Mining hardly has a reputation for being a clean industry. Yet, as the pressure intensifies for the sector to clean up its emissions and improve its sustainability – and the usual options of electrification or hydrogen options dominate the conversation – many neglect or even forget to consider the potential that biofuels could have on mining’s sky-high emissions.
There are loud, mainstream calls for the use of biofuels in aviation, with Virgin Atlantic celebrating the first jet powered by 100% sustainable aviation fuel completing its London-to-New York jaunt in November, and Qantas and Airbus jointly investing AUS$2m in a biofuel factory in Queensland that will open in 2026. Yet, in mining, progress for biofuel investment and take-up has been slow.
The pollution paradox
“For the rest of the world, sustainable aviation fuel is the primary focus of governments and the renewable industry around the world. And I’m never, never quite sure why,” argues Peter Chomley. “Sure, airlines are important, but you could argue that the mining industry, [particularly] in Australia, is just as important. But that’s the politics and the publicity of the situation.”
Chomley may have a vested interest in the issue due to his position as the director of Just Biodiesel, Australia’s flagship biofuel production plant, but he also raises a valid point. As a 2020 report by McKinsey Sustainability found, the mining industry is responsible for 4–7% of global greenhouse gas emissions, rising to an even more alarming 28% if taking into consideration Scope-3 emissions from the combustion of coal – aviation, meanwhile, falls at less than 2%.
Mining, however, suffers from a pollution paradox. Despite being an industry with one of the highest carbon credentials, it also plays a pivotal role in the energy transition due to its involvement in sourcing the raw materials required for electric vehicles, lithium batteries and even the infrastructure for renewable energy. It may be an awkward position to navigate, but it is one that also exemplifies the need to overhaul the entire industry.
Back in Australia, there’s another pressing reason that should help encourage mine operators to listen to those arguments, and it uses one of the more effective methods – by pulling at their purse strings. Updates passed into motion in 2023 to the Australian government’s Safeguard Mechanism (SGM) require mining facilities to cut their emissions by 4.9% each year, and those that don’t will be obliged to purchase Australian Carbon Credit Units (ACCUs), with prices set to rise up to US$75 per tonne of CO2.
Yet, beyond the public and economic pressure, decarbonisation options within the sector are limited. As Chomley notes, when speaking about alternative renewable pathways, electrification is often the first option that comes to mind. “So, they put in solar panels and they put in wind turbines and they use that electricity to run the mine. But it’s not that simple,” he argues. “Because if the wind doesn’t blow or the sun’s not out, then you have to have battery storage or additional diesel generators.”
Meanwhile, electric haulage trucks remain a far way off, mostly due to the currently limited battery capacity that is unsuitable in larger vehicles. “And if they stop halfway up a hole, then you have a problem. How do you raise that up?” While some mining operators, such as the Fortescue Metals Group, are investing in hydrogen projects, this pathway remains out of sight for the majority of the industry, at least not without extensive capital costs as well as meticulous maintenance requirements. Another important point raised by Chomley is the return on any investment in renewables: “If the mining site only has a life of ten years, you’d have to look at the economics to [see] whether it’s justified to have to invest in a large, renewable energy complex for a mine with a limited life.” With this in mind, this is why biofuels could offer a full – or at the very least part of the – solution.
A perfect blend
When speaking about biofuels, there are two types primarily used by heavy machinery. Typically, biodiesel, made from vegetable oils and animal fats, is used as an alternative fuel to diesel, while bioethanol, made from sugarcane or corn, is mostly used in place of petrol in transportation. As dieselfueled internal combustion engines are the primary source of power for the majority of the industry – in Australia alone, the industry accounts for 33% of diesel consumption, at around 10 billion litres – this explains why most conversations concerning biofuel use in mining focus upon biodiesel.
Even within biodiesel, different feedstocks and levels can create a product that varies with distinct qualities. Refined vegetable oils, particularly soybean oil and canola oil, have been the most common biodiesel feedstock types in the US, with soybean oil accounting for about half of biodiesel feedstock inputs between 2014–2017, over which period it increased in use by about 30%.
As the company’s name suggests, Just Biodiesel focuses on biodiesel production for ESG-focused customers, primarily supplying local mines with strict, yet achievable, net-zero targets. As Chomley explains, the company “takes any type of feedstock – and I say any type of organic feedstock because I can take tallow, used cooking oil, vegetable oils”, where “[feedstock] can be of low quality, and the product that comes out of this is a fit for us at a high quality”. Biodiesel is then often blended with petroleum diesel in percentages ranging from 5–20% biodiesel, or B5–B20. In the US, the federal programme dubbed the Renewable Fuel Standard mandates the blending of biofuels into the nation’s fuel supply and has generally encouraged higher biodiesel blends through targets that have increased over time.
