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Report identifies opportunities and challenges for diversifying Aussie sugarcane revenue streams

A new report commissioned by Sugar Research Australia (SRA) has identified opportunities and challenges for diversifying revenue streams for the Australian sugarcane industry.
“Sugarcane is the economic scaffold for many regional communities in Queensland and New South Wales. It also produces large volumes of biomass, yet we are not extracting the full potential from this biomass, says SRA CEO, Neil Fisher.

Finding a market for bagasse, a  new report commissioned by Sugar Research Australia (SRA) has identified opportunities and challenges for diversifying revenue streams for the Australian sugarcane industry (photo courtesy SRA).

A new report commissioned by Sugar Research Australia (SRA) has identified opportunities and challenges for diversifying revenue streams for the Australian sugarcane industry.

The “Final report: Industry priorities for value add & diversification opportunities in the sugar industry” was prepared by Lazuli Consulting, who worked extensively with Sugar Research Australia (SRA) Members and industry stakeholders to gain a more detailed appreciation around value-adding and diversification within the sugar industry value chain. They also analysed the technological and market landscape in Australia and overseas.

Sugarcane is an incredible crop. In Australia, it is grown across diverse climatic conditions from subtropical New South Wales along the Queensland coast into the Wet Tropics, and it is generally much more resilient to climatic and disease challenges than other crops grown in these regions, said Neil Fisher, CEO, SRA.

Untapped biomass potential

Sugarcane is the economic scaffold for many regional communities in Queensland (QLD) and New South Wales (NSW). It also produces a large biomass, yet we are not extracting the full potential from this biomass. Diversification already plays an important role in the industry through products such as molasses, rum, ethanol, and electricity cogeneration, but this new report by Lazuli Consulting identifies that there are other opportunities for our industry. However, these opportunities may also face considerable challenges in becoming a commercial reality, said Fisher.

Fisher said the report was an initiative of the SRA Board and had also been identified as an industry need at a Futures Forum convened by SRA and industry in April 2018.

Paul Schembri Chairman of CANEGROWERS, Queensland Cane Growers Organisation Ltd (QCGO) an association representing sugarcane farmers in Queensland, welcomed the report as a platform from which the industry can move forward.

As farmers, we are proud of the crop that we produce and the significant amount of biomass it offers as feedstock to new ventures. This report is a good starting point for industry discussions around a more diversified future and the mechanisms by which all sectors can benefit from the rewards that new opportunities present, said Schembri.

Managing Director for Lazuli Consulting, Eris O’Brien, said that the report identified the primary opportunities as electricity cogeneration, ethanol, food products, and densified biomass, and a secondary list of opportunities as specialty chemicals including sugar and animal feed.

He also pointed out that the report reinforced the view that Australia was heavily reliant on raw sugar production when compared with major competitors such as Thailand and Brazil.

Construction costs in Australia are high compared to other sugar-producing countries, and financing projects is difficult without long-term, commercially priced off-take agreements, O’Brien said.

Despite these and other challenges, the report identified the importance of the Australian industry continuing to investigate new technologies and opportunities.

SRA currently invests in this research area through Key Focus Area six of its Strategic Plan: Product Diversification and Value Addition.

This includes a major research project supported by SRA through investment from the Australian Government Department of Agriculture as part of the Rural R&D for Profit program and by the Queensland Government Department of Agriculture and Fisheries.

This research project, led by Queensland University of Technology (QUT), is developing technologies to convert Australian agricultural feedstocks, including from sugarcane, into new value-added animal feeds, chemicals, and advanced fuels. SRA acknowledges the investment contribution from the Queensland Department of Agriculture and Fisheries towards this research activity.

Aeriasl view of sugarcane fields in Queensland, Australia (photo courtesy SRA).

According to CANEGROWERS, sugarcane is an important rural industry for Australia – 4 000 sugarcane farms supply 24 sugar mills with 35 million tonnes of sugarcane annually (photo courtesy SRA).

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