A Technical and Economic Appraisal of Pongamia Pinnata in Northern Australia

A technical and economic appraisal of Pongamia pinnata in northern Australia

Preliminary report

August 2021 by P. Wylie, P. Gresshoff, G. Muirhead, S. Fritsch, R. Binks and K. Bowman

A technical and economic appraisal of Pongamia pinnata in northern Australia

Preliminary report

by P. Wylie, P. Gresshoff, G. Muirhead, S. Fritsch, R. Binks and K. Bowman

August 2021

ISBN 978-1-76053-192-8 ISSN 1440-6845

A technical and economic appraisal of Pongamia pinnata in northern Australia – Preliminary report Publication No. 21-085 Project No. PRJ-013030

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Researcher contact details

Dr Peter Wylie 4 Alfred St Dalby QLD 4405

0429361301 [email protected]

In submitting this report, the researcher has agreed to AgriFutures Australia publishing this material in its edited form.

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Electronically published by AgriFutures Australia at www.agrifutures.com.au in August 2021

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Foreword

Pongamia (Millettia pinnata, formerly known as Pongamia pinnata) is a tree that produces seeds with a high oil content that can be converted into biodiesel.

Pongamia is a second-generation biofuel producer that does not compete directly with food production. It will grow on soils not suited for broadacre crops and will tolerate salinity and flooding. More importantly, Pongamia is a legume that supplies its own nitrogen, has low costs and high energy efficiency.

There is an urgent need for renewable transport fuels in Australia, not only to curb greenhouse gas emissions but for fuel security and to create new jobs as the coal industry closes down.

A high-protein meal is produced when oil is extracted from the Pongamia seed. When used as a feed supplement, this product can reduce methane emissions from livestock and help restore nitrogen- depleted grazing lands in northern Australia.

A new appraisal of Pongamia is needed because previous studies have not put any value on revenue streams other than oil. In recent years, treatments have been developed to make the protein meal useful as a stock feed. The use of the pods as a biomass fuel and the significant amounts of carbon sequestered also need to be considered.

This report is a preliminary economic study that can be used as the foundation of a Pongamia industry viability assessment. The economics of Pongamia have changed in recent years with clonal propagation and treatment of the meal so it can be used as livestock feed. This new-look Pongamia compares well economically with other agricultural enterprises, however further research and analysis are needed to validate and fully profile the economic feasibility of a commercial Pongamia industry.

Technical aspects of agronomy, processing and the need to commence at a scale sufficient to justify a processing plant are also considered.

This report is an addition to AgriFutures Australia’s diverse range of research publications. It forms part of our Emerging Industries Program, which aims to accelerate the development of viable animal, plant and aquaculture industries.

Most of AgriFutures Australia’s publications are available for viewing, free downloading or purchasing online at www.agrifutures.com.au.

Michael Beer General Manager Business Development AgriFutures Australia

About the authors

Dr Peter Wylie is one of a small group of people who have been involved in research and early-stage development of Pongamia in Australia. He was involved in a plantation of Pongamia established near Roma, Queensland in 2010. He has been an agricultural consultant for many years, specialising in farm management and economics.

Other people who contributed expertise on Pongamia to the project were George Muirhead, of BioEnergy Plantations Australia, and Emeritus Professor Peter Gresshoff, who researched Pongamia for many years at the University of Queensland.

Dr Wylie was assisted by Simon Fritsch, the Principal of Agripath Consultants, along with colleagues Rob Binks and Kim Bowman, who have extensive experience in the economics and assessment of project viability.

Collectively, the team has a considerable amount of experience in research and the production of Pongamia.

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Abbreviations

ABS Australian Bureau of Statistics

C Carbon

CO2 Carbon dioxide

CO2e Carbon dioxide equivalent

CPI Consumer Price Index

dS/m decisiemens per metre – measure of salinity

Et Evapotranspiration

ESP Exchangeable sodium percentage

FAME Fatty acid methyl ester

GVP Gross value of production

GST Goods and services tax

HEFA Hydro-processed esters and fatty acids

HVO Hydro treated vegetable oil

ML Megalitre – one million litres

MLA Meat and Livestock Australia

NOx Nitrous oxide

NRS National Residue Survey

NSW New South Wales

QLD Queensland

RIN Renewable Identification Numbers (California’s renewable energy program)

R&D Research and development

RFS Renewable Fuel Standard

RIRDC Rural Industries Research and Development Corporation

SOC Soil organic carbon

USD United States dollar

Contents Foreword ...... ii About the authors ...... iii Abbreviations ...... iv Executive summary ...... vii Introduction to Pongamia ...... 1 Potential profit from Pongamia ...... 2 Pongamia and climate change ...... 9 Yield and management of Pongamia ...... 10 Propagation and planting ...... 14 Bees and pollination ...... 20 Agronomy of Pongamia ...... 22 Climate, irrigation and soils ...... 25 Harvesting and pruning ...... 29 Marketing biodiesel feedstock ...... 31 Carbon production and pricing ...... 33 Processing and selling the protein meal ...... 35 Processing seed and detoxification of meal ...... 37 Using the pods ...... 41 Other potential uses and byproducts ...... 43 Pathways for Pongamia development ...... 45 Implications for potential stakeholders ...... 47 Appendices ...... 49 References ...... 54

Tables

Table 1. Income and expenses at full production in years 12 to 40...... 3 Table 2. Discounted cash flow, Pongamia project of 5000 hectares – the first six years...... 4 Table 3. Capital costs for a 5000 ha Pongamia plantation and processing plant...... 5 Table 4. Sensitivities in the economics of Pongamia production...... 7 Table 5. Cost calculations for the production or purchase of trees...... 19 Table 6. Composition of seed cake and nutrient removal (Osman, 2009)...... 22 Table 7. Water balance of Pongamia at ICRISAT (Hyderabad) for a 10-year simulation period...... 26

