Through the collaborative efforts and complimentary skills of Lifecycles and CSIRO, we have been able to ensure market access for the 2017 and on-going canola crops, to the lucrative EU biofuel market. This market pays a premium for canola, worth close to $100 million in additional income annually for Australian farmers.
In 2015-16 Australia exported 1,946 kt of canola of which 91% went to the European Union (EU). Exports to the EU in 2015-16 were worth approximately A$850 million. Exported canola to the EU, for use in biodiesel, needs to meet the requirements of the Renewable Energy Directive (RED) for the biodiesel market. This issue was first recognised by the industry in 2015 and they responded (through AOF and AEGIC) by organising a national workshop to explore what response was needed on behalf of the industry. Subsequently both AEGIC and individual grain traders (through AOF) provided funds to support the study undertaken by CSIRO and Lifecycles.
Up until January 2018, biodiesel seed stock must demonstrate a 35% greenhouse gas (GHG) saving compared to fossil fuel, to be accepted in EU market and in the past Australian canola automatically met this target (as a default value of 38% savings in GHG emissions applies to canola).
From January 2018 onwards, Australia can no longer rely on this default value as the EU has introduced an emission saving threshold of 50%. This new GHG savings target applies to the crop planted in autumn of 2017, due to be harvested in November 2017 and shipped to Europe in early 2018.
The EU requirement is for an independent science organisation, within each exporting country, to prepare a Country Report on the GHG emissions associated with the production of biofuel feedstock. These figures are used by grain traders to determine if canola from a particular source will allow the supply chain participants to deliver fuel to the consumer, below the target GHG savings cap. Australian Oilseed Federation and AEGIC sought national expertise to address this issue in late 2015. CSIRO’s response was to bring our expertise in Life Cycle Assessment and national impact assessment to a project partnership, with Lifecycles, that could deliver the science standing and rigor required.
Working in consultation with an industry Steering Committee, CSIRO designed the study needed to meet RED methodology requirements and gathered the data required, while Lifecycles built, tested and implemented a framework to generate estimates of the GHG emissions associated with the growing of canola in each Australian State. This involved the evaluation of many combinations of geographical scale and data sources, while working within the requirements of the RED and to ensure consistency with Australia’s GHG National Inventory Report. The final figures for Australian canola were such that our grain is highly competitive internationally, from a GHG perspective, due to our dryland, low-tillage systems.
After extensive review within Australia and by two European agencies, the resultant Australian Country Report for GHG Emissions for Canola was submitted to the European Commission in August 2016. The report was returned to CSIRO in March 2017 with comments from an internal EU reviewer. Knowing the urgency and importance of this report we (CSIRO and Lifecycles) responded and resubmitted the report within 3 days.
Since that time Sandra Eady has liaised with industry, Federal Department of Agriculture advisors, and Australian DFAT trade officials in Brussels to bring about a timely acceptance of the report so that grain traders could commence forward contracting sales of Australian canola. AOF and AEGIC also contributed to the lobbying in Brussels providing our trade officials with on the ground information about how the lack of data was impacting forward grain sales in late 2017. This has required continual reiteration with Australian officials of the importance to Australian farmers, building an understanding by our trade officials of the consequences of the report not being accepted by late 2017, and pushing to get an interim endorsement of the Australian figures by DG Energy, EC, prior to the Final Implementing Act of the European Commission that was scheduled for December 2017.
The Australian Country Report for GHG Emissions for Canola has set the benchmark for non-EU States, with two other major suppliers into the EU – Canada and Croatia, having their reports returned for further work and revision. Only the Australian Report will go forward for implementation in December 2017.
This achievement not only ensures on-going market access, but also puts Australian canola growers in a highly competitive position for this season’s grain supply.