Ampol, GrainCorp, and IFM Collaborate to Forge a New Australian Renewable Fuels Industry

On July 30, 2024, IFM Investors, the global fund manager owned by industry superannuation funds, partnered with GrainCorp, a major agribusiness and processing company, and Ampol, Australia's largest transport energy provider, to sign a Memorandum of Understanding. This agreement aims to explore the development of an integrated renewable fuels industry in Australia.

As the first priority under the MOU, Ampol and IFM will advance the feasibility study for a renewable fuels facility at Ampol's Lytton Refinery in Brisbane. They will also work with GrainCorp to explore the supply of locally sourced feedstocks, including the expansion of crushing capacity to produce canola oil for the new plant.

The announcement builds on the ongoing feasibility studies conducted by each party to enhance feedstock supply and production capacity for renewable fuels, including Sustainable Aviation Fuel (SAF) and Renewable Diesel (RD) in Australia.

There is increasing global awareness that renewable fuels can significantly cut emissions in the transport sector, yet Australia currently lacks the substantial production capacity needed to meet anticipated future demand.

Australia is well-positioned to produce and supply the feedstocks essential for building a large and globally competitive renewable fuels industry. This will support decarbonization efforts in challenging areas of the transport sector, including aviation and heavy, long-haul transport.

In 2024, there has been increased momentum for a domestic SAF industry. Ampol, GrainCorp, and IFM commend the Federal Government’s various initiatives aimed at supporting the production of renewable fuels like SAF in Australia.

Danny Elia, Global Head of Asset Management at IFM Investors, stated: “As a leading investor in airports, we are deeply invested in advancing cleaner aviation. We are proud to support this crucial development of a SAF industry here in Australia.

“IFM’s commitment to long-term investment is vital for this emerging sector. We offer the scale, expertise, and reliability needed to assist our distinguished Australian partners, GrainCorp and Ampol, in launching a new industry that will create jobs and stimulate economic growth.

“Alongside our industry super partners, we have been working with the Government to identify strategies for accelerating investment in Australia's energy transition. A local SAF industry driven by Australian businesses is essential to achieving that acceleration.”

Robert Spurway, Managing Director and CEO of GrainCorp, remarked: “GrainCorp is a leading supplier of high-quality feedstocks throughout Australia and New Zealand, including canola oil, tallow, and used cooking oil.

“Australian farmers produce millions of tonnes of feedstocks annually, much of which is currently exported for refining into renewable fuels.

“Developing an Australian renewable fuel refining industry will create a valuable domestic market for our growers and feedstock producers, benefiting regional communities and consumers across the country.”

Matt Halliday, Managing Director and CEO of Ampol, stated; “Australia possesses a strong competitive edge with its infrastructure, technical expertise, and access to raw materials needed to develop a renewable fuels industry.

“Ampol’s existing infrastructure, including the Lytton site, combined with our extensive distribution network, established market channels, and strong customer relationships, positions us to play a crucial role in building a national renewable fuels ecosystem.

“The collaboration between Ampol, IFM, and GrainCorp brings together expertise in complex infrastructure development, manufacturing, distribution, and supply chains.

“This foundational agreement marks a major advancement in establishing a renewable fuels industry in Queensland and across Australia, enhancing energy security, supporting regional development, and stimulating agriculture and manufacturing sectors.”