Figures

Figure 1. Price of biodiesel feedstocks in Europe...... 6 Figure 2. (a) 13-year-old elite Pongamia tree; (b) Six-year-old clone – with good seed...... 10 Figure 3. Pongamia trees at Kununurra. The best tree yield was 36 kg of seed...... 10 Figure 4. (a) UQ1 on the St Lucia campus; (b) Large seeded elite tree candidate...... 11 Figure 5. (a) Seed weight; (b) Oil content in developing seeds and oil composition...... 13 Figure 6. Vegetative propagation and the effect of IBA on the rooting of cuttings...... 15 Figure 7. Pongamia trees being propagated from cuttings...... 15 Figure 8. Budding shown in (a) resulted in the vigorous shoots shown in (b)...... 16 Figure 9. Using small cuttings, rather than more mature wood, requires less ‘elite’ stock...... 17 Figure 10. Several planting machines might be required to plant one million trees in 100 days...... 18 Figure 11. Red shoulder leaf beetle...... 24 Figure 12. Leaf miner damage...... 24 Figure 13. Water balance of Pongamia at ICRISAT (Hyderabad) for a normal rainfall year...... 26 Figure 14. (a) Pongamia trees on mined land, Queensland; (b) Native trees on mined land. Grass was growing well where Pongamia was enriching the soil with nitrogen ...... 27 Figure 15. Pongamia trees damaged by frost...... 28 Figure 16. The Tenias harvester in almonds. Figure 17. The Colossus harvester is used for olives...... 30 Figure 18. Tree-pruning machine. Figure 19. Tenias grab-and-shaker bar ...... 30 Figure 20. Price of biodiesel on world markets...... 31 Figure 21. Steps in the processing of Pongamia seed...... 37 Figure 22. Pongamia decorticator. Figure 23. Prototype Pongamia decorticator...... 38 Figure 24. Investancia’s Pongamia Research and Propagation Centre, Paraguay...... 49

Executive summary

This is a summary of a preliminary technical and economic appraisal of the oilseed tree Pongamia pinnata in northern Australia

Pongamia is a fast-growing tree that produces a seed with about 40% oil. But while the main interest in Pongamia is to produce renewable biodiesel to help combat climate change, there are other products and benefits associated with the tree, including high-protein food supplements for livestock, jobs to replace those being lost in the coal industry, and northern Australia development.

A Pongamia oilseed industry is close to being ready for major development in Australia. While there are no commercial plantings in Australia, there has been a significant amount of research over the past 20 years, which has assisted the first major project, underway in Paraguay.

Technical information compiled in this report indicates there is a lot known about producing Pongamia trees and growing the crop. Further research will help improve yields and solve problems as they appear along the way.

A preliminary economic study provides the foundation for a Pongamia industry viability assessment. The economics of Pongamia have changed in recent years with clonal propagation and treatment of the meal so it can be used as livestock feed. This new-look Pongamia compares well economically with other agricultural enterprises, however further research and analysis are needed to validate and fully profile the economic feasibility of a commercial Pongamia industry.

There is a need for renewable fuel in Australia to help reduce greenhouse gas emissions. Pongamia oil is a second-generation biofuel feedstock without the issues of food security that surround canola and soybean and the destruction of rainforest, which continues for the planting of palm oil.

Any comparison of alternative fuels should not just be about which is cheaper. According to reports from Europe and California, which are more advanced than Australia in programs to fight climate change, liquid fuels such as biodiesel are going to be needed for many years to come, and there is a major expansion in refining capacity underway. There are many other benefits from Pongamia production, including northern Australia development, jobs, and reducing methane emissions from livestock.

Pongamia can be grown on pastureland in coastal Queensland and across northern Australia without reducing beef cattle production. This is a result of feeding the Pongamia meal to cattle and the benefits of extra nitrogen in the grazing ecosystem.

An important advantage of Pongamia is that it is a legume capable of producing its own nitrogen. This reduces the cost of production and improves carbon efficiency. Costs remain low because a Pongamia tree can stay in full production for more than 50 years. Pongamia oil has been calculated to be three times less carbon-intensive than soybean oil.

The University of Queensland has researched Pongamia for 15 years, and there have been trial plantings at Roma, Gatton, Toogoolawah, Caboolture, South Johnstone, Atherton, Darwin and Kununurra. A large amount of information and practical knowledge is available, and while more research is desirable on several issues, there is enough known about Pongamia to support more detailed investigations into commercial development.

Past economic studies have not helped Pongamia, but two developments in recent years have changed the outlook for Pongamia production. Firstly, there has been recognition that planting trees developed from seed leads to high variability of trees and yields in a plantation. Much higher yields can be obtained by identifying elite lines and using clonal propagation to maintain the genetics. There is now a lot more information and practical experience on clonal propagation.

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Secondly, past studies have not put any value on revenue streams other than oil for biodiesel. In recent years, treatments have been developed to make the protein meal useful as a stock feed. The value of the pods as a biomass fuel and the carbon sequestered by the trees has also not been considered.

In the preliminary economic study, a 5000-hectare project was selected to justify the investment of $28 million in a plant that processes the seed to produce pods, oil, and protein meal suitable for livestock. Such a project is estimated to cost $116 million, but with an operating profit in the vicinity of $15 million once trees have reached full production, there is an annual return on investment of 13%. This is a one-year snapshot and the Internal Rate of Return, which takes into account the early years of project establishment, is 9.4%. This return is very good when compared with other agricultural industries.

Pongamia has important features that make it sustainable as a second-generation biofuel crop. It will grow on soils not suited for broadacre crops and where there is salinity and flooding. More importantly, Pongamia is a legume and can supply its nitrogen requirements. This results in low costs and high energy efficiency.

Despite these considerable advantages, Pongamia languishes on the sideline as a climate change solution.

If further investigations confirm the assumptions of the preliminary economic study, then the viability of Pongamia production is no longer a problem – production can be very profitable. The main barriers to government support and commercial investment are likely to be the novelty and complexity of growing a tree to produce oilseed and a host of by-products.

Pongamia deserves more research support, not only into production but into the use of by-products for medicines and safer insecticides. Pongamia has been used for medicinal purposes in India for many years, and the sludge removed from the oil may one day be the most valuable part of its production, offering new pathways to combat bacterial and viral infections. Indian researchers have also developed safer insecticides for the control of grain insects and mosquitoes from compounds extracted from crude Pongamia oil.

Who is likely to take up Pongamia?

Like for cotton and sugar production, a large area of Pongamia needs to be grown to justify the cost of the processing plant. Although the cost of a 5000-hectare project is in the vicinity of $100 million, there are many energy and agricultural firms that could undertake such projects, either alone or in a joint venture.

Such a project would complement a large cattle property or group of properties, providing income from oil and a large supply (about 20,000 tonnes per annum) of protein meal for cattle and 36,000 tonnes of pods, which could be gasified to provide back-up power to a local solar farm. Pongamia is one of the few options that could produce a profit from moving to carbon-neutral beef production.

A large Pongamia project may also fit well with coal miners and power generators. In some cases, there are land and water assets available that could reduce the project cost by as much as 50%. Pongamia has been demonstrated to grow well in rehabilitated mines, and is one of the few options that could make a profit in such a situation.

