The New England’s rolling fields of bright yellow canola have long drawn tourists each spring, but the crop could soon attract attention for a different reason — helping address Australia’s fuel challenges.
A new report has highlighted canola’s growing potential as a key ingredient in biofuels, as Australia grapples with fuel price hikes and supply disruptions linked to global instability.
The Rabobank report found canola oil is already widely used in the production of biodiesel and could become increasingly important as demand grows for renewable diesel and sustainable aviation fuel.
Report lead author and RaboResearch analyst Vitor Pistoia said global demand for biofuels is accelerating, particularly in sectors like freight and aviation that are harder to transition away from liquid fuels.
“For Australia, this creates a genuine opportunity to rethink how canola fits into both our agricultural system and our energy system,” he said.
Australia currently exports around six million tonnes of canola each year, mostly as raw seed. According to the report, if that volume were processed into renewable diesel, it could produce more than two billion litres of fuel.
That stands in contrast to Australia’s heavy reliance on imported diesel, which exceeds 30 billion litres annually, highlighting what the report describes as a significant imbalance.
“At the moment, we export the raw material and import the finished fuel,” Mr Pistoia said.
“As biofuel demand rises, that imbalance becomes harder to ignore.”
The report outlines two main pathways for the industry: expanding domestic processing capacity to produce biofuels locally, or increasing exports of processed canola oil to overseas refineries.
Demand is expected to be driven by rapid growth in biofuel production across the Asia-Pacific, with countries such as Japan, Indonesia and India investing in renewable diesel and aviation fuel capacity.
The current global fuel supply pressures, including disruptions linked to conflict in the Middle East, are also sharpening focus on energy security and accelerating interest in alternative fuels.
“Reduced energy exports from Persian Gulf countries… have sharpened attention on energy security and the reliance on imported liquid fuels,” Mr Pistoia said.
The report suggests a more diversified demand base for canola — spanning food, feed and fuel — could provide longer-term stability for growers while strengthening Australia’s position in evolving global energy markets.
For local producers, that could mean a shift from simply growing a crop admired for its visual appeal to one increasingly valued as part of the solution to Australia’s fuel future.
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