our decarbonisation goals.

What is Pongamia?

  • Pongamia is a medium-sized, fast-growing tree, that is native in northern Australia. 
  • Pongamia produces large numbers of seeds, which are rich in oil and protein. After the oil has been extracted, the seed pod and meal can be processed for other uses (e.g. cattle feed). 
  • Pongamia seeds can be harvested every year using a ‘shake and catch’ system. The trees and soil remain intact to store carbon.
  • Pongamia produces its own nitrogen – minimising the need for nitrogen-based fertilisers. 
  • Pongamia is drought tolerant, salinity and flood resistant, and, once established, has low water, fertilisation and pest control requirements.

What are Australian Carbon Credit Units?

Australian Carbon Credit Units (ACCUs) are a way for Australia’s Clean Energy Regulator (CER) to encourage and support efforts to reduce emissions and protect the environment.  

ACCUs are a tradeable credit CER grants to ACCU project developers when they reduce emissions or store carbon – each ACCU represents one tonne of carbon dioxide that is either absorbed from or not released into the air. Developers can then sell credits to other companies, who buy them to offset some of the emissions they create.  

While we’re prioritising direct actions to reduce carbon emissions – like improving energy efficiency, transitioning to renewable energy sources, and investing in innovative technologies – we also buy ACCUs to help meet our climate targets and compliance obligations, while supporting climate resilience and nature repair. We are also capping the use of carbon credits towards our 2030 target to no more than 10% of our 2018 baseline emissions.

By investing in projects that partner with farmers and community groups to create ACCUs, we’re meeting our compliance obligations while we support local communities and economies. 

This includes investing in carbon developers, such as Australian Integrated Carbon (in which we have a 14.15% interest) and the Silva Carbon Origination Fund, one of the first in Australia to provide investors with access to large-scale, high-quality carbon credits from land reforestation projects integrated with sustainable agriculture.

Developing ACCUs at the Pongamia pilot farm

ACCU certification can further support the economics of Australia’s emerging biofuel sector. So at the Pongamia pilot farm, we’re working to create high-quality ACCUs in 3 ways:

  • The CER has approved native biodiversity plantings on the pilot farm as eligible for ACCUs under the Environmental Plantings 2024 Method. These diverse native species are planted among Pongamia trees to promote pollination and biodiversity, preserving and enhancing local ecosystems.  
  • The CER has conditionally approved farming practices that enhance soil carbon as eligible for ACCUs under the Soil Carbon Method. These practices improve soil health and fertility while capturing carbon dioxide from the atmosphere and storing it in the soil. We anticipate unconditional approval in 2025. 
  • We are engaging with the Department of Climate Change, Energy, the Environment and Water (DCCEEW) to stand up a new ACCU method for carbon sequestered in the Pongamia trees themselves. DCCEEW has supported the method for development if or when Department resources permit, and we continue to engage with the Department on avenues to progress this method in future.

Contact information

For more details about the Pongamia farm pilot, contact rtec@riotinto.com.

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