It is likely that some companies would consider their expertise to be lacking to manage such a project, and that agricultural companies would offer such services and/or become involved in joint ventures. Such an arrangement has been demonstrated to work in the almond and olive industries.

Once processing plants have been built, there will be opportunities for smaller areas of Pongamia to be grown and for growers to have their seed harvested and processed on contract. In some cases,

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growers may reclaim their meal for feeding cattle, in much the same way as what happens in the cotton industry.

Pongamia is suited to the northern tropics, in a huge swathe of land from west of Mareeba in Queensland to Broome in Western Australia, where conventional agriculture has many problems and examples of failure. In the Northern Territory, for example, there is a large area of land from just south of Katherine to Darwin with annual rainfall of more than 800 mm, and there is the potential to supplement this with a small amount of irrigation from underground water or water harvesting.

There is also potential in large areas of coastal Queensland, from Kilcoy to Cooktown, where beef cattle production is in slow decline due to nitrogen deficiency.

The general population of Australia will benefit from Pongamia development as a result of the contribution Pongamia will make to economic development and to managing climate change.

Key findings

Key findings of the technical aspects and agronomy include a change in approach to Pongamia production in recent years with the use of clonal propagation.

Seed yield per hectare is the main driver of profit. There is data to show Pongamia trees are capable of producing 30 kg of seed, which is 12 t/ha if there are 400 trees/ha. With an oil content of 40%, this is about 5000 L of oil per ha per year. A more conservative yield of 3000 L/ha has been adopted for the economic model.

The other change in recent years is to treat the meal from the seed so it is suitable for livestock. The meal component of Pongamia is almost 60% of the seed yield, or 7.2 t/ha for a seed yield of 12 t/ha. The product appears similar to cottonseed meal and has a value of $380/t. The income from the meal at the conservative yield figure of 4368 kg/ha is $1658/ha.

Income from carbon generated by oil substituting mineral diesel and from carbon sequestration by the trees is significant, while there is further potential from the use of pods as a biomass fuel and for the meal to reduce methane production by cattle. In the case of trees, however, carbon sequestration is mostly going to occur between year 2 and year 15, with reduced growth after this period when the tree canopy has filled in the space available.

Carbon taxes on imports to Europe and the United States (US) will encourage firms and groups like beef producers to scramble to put together schemes to go carbon-neutral and avoid ‘global’ carbon taxes.

It is one thing to say Pongamia is drought-tolerant and will grow on all sorts of problem soils, but rainfall and soils are still important for optimum yields. The available data suggests that rainfall plus irrigation water available should exceed 950 mm per annum, in conjunction with a soil water-holding capacity of 150 mm.

Pongamia is drought-tolerant, but irrigation will ensure better establishment, good yields in early years (years four to eight) and may boost flowering in dry years. It can make up for poor soil water storage in some situations. In the summer rainfall areas of the northern tropics, some irrigation during winter is likely to boost seed weight and therefore boost yield.

Pollination by bees is critical for good flowering and yields. Pongamia is reported to produce good- quality honey and there is potential to attract beekeepers to place hives or for honey to be a lucrative by-product.

Planting at a higher density will increase yields of seed per hectare in early years. From years four to eight, per hectare yield from 600 trees will be almost double the per hectare yield from 300 trees.

Higher density will help to prevent trees getting too big (in trunk size and height) for shaker-type harvesters (e.g., Tenias), and will delay the need to prune. The main disadvantages are the cost of the trees and that more stems per hectare will slow harvesting somewhat if the harvesters can only shake five trees per minute.

Harvesting is very slow, at five trees per minute. It will take two hours to harvest 1 ha, and in 30 days with 20 hours per day, one harvester will cover only 300 hectares. Sixteen harvesters will be needed for 5000 hectares, with extra capacity required if downtime due to rain is expected. Further consideration is needed of opportunities to extend the harvest period of Pongamia by planting varieties with a different maturity or flowering window, or of using abscission chemicals. At the same time, there is a need to consider pruning requirements and avoiding damage to the developing buds.

Implications for potential stakeholders

There are many pathways for Pongamia development that could involve individual companies, a group of beef producers getting together with a stockfeed company, or a community joint venture to start a Pongamia project.

Whatever the pathway, a detailed feasibility and financing study should independently examine and corroborate the assumptions and projections. The data in this report and reference material may be a good starting point for this process.

Pongamia has significant benefits to help combat climate change and for economic development. Unlike solar, wind and hydrogen, there are significant ongoing jobs in Pongamia production, and these jobs will be spread across northern Australia. Georgetown, Katherine and Kununurra could become important production centres for Pongamia. This suggests both state and federal governments are likely to be interested in Pongamia.

Incentives or grants may help the industry start and help investors overcome the reluctance of building the first major project. There is no reason why Pongamia should be less worthy for the assistance and incentive grants that solar and wind projects have received in the past, and batteries and hydrogen in the future. By way of example, three hydrogen projects were recently awarded a total of $105 million in grants. The economic stimulus from Pongamia is likely to repay government assistance in the form of taxes of various kinds. For starters, as much as 30% of the development cost of a Pongamia project is likely to come back to the government via income tax, payroll tax, fuel tax and GST. A feature of Pongamia is that it is ‘home-grown’ and is not simply a project that installs equipment made overseas.

State governments are also interested in biofuels and economic development, and may have additional roles with regards to the regulatory areas of tree clearing, water management and environmental permits.

Pongamia appears close to being ready for commercial development and the preliminary economic assessment shows promise. The second stage of this technical and economic appraisal will look at several aspects of production and economics in more detail. There is a need for more definitive data on yield, more information on the treatment of the meal and its use as a livestock feed, and insight into the capital and operating costs of a processing plant. Further research will improve the information available on growing Pongamia and its viability.

Introduction to Pongamia

This report presents the preliminary findings of a technical and economic appraisal of the oilseed tree, Pongamia pinnata, in northern Australia.

First-generation biofuel feedstocks have been food crops such as soybean, corn, sugarcane and rapeseed or canola. It is now generally accepted that food crops or land used to grow food crops should not be used for the production of biofuels.

Along with the inevitability of food shortages, there is the issue of rainforest destruction, with cleared land being planted to pasture, oil palm, soybean and sugarcane in Brazil, Indonesia, and Ghana.

The University of Queensland has researched Pongamia for 15 years, and there have been trial plantings at Roma, Gatton, Toogoolawah, Caboolture, South Johnstone, Atherton, Darwin and Kununurra. A large amount of information and practical knowledge is available, and while more research is desirable on several issues, this report can provide a starting point for more detailed investigations into commercial development.