In addition to a host of other benefits, such as increased lubrication and potentially prolonging the lifetime of certain engine components, this ability to blend with petroleum diesel is itself one of the key advantages to using biodiesel – and is perhaps the one of most interest to the mining sector. In essence, it functions as an almost like-for-like substitute for regular diesel. Using a biodiesel blend does not require purchasing new equipment nor any updates or modifications to existing equipment or facilities, instead, it is used directly in typical diesel production engines. This makes biodiesel a renewable option that is both commercial with an immediate impact. “A man could ring me tomorrow, and we could be shipping in biodiesel to them in a matter of weeks,” Chomley notes. “There are not many other solutions that [mine operators] could do that have anywhere near that sort of lead time.”
The only associated cost is buying the biodiesel itself – which, granted, remains the largest and most difficult obstacle to overcome. The limited availability of current biodiesel production means there is, of course, a finite amount of resources compared with petroleum diesel, driving up the prices of biodiesel in comparison. Then there are additional issues with taxation, which hikes up prices even further.
“In Australia, there’s no excise on diesel used in mining. So, companies get the full diesel exhaust rebate and basically, they’re just paying what you use,” adds Chomley. “The excess on mineral diesel is AUS$0.50 a litre, while the excise on biodiesel is AUS$0.10 a litre. But in both cases, the customer can claim the full rebate. So that’s a significant benefit for diesel users.”
He explains that this typically pushes petroleum fuel prices to around AUS$1.50 per litre while biodiesel would be around AUS$2. With margins like that, you can understand why the economic argument remains the hardest to overcome and convince a mining operator. “Over the years, people have suggested that the government should reinstate and remove the excess rebate, but you can imagine the publicity for the mining industry. The average diesel car user is paying the full excise. They may argue, well, why shouldn’t the mining industry pay?” counters Chomley.
Despite the financial burden, this hasn’t stopped the larger mining operators from experimenting with biofuels. In May 2022, Rio Tinto announced a partnership with BP in which they trialled sustainable biofuels to power its marine fleet for 12 months. Using a combination of fatty acid methyl esters – a fuel derived from recycled cooking oils – and very low sulphur fuel oil, Rio Tinto hoped it would reduce its emissions by 26% in comparison with standard marine fuel oil.
Earlier this year, BHP announced it was trialling the use of hydrotreated vegetable oil (HVO) to power equipment at its Yandi iron ore operations in Western Australia. It is part of BHP’s target to reduce operational greenhouse gas emissions by at least 30% by financial year 2030. While the company ultimately looks to overhaul its current operations with a fully electric trucking fleet at its sites, since around 40% of its current operational greenhouse gas emissions come from using diesel fuel, biofuels like HVO – which reduce emissions by as much as 90% compared with traditional fuel – will help to keep BHP in line with that 2030 target until the electrification transition can take place. While the results of either trial are yet to be publicly announced, it is hoped that, if successful, biofuels could be widely implemented across the fleets.
A brighter, greener future
Back at Just Biodiesel, its Barnawartha plant has a 60 million litre capacity, making it one of the largest biodiesel plants in Australia. It was reopened by Just Biodiesel in 2019, three years after the plant was forced to close when its previous operators fell into administration. At that time, former owners Australian Renewable Fuels pointed the finger at the federal government for the collapse, when taxation was placed on biofuels in 2014 despite previous legislation outlining renewable fuels would be excise-free until 2021. And, as Chomley confirms, those same issues continue to hold back Australia’s biodiesel production and adoption today.
Yet, Chomley is hopeful that this will soon change – and that optimism might not be misplaced. Just in November, at Cop28, the Australian government announced it would triple renewables, including biofuels, produced within the country to join a worldwide effort to triple global renewable capacity by 2030. And as Bioenergy Australia – the peak body representing Australia’s bioenergy industry – argues, a national biofuel industry could create more than 8,000 direct and indirect jobs, as well as contribute more than AUS$1bn to regional communities.
Nevertheless, every percentage, no matter how small, of diesel used in the mining industry that can be substituted with biodiesel will have an impact. As Chomley concludes, “If we could get biofuels to gain 1% of the mining diesel usage, that’d be a good outcome.” That 1% may sound small, but in numbers, that’s 100 million litres of fuel replaced and its subsequent emissions prevented from going into the atmosphere. The arguments for biofuels seem conclusive, now it is time to convince those who can provide the required support and investment to help take it off – or should I say into – the ground.
This article first appeared in World Mining Frontiers magazine.
