Nuseed Limited has an offtake and market development agreement with bp which will purchase Carinata oil it plans to process for the production of sustainable biofuels.
Nuseed Carinata is a non-food cover crop that can be used to produce low-carbon biofuel feedstock that is independently certified, sustainable and scalable.
Nufarm CEO Greg Hunt said: “Nuseed Carinata is a great example of Nufarm’s approach to developing innovative solutions to support sustainable agriculture.
“This agreement between Nuseed and bp is validation of Nuseed Carinata’s potential as an advanced, non-food agricultural feedstock for biofuel production.
“As a leading global inputs provider to agriculture, Nufarm is well positioned to help drive and support the expansion of Nuseed’s Carinata platform.
“The agreement supports Nuseed’s Value Beyond Yield strategy and underpins the growth potential of the seed technologies platform. In the short term, the expansion of Nuseed Carinata is expected to be self-funding and the impact to Nufarm’s underlying earnings, while positive, is not anticipated to be material, but it has the potential to significantly increase its contribution to earnings as production ramps up in later years.”
Increased global demand for biofuels is being driven by the need to access sustainable sources of energy to help achieve global greenhouse gas (GHG) reduction targets.
“Sustainable biofuels have a vital role to play in decarbonizing transport,” said Carol Howle, executive vice president, trading & shipping at bp.
“By working with Nuseed, we can use their sustainable feedstock to help decarbonize challenging transportation sectors such as aviation, supporting the production of sustainable aviation fuel (SAF) and other biofuels.”
The agreement is for an initial 10-year term and will see Nuseed continue to develop and expand its existing network of growers, channel and supply chain partners to deliver Carinata oil to bp or its affiliates, with key steps of crop production independently audited and certified. The Carinata oil will be processed by bp or affiliates through its bio refining footprint and also sold into growing markets for the production of sustainable biofuels, utilizing the global reach of bp’s Trading and Shipping (T&S) team to accelerate market adoption of Nuseed Carinata as a sustainable biofuel feedstock.
Under the agreement, bp will make payments to Nuseed, some of which are subject to meeting agreed milestones, that will assist in underwriting the cost of expanding and developing the Nuseed Carinata platform.