There are no commercial plantings of Pongamia in Australia, but trees are being planted commercially in Paraguay and in the US states of Hawaii and Florida. In Paraguay, Pongamia is being planted as a reafforestation of pastures. In Hawaii, Pongamia is being planted on land where it is now uneconomic to grow sugar cane, while in Florida, it is replacing citrus devastated by disease.

Two developments in recent years have changed the economics of Pongamia production. Firstly, there has been recognition that planting trees developed from seed leads to high variability of trees and yields in a plantation. Much higher yields can be obtained by identifying elite lines and using clonal propagation to maintain the genetics. There is now a lot more information and practical experience on clonal propagation.

Potential profit from Pongamia

The potential profitability of Pongamia is very good if income from oil and the by-products is accounted for, and the supply of Pongamia seed from a project or several farms is large enough to provide sufficient throughput for a plant to process the seed economically.

A snapshot of profit from a 5000 ha Pongamia project costing $116 million, when the trees have reached full production in year 12, is shown in Table 1.

Table 1. Income and expenses at full production in years 12 to 40.

Profit from a 5000 ha project of 3,000,000 trees

All prices and expenses in 2021 values

kg/tree % of L/ha, Income/kg, Income/ha Annual seed kg/ha Income/L income

INCOME

Oil (biodiesel feedstock) 12 38% 3040 1.05 $3,192 $15,958,404

Meal 12 60% 4363 0.38 $1,658 $8,290,080

Pods 12 100% 7272 0.05 $364 $1,818,000

Carbon credits: trees 15 3.667 33333 0.02 $667 $3,333,303

Carbon credits: diesel 9.5 3.667 21111 0.02 $422 $2,111,092

Agistment of land for beef cattle* 3% 3000 $90 $270,000

TOTAL INCOME $31,780,879

Expenses/ha Annual expenses

EXPENSES

Fuel, repairs and maintenance $360 $1,800,000

Slashing, weed and pest control, irrigation $170 $850,000

Fertiliser $85 $425,000

Harvest, fuel, repairs, casual labour $250 $1,250,000

Pruning of trees – every second year after year 11 $60 $300,000

Seed, meal and oil processing $800 $4,000,000

Labour – employees: 24; salary: $80,000 $1,920,000

Vehicles, housing, general repairs and administration $1,600,000

TOTAL EXPENSES $12,145,000

GROSS PROFIT $19,635,879

Potential tax $3,584,918

Depreciation $3,340,795

OPERATING PROFIT after tax and depreciation $16,050,960

CASH PROFIT RETURN ON CAPITAL, YEARS 12 TO 40 13.8%

Income is calculated to be $31 million, of which oil contributes 52%, protein meal 26%, pods 6% and carbon 16%. Costs amount to $12 million, leaving an operating surplus of $19 million. which declines to $16 million. after allowing for tax and depreciation.

This profit, from year 12 to year 40, represents a return of 13.8% on the $116 million of capital required for the project, while the Internal Rate of Return (IRR), which takes into account the low income at the start of the project, is 9.4%. The financial model shows a net present value (NPV) of $272 million. This is a good result for agriculture, and particularly in traditional industries, such as grain farming and beef cattle production, where a return on capital in excess of 5% is difficult to achieve, due to ongoing increases in land prices.

Although full production is not achieved until year 11 or 12, cash flow commences earlier with income from livestock agistment and carbon. The first harvest is likely in year 4. The project becomes cash flow positive in year 5, as shown in the first six years of the discounted cash flow in Table 2.

Table 2. Discounted cash flow, Pongamia project of 5000 hectares – the first six years.

NPV $ 271,584,710 40 years IRR 9.40% 40 years Year 1 Year 2 Year 3 Year 4 Year 5 Year 6

Direct costs 1,222,500 1,387,088 1,182,971 3,166,923 5,289,114 5,812,378 Overhead costs 1,755,000 1,984,325 2,014,090 3,257,288 3,306,147 3,355,740 Total costs 2,977,500 3,371,413 3,197,061 6,424,211 8,595,262 9,168,118

Income 120,000 331,629 635,529 5,883,805 11,820,524 15,414,271 Operating profit - 2,857,500 - 3,039,783 - 2,561,532 - 540,406 3,225,262 6,246,153

Depreciation 1,284,000 1,252,500 3,401,430 3,350,447 3,300,993 3,271,108 Taxable income - 4,141,500 - 4,292,283 -5,962,961 - 3,890,853 - 75,731 2,975,045 Carry forward losses - 4,141,500 - 8,433,783 - 14,396,745 - 18,287,597 - 18,363,329 -15,388,284 Tax - - - - - Profit after tax - 2,857,500 - 3,039,783 - 2,561,532 - 540,406 3,225,262 6,246,153 Capital in - - - - - 504,169 Capital out 75,610,000 9,090,000 32,192,160 - - 756,253 Cash flows - 78,467,500 - 12,129,783 - 34,753,692 - 540,406 3,225,262 5,994,069

In this preliminary economic study, the example used is for a standalone project of 5000 hectares of Pongamia, established with its own plant producing oil as a feedstock, with a capital cost of $28 million (See Table 3 for details). With only a little more size and cost, this plant could process 70,000 tonnes of seed, which would be more efficient and reduce processing costs.

As an example, MSM Milling in Manildra NSW has grown from a small operation on a farm into a $17 million oilseed processing and packaging plant that employs 40 people, with an annual throughput of 110,000 tonnes of canola and other oilseeds, according to an NSW Investment Case Study in 2013.

The use and the value of the seed pods, which make up 50% of the 14 t/ha harvest of Pongamia, are of value as a biomass fuel. Several options are presented later, but in the first instance they are likely to be used as a heat source for the processing plant. The MSM plant does not have pods to burn, but in 2019 commissioned a $5.38 million biomass-fuelled boiler to replace three LPG boilers for the processing of oilseeds. The boiler is fuelled by wood waste.

Some of the capital cost items for a Pongamia project are very site-specific and will vary according to the costs of land and the development of water storages or underground water supplies. In some locations, irrigation will not be needed. The capital cost will also depend on the scenario for development. For example, if a group of cattle producers or a large pastoral company with a number of cattle stations decided to plant Pongamia, there may be no need to purchase land, and some water supplies for irrigation may already be available.

Table 3. Capital costs for a 5000 ha Pongamia plantation and processing plant.

