Nuseed, Nufarm's subsidiary in seed technology, has agreed to buy BP's North American operation Nuseed Carinata oil. BP will process the oil or sell it into markets that are growing for sustainable biofuels.
Carinata, a non-food crop, can be used to make low-carbon biofuel feedstock. It is independently certified sustainable. It reduces carbon emissions when oil is used to replace fossil-fuelled fuels. International Civil Aviation Organisation has listed the crop as a sustainable aviation fuel source.
BP, which makes renewable diesel from biomass, has a global goal to double its bioenergy portfolio in 2025 and quadruple it in 2030. This is in addition to the 2019 level.
Bioenergy is expected play an important role in helping reach net zero emissions by 2050. , a roadmap released last November by the Australian Renewable Energy Agency, predicted that an enhanced bioenergy sector could be worth $10 million per year and create 26,200 jobs by 2030.
Carol Howle, executive vice-president, trading and shipping, at BP, highlighted the importance of sustainable biofuels in reducing carbon emissions from transport.
"By working together with Nuseed we can use their sustainable foodstock to help decarbonise difficult transportation sectors like aviation, supporting the production sustainable aviation fuel, and other biofuels," said Ms Howle.
The demand for sustainable aviation fuel will increase more than 50 percent to 449 billion L/year by 2050, from 7.9 Billion litres per year in 2025.
Greg Hunt, chief executive of Nufarm, stated that the deal's short-term impact on the company's earnings is positive but not significant. However, it could significantly increase earnings contribution as production increases in the future.
Nuseed will continue to grow and expand its network of growers, supply chain partners and suppliers to Carinata oil to BP and its affiliates. BP will pay Nuseed, subjected to the achievement of milestones that will support the cost of increasing the supply of Carinata oil.
Nufarm stated that Nuseed is currently increasing the commercial production of the crop from Argentina. It is also planning expansions in South America, and the USA, with support from the contract with BP.
The creation of Carinata is part Nufarm’s efforts to develop plant-based solutions that could solve major global problems like climate change or human nutrition.