Capital requirements Year Year Year 1 2 3 Land 3000 $/ha $24,000,000 Trees – year 1 6 $/tree $9,090,000 Trees – year 2 6 $/tree $9,090,000 Planning, infrastructure 420 $/ha $2,100,000 Land preparation 350 $/ha $1,750,000 Water, dams, bores 1,750 $/ML $17,500,000 Drip irrigation 3,500 $/ha $17,500,000 Sheds, housing 500 $/ha $2,500,000 Plant and vehicles $1,170,000 $7,340,000 Seed/meal store shed 78 $/t $5,672,160 Seed separation, crush, 150 $/t $5,454,000 Oil extract, meal detox. 250 $/t $9,090,000 Oil storage (4000 t) 250 $/t $1,000,000 Contingencies 150 $/t $3,636,000 Total capex $75,610,000 $9,090,000 $32,192,160 Capex cumulative total $84,700,000 $116,892,160

Profit variables

The values used for yield and income from oil and by-products are conservative and there is potential is to achieve higher profits from Pongamia. Yield could be improved if good varieties are selected and the trees are managed well. The prices for oil and carbon have risen sharply in the first half of 2021 and may continue to rise as more countries implement plans to become carbon-neutral by 2050.

Yield of seed

The most important variable is the yield of seed. The financial model shows a 30% rise in the NPV for a 25% rise in yield: from 24 kg seed in pod per tree to 30 kg/tree (Table 4). The conservative yield of 15 kg seed/tree used in the model is about 50% of the potential yield (Muirhead and Biswas indicated 30 kg seed/tree in south Queensland, while Barbour measured 36 kg at Kununurra) and allows for some climate, soil and management issues. At a density of 417 trees/ha, this yield is 6.25 tonnes of seed/ha and 2375 litres of oil/ha.

High-density planting (6 m x 2.75 m = 606 trees/ha) is now being considered to improve income in years 4 to 12 and to aid in the management of trees. A yield of 12 kg/tree is conservative for the higher density of 606 trees/ha, which results in a seed yield of 7.2 t/ha.

For seed yield, the main risks relate to flowering. A lack of bees for pollination can reduce flowering, as can rainy weather during the flowering period, which reduces foraging by bees. Severe drought, as experienced in 2019, will also impact flowering.

In the higher-rainfall areas of coastal Queensland, where annual rainfall is in excess of 1200 mm, this risk of rain at flowering is higher than further inland, where annual rainfall quickly drops below 1000 mm. The lower-rainfall areas also appear to have less disease and fewer pests, if observations at Caboolture (1400 mm) and South Johnstone (near Tully,2700 mm) are anything to go by. Red shoulder beetles and leaf miner have been serious enough to affect yields at Caboolture, but not at other drier locations.

Feedstock oil price

The price for renewable diesel has increased in 2021 as countries start to implement plans to be carbon-neutral by 2050. The palm oil price in Rotterdam in May 2021 was $US1200/t, which equates to $A1.29/L (see Figure 1). The calculation is: 1 tonne = 1016 litres water/0.85 oil density = 1195 litres oil. $US1200 / 76c = $A1538 / 1195 = $A1.29/L).

The price of biodiesel on world markets in May 2021 was approximately $US1600/t, which equates to $A1.71/L. The calculation is: 1 tonne = 1195 litres oil. $US1600 / 78c = $A2,051 / 1195 = $A1.71/L.

Figure 1. Price of biodiesel feedstocks in Europe. Source: neste.com/investors/market-data/palm-and-rapeseed-oil-prices#19d53655

With the price for oil as a feedstock for biodiesel above $A1.20 per litre, biodiesel will not be sold in Australia without a major change to the incentives or carbon price. Australian feedstock oil or the biodiesel produced from it will be exported to Europe or the US.

Biodiesel cannot compete on price with diesel in Australia with current feedstocks. A biodiesel plant in Australia would need to procure oil at 55 c/L to compete with diesel prices, which in April 2021 were 116 c/L (including GST) terminal gate price and 135 c/L (including GST) at the bowser.

Selling the meal

Treated meal should have a similar quality and value to cottonseed meal. Prices for cottonseed meal vary according to demand, which goes up in dry seasons and drought. In 2018, prices surged from

$350/t in early May to $650/t in June as the 2018-19 drought worsened. (James Nason, Beef Central, 11 July 2018). Prices continued to rise above $700/t in 2019. They have come back with the end of drought, but are still in the vicinity of $600/t.

A price of $380/t for Pongamia meal used in the economic model reflects a ‘good season’ price of cottonseed meal at $350/t, with some increase in price in 30% of years with dry weather or drought.

Payments for carbon

One of the areas with uncertainty is the price of carbon and what income will come to a Pongamia plantation from carbon sequestered by the trees and by replacing diesel with renewable diesel. The pods and the meal may also attract income from carbon.

Action on climate change is stepping up around the world, and Australia is under pressure to follow suit. There may be no choice as countries like Europe, the UK and the US implement policies on taxing imports with a ‘carbon tax’, where the country of origin does not have a carbon tax and/or a commitment to net-zero carbon emissions by 2050.

Table 4. Sensitivities in the economics of Pongamia production.

Yield kg/tree: pod in shell

NPV $ 271,584,710 15 20 24 30 35

0.75 92,391,638 141,773,199 181,121,569 240,144,125 289,329,588

0.85 113,438,879 167,677,748 211,009,817 276,007,921 330,173,007

0.95 134,648,772 193,793,482 241,109,250 312,082,902 371,227,612 Oil price $/litre 1.05 156,160,909 220,285,243 271,584,710 348,533,910 412,658,244

1.15 177,593,346 246,697,303 301,980,469 384,905,218 454,009,175

Yield kg/tree: pod in shell

271,584,710 15 20 24 30 35

300 131,457,976 189,864,082 236,588,967 306,676,293 365,082,399

340 143,809,443 205,074,662 254,086,838 327,605,102 388,870,321

Meal 380 156,160,909 220,285,243 271,584,710 348,533,910 412,658,244 price $/tonne 420 168,472,178 235,455,626 289,042,384 369,422,521 436,405,969

460 180,770,382 250,612,944 306,486,993 390,298,067 460,140,629

Yield kg/tree: pod in shell

NPV $ 271,584,710 15 20 24 30 35

16 148,991,857 213,116,191 264,415,658 341,364,858 405,489,192

18 152,576,383 216,700,717 268,000,184 344,949,384 409,073,718 Carbon price 20 156,160,909 220,285,243 271,584,710 348,533,910 412,658,244 $/t CO2 22 159,715,741 223,840,074 275,139,541 352,088,742 416,213,075

24 163,257,507 227,381,841 278,681,308 355,630,508 419,754,842

It is highly likely that the current scheme in place in Australia will be revamped before too long, and we will see less lenient ‘permits’ for carbon emissions and a considerably higher price for carbon. The price of carbon in Europe is above $US30/t ($A38/t), over twice the price in Australia.

Carbon credits have not been allocated to the meal or for the pods to be used as a biomass fuel, and there may be further carbon income from these by-products. Even if the purchaser of the product receives the credit payment, it may mean they can afford to pay more.

Pongamia and climate change

There is an urgent need for renewable transport fuels in Australia, as action to curb greenhouse gas emissions intensifies and especially if a target for net-zero emissions by 2050 is adopted. There are no other viable and sustainable options for large-scale production of renewable ‘drop-in’ transport fuels in Australia. Canola is the main oilseed crop in Australia, but it is a competitor for agricultural land and has an average yield of 1.6 t/ha compared with yield projections of 7 t/ha from Pongamia.

The Pongamia tree can produce a renewable transport fuel without competing directly with food production. Renewable diesel will be an important transport fuel for many years to come, particularly for agriculture, mining and aviation.

Due to a lack of alternatives, electric vehicles and hydrogen are receiving attention, but there are large disincentives and strong community resistance to both. In California, 42% of GHG reductions in recent years have come from an increase in the use of biodiesel. Any comparisons between renewable diesel from Pongamia and other fuels will not just be about the cost of fuel and the incentives required. There are a host of other advantages that will result from growing large areas of Pongamia in Australia, including northern development, the creation of new jobs to replace those lost as the coal industry closes down, and the production of large quantities of protein meal that can reduce methane production when fed to livestock. Pongamia meal, when used as a feed supplement, can also improve soil fertility in nitrogen-depleted grazing lands in northern Australia

Curbing greenhouse gas emissions from agriculture is difficult but necessary because the sector accounts for 16% of Australia’s CO2 outputs. Methane from ruminant livestock makes up about 66% of the emissions from the agricultural sector and represents a particular challenge. Feeding a protein meal to livestock can reduce methane emissions in two ways; firstly, by improving the quality of the feed, and secondly, by improving livestock performance in winter, which can reduce the time to turnoff by as much as a year. If Pongamia meal was to become cheap and abundant in northern Australia, then feeding the meal will likely have positive economic outcomes rather than be a cost, which is the case for most other alternatives. The meal could also have a positive role in the management of drought.

Because there is a dearth of options, planting millions of trees is generally included in plans to offset carbon emissions from agriculture. ClimateWorks (2020) shows there is a need for 45 million tonnes of CO2 sequestration by carbon forestry by 2030 if Australia is to play its part in keeping global warming below 2 °C. A carbon price or other incentive is needed to make tree planting viable, but there is another problem – the huge amount of land taken up by trees will have a negative effect on beef and sheep production.

Pongamia appears a better solution than planting eucalypts or locking up grazing land to grow woody weeds for carbon credits. It is an oilseed crop with positive economic outcomes. It can produce renewable fuel and a high-protein stockfeed, along with nitrogen to enhance pasture performance.

Pongamia has important features that make it sustainable as a second-generation biofuel crop. It will grow on soils not suited for broadacre crops and tolerates salinity and flooding. More importantly, Pongamia is a legume and can supply its own nitrogen requirements. This results in low costs and high energy efficiency. The protein meal and extra nitrogen in the pasture ecosystem will help to maintain livestock production.

Yield and management of Pongamia

High-yielding trees need to be identified and clonally propagated to maintain an even line of high- yielding trees. Because of the nature of agriculture, there is a need to be conservative, particularly if we are considering sites and soils that are not considered suitable for conventional crop production.

The yield potential of Pongamia

1. Bioenergy Plantations, Caboolture has been observing and selecting elite Pongamia trees that yield more than 60 kg of seed in pod per annum, which equates to 30 kg of seed per tree and 9.6 t/ha in a plantation format with 320 trees/ha (Muirhead, pers. comm.)

Figure 2. (a) 13-year-old elite Pongamia tree; (b) Six-year-old clone – with good seed.

2. Pongamia trees were established at Kununurra in 1994 and 1999, in trials where the trees were being assessed as companion trees for sandalwood. When harvested, the highest yield for an individual tree was 36 kg of seed. In a plantation with 617 trees/ha (3 m x 5.4 m), the seed per hectare yield of the best tree is therefore 22 t/ha (Barbour, 2012).

Figure 3. Pongamia trees at Kununurra. The best tree yield was 36 kg of seed.. Source: Barbour, 2021

3. Several thousand Pongamia trees were planted on Brisbane footpaths as ornamental trees about 20 years ago. Because they were selected for good flowering, and there is considerable diversity, it is possible to find trees that are candidates for producing high seed yields. Some of the plantings of Pongamia in Florida, Hawaii and Paraguay have come from the streets of Brisbane.

Trial harvests by University of Queensland researchers (Biswas, 2013) indicated better trees yield 15,000-20,000 seeds per year. At 1.5 g per seed, this equates to 22-30 kg of seeds per tree per year. With a planting density of 400 trees/ha, this would result in 9-12 t of seed per ha and an oil yield of 3600-4800 L/ha per year.

Figure 4. (a) UQ1 on the St Lucia campus; (b) Large seeded elite tree candidate.

4. In India and Bangladesh, yields of up to 90 kg of seed for 20-year-old trees have been reported, while large trees can have seed yields as high as 300 kg. (Halder, 2014; Dwivedi, 2014; Divakara, 2010). Most trees in India are on roadsides or situations with unlimited room. Divakara provides data on yield and canopy area for elite trees, where the average yield of tree crown was 0.54 kg/m2, and the top 20% 0.95 kg/m2. If trees are planted four metres apart, in seven-metre rows, this kg/m2 data would equate to yields of 15 and 28 kg/tree.

Requirements for optimum yields

Suggested minimum requirements to achieve 7.2 t/ha are:

• Soils should have 150 mm of water storage, or some irrigation. • Supplementary irrigation water should be available, with rainfall plus irrigation in excess of 930 mm per annum on coastal Queensland. Irrigation water makes the yields more reliable. • An extra 100 mm of irrigation water is needed for clay soils and 200 mm for sandy soils in the monsoonal areas or dry tropics where temperatures and evaporation are higher and rainfall is concentrated in summer months, with higher runoff likely. • Adequate nutrients, particularly P and K. • Bees augmented at flowering time. • Coastal areas in southern Queensland and the Innisfail-Tully coast have a risk of too much rain in October, affecting flowering. It also appears, from observations at South Johnstone, a high-rainfall site, that there is more potential for leaf disease and insect damage.

Yield and tree density

A yield of 15 kg/tree, with 357 trees/ha (7 m x 4 m) and 38% oil, produces 2238 litres of biodiesel feedstock per ha. With the same yield per tree and 476 trees/ha (7 m x 3 m), oil yield is 2984 litres per ha. But as density goes up, yield per tree will decline, as the area of sunlight per tree becomes limiting.

Provided the yield per hectare remains the same as density is increased, the optimum density of Pongamia is likely to be driven by other factors.

Advantages of higher density include:

• Higher density improves per hectare yields in years 4 to 8 when trees are small. Yield would be doubled from 600 trees/ha compared with 300 trees/ha during this period. • Higher density will help to stop trees getting too big (in trunk size and height) for shaker-type harvesters (e.g., Tenias), delaying the need to prune. • There is a minimal effect on yield if some trees die in the first year or two. • Faster shading will reduce the need to spray weeds.

Disadvantages of higher density include:

• Higher costs of trees and planting • Slow harvesting if the machine shakes five stems per minute. • The plantation might not be quite as drought-resistant.

Taking into account calculations of the yield advantage in early years and the postponement of pruning (which reduces yield as well as costing money), the optimum density is considered to be a spacing of 6 m x 2.8 m (16.6 m2/tree), which is 600 trees/ha.

Managing pollination

Only one-third of Pongamia trees produced seed at Kununurra without bees (Arpiwi, 2013). Nectar was limited and bees stopped foraging after 10am on 40-degree days in November.

Seeds were produced by 37% of trees in 2008 when there were no beehives. In 2009, with beehives, 109 trees (82%) produced seeds. Yields increased almost 10-fold in 2009. Pongamia has developed an explosive floral mechanism to discourage self-pollination. The flower stays open only on the day of anthesis. At the end of the day, it closes whether pollinated or unpollinated (Arpiwi, 2013). This leads to the problem of rain at flowering.

Pongamia seed yield can be affected by rain during the flowering. Rain in south-east Queensland in October and November 2010 resulted in poor insect pollination. Muirhead (pers. comm.) observed that pollination rates dropped substantially during the type of weather experienced in late 2020, with very frequent storms and showers during the pollination period. Pongamia develops flowers of different maturity stages along each florescence, which may be an adaptation to adverse conditions. However, prolonged adverse conditions nullify this reproductive strategy. Plants affected by spring rain may re-flower in early March (as the photoperiod matches that of the spring period). Yield will be lower from the late summer flowers, which will have less time to mature before harvest in October.

Flowering is critical for yield. It is not uncommon to see flower stalks with a significant proportion of seed missing, presumably unfertilised. The optimum balance of water, nutrients, weather, pollinators and absence of damage from harvesting and insects may be important. Some reports of insect damage to flowers need further investigation.

Seed oil content

Oil content and quality is part of the yield equation for producing biodiesel. Trees in south-east Queensland are mostly within the range 35-43% (Gresshoff, 2017). Kununurra trees had an oil content ranging 31-45% (Barbour, 2012). In India, oil contents are 15-50%, with an average for selected ‘elite’ trees of 38% (34-40%).

The oleic oil (C18:1) is relatively consistent at an average of 50% of total oil content for trees from south-east Queensland (Gresshoff, 2017) and 51% from trees in Kununurra, but importantly, some trees had seeds that contained 63% oleic acid.

Change in yield and oil content with maturity

Pongamia seed is slow to develop and usually takes 11 months to mature after flowering. Data from Arpiwi (2013) showed 0.5 g of weight was added to the seed over winter at Kununurra. If there is limited moisture in the soil, and no rain during winter, the seed may not reach optimum weight. The difference between a seed weight of 1.2 g during drought and 1.6 g in a good year, or as a result of irrigation, is for trees with 15,000 seeds/tree an extra 6 kg/tree, or 3600 kg/ha with 600 trees/ha.

Some yield will be lost if harvest is started early in month 9 rather than month 10. According to the data in Figure 5, there could be 0.2 g less seed weight, which for 15,000 seeds/tree is a yield reduction of 3 kg/tree, or 1800 kg/ha at a density of 600 trees per hectare.

Figure 5. (a) Seed weight; (b) Oil content in developing seeds and oil composition. Source: Arpiwi, 2013

Propagation and planting

Growing a tree as an agricultural crop introduces a series of challenges, including the identification of elite trees for clonal propagation, and the actual propagation and planting. Although this is an expensive process, the big advantage of Pongamia is that once established, it has low maintenance and production costs over time.

Varieties: the identification of elite lines

Pongamia is an obligate outcrossing species and, as a result, plants raised from seed are genetically diverse, with significant variation in many traits including tree shape, seed morphology and yield. This provides a diverse range of material from which to select and produce new varieties. Selection has been conducted so far by observations, measurement of yield and other desirable characteristics.

Once elite trees are identified, new trees need to be produced by vegetative means.

Bioenergy Plantations Australia (BPA) has been observing and measuring yields of Pongamia trees since 2002. George and Stephanie Muirhead have viewed thousands of trees, with a view to selecting the better performers. Through observation, they have culled large numbers of trees that seemed good but were later proven to be biannual producers. Even the best trees may miss a year of two in that period, but this appears to be due to factors such as the trial harvesting technique, as above, or adverse weather conditions during pollination and flowering.

BPA and the University of Queensland’s commercialisation arm obtained a licence with the Brisbane City Council that grants BPA exclusive access to the genetic material on Brisbane streets. Parties interested in developing a Pongamia project will need to negotiate a licence agreement with BPA if they are to use these genetics and access the information (logged by Stephanie Muirhead) from 20 years of observation of high-yielding trees and culling less-than-optimal performers.

Going further than the selection of high-yielding trees and establishing a breeding program is a long- term and expensive project. A more rapid strategy for selection of elite genetic material was outlined by Murphy (2010), underpinned by research conducted at UQ.

DNA sequencing has been applied by UQ researchers to create data on the Pongamia genomic sequence. This data can be used for gene discovery of such traits as oil yield and quality from Pongamia. These tools can assist with the selection of new varieties by examining the genes that may indicate high oil yield and good-quality oil.

Traits for selection of elite Pongamia varieties

Kazakoff (2012) outlined the traits highly desirable for oil production:

1. Repeated annual cropping 8. Seed abscission 2. Crop uniformity 9. Resistance to insect, nematode, fungi and 3. Seed mass per tree (yield) bacteria infection 4. Seed oil content (extractable) 10. Flowering time 5. Oil composition and stability 11. Nitrogen fixation efficiency 6. Growth vigour at seedling and adult stage 12. Water-use efficiency 7. Erect growth and architecture 13. Hardiness to drought and salinity

Stem cutting propagation

Pongamia cuttings develop a fibrous root system, somewhat slower than tap root development on seedlings. However, BPA has not noticed any effect on tree growth from trees cloned by cuttings.

A number of studies have identified the best method for propagation using cuttings: Palanisamy and Kumar (1997); Ansari et al (1998); Swamy (2008); Mishra et al (2001); Karoshi (2002); Kesari et al (2009b). All found that indole butyric acid (IBA) was the best hormone to stimulate root development, but there are differences in research findings on the optimum rate of treatment, which are difficult to resolve. It is possible this is due to different methods, different conditions (e.g. time of the year) and variations between genetics. Bioenergy Plantations Australia (Muirhead pers. comm.) says that after much trial and error, they developed a system that works using young material from mother trees in pots.

The Indian system (Kesari, 2012; Figure 6) uses large cuttings of hardened wood. Less-mature plant material for cuttings is used by Investancia in Paraguay (Figure 7). There are advantages in being able to use all sorts of material for cuttings.

Figure 6. Vegetative propagation and the effect of IBA on the rooting of cuttings. A. Initial IBA-treated semi-hardwood cuttings. B. Effect of IBA on sprouting of cuttings at seven weeks (T = treated, C = control). C. Effect of IBA on the rooting of cuttings at 11 weeks. Source: Kesari, 2012

Figure 7. Pongamia trees being propagated from cuttings. Source: investancia.com/

Grafting and budding propagation

BPA found grafting successful, but believes the cost is too high. Multiplication of Pongamia by grafting is easier than by cuttings, according to Karoshi (2002). Budding has a success rate of 100%, much better than cuttings, according to Apriwi (2013). Seedling rootstock is used, which grows faster than cuttings and has a better root system. For a big project, the seedling rootstock can be growing while mother stock is increasing, with a further advantage that less material of elite germplasm is needed. If cuttings have a stem with four buds, this might produce four trees with budding, compared with one from cuttings.

Figure 8. Budding shown in (a) resulted in the vigorous shoots shown in (b). Source: Arpiwi, 2013.

Tissue culture

Tissue culture has the potential to produce large numbers of genetically identical propagules or clones from a small amount of source tissue. This has proved difficult for Pongamia. Success is highly dependent on the genetic background of each individual tree, as demonstrated by differing responses of Brisbane street trees under identical tissue culture conditions (Biswas, 2011).

BPA set up and operated a tissue culture lab for about seven years under the guidance of a professional tissue culture expert. The lab had some success, but it was not consistently repeatable to be commercially viable.

Logistics of propagation and planting

The logistics of producing one million trees in 12 months requires careful planning and execution. The land area for 100 trees/m2 is 1 ha, but closer to 2 ha with access laneways.

Seasonal effects on propagation need to be taken into account. Best results are achieved in spring, with more than half the year not suitable for propagation.

A large amount of clonal material is required for one million trees. If the Indian procedure is used, with cuttings 18-25 cm long and assuming 50% success rate, this would require 360,000 to 500,000 metres of 0.8 cm-diameter Pongamia branches to produce one million trees. If a ‘mother’ tree produced 100 branches, each one metre long, in a year, then 5000 mother trees would be needed.

There would be benefit in developing techniques to use all material (green, small, large and old) to achieve propagation with less, or younger, ‘elite’ material. This might reduce the number of mother trees needed to 2500. Budding seems to be more efficient and might reduce this need to 1250.

Figure 9. Using small cuttings, rather than more mature wood, requires less ‘elite’ stock. Source: investancia.com

Planting trees

Similar to propagation, planting one million trees per year is a major logistical exercise. There are optimum times to plant, particularly if there are risks of flooding or frost. Planting might start in spring with 90 cm-high trees if there is a frost risk, so that the trees are as high as possible by the next winter. Flooding is less predictable, but if the planting is being conducted in North Queensland, it may be safer to plant after the main wet season.

Planting one million trees in 100 days is 10,000 trees a day. Some sort of planter is required.

By way of example, a trailing planter frame might be set up to drill six holes at a stop – a 10 cm- diameter hole drilled to 25 cm, three per row across two rows. If one stop takes one minute, in 10 hours of actual work such a planter would plant 3600 trees a day. Three such planters with a crew of seven each, plus resupply crews, would be needed. A second crew might install dripper lines.

Figure 10. Several planting machines might be required to plant one million trees in 100 days.

It can be difficult to establish trees without irrigation. If it is only possible to plant trees for 10 to 14 days after good rain, it might take several years to plant two million trees. Follow-up watering by truck or tractor-and-trailer could aid establishment. This would require a lot of effort but may be cheaper than installing a drip irrigation system. However, the use of supplementary irrigation has many advantages in the variable rainfall environments of North Queensland, and could provide a good return on investment. This is discussed later in this report.

As a general principle of risk management, where there is a chance that one variety might succumb to a particularly potent disease, several varieties should be planted in a large project. If there is some variation in the flowering time of these varieties, this will provide advantages with respect to extending the harvest time and, if there is rain at flowering time, reducing the risk of a drastic reduction in seed set.

There is also merit in biodiversity and retaining patches of remnant vegetation and planting shrubs that flower earlier in spring than Pongamia, to nourish bees and build up their numbers.

Cost of producing or buying trees

Part of the cost of producing trees is the “training” to ensure a single trunk develops to 90 cm to facilitate shaker harvesters. This is easier and more cost-effective in the nursery than in the field.

The advantages of having a tree 90 cm high at planting include ease of weed control, animal damage is less likely and survival rates are better, particularly if there is some risk of frost and/or flooding.

It is more costly to produce these larger trees, but this is likely to be offset by reduced in-field costs associated with small trees and by earlier harvest. It is possible the trees will have enough seed to harvest in year 3 from advanced trees, rather than year 4.

The larger the tree, the higher the cost. One way to reduce the cost for the bigger trees is for the purchaser to receive them early and to grow them out near the proposed plantation.

It is likely there would be a minimum cost that includes propagation and a licence or ‘variety’ fee. Then cost might be related to size. Calculations might be something along the following lines:

Table 5. Cost calculations for the production or purchase of trees.

Tree size Propagation Costs, incl. Varietal Grow-out Delivery Total inoculant licence fee cost** and and tree bag planting assistance 30 cm $1.50 $1.40 $0.60 Base price $0.50 $4.00 50 cm $0.50 $4.50 70 cm $1.00 $5.00 90 cm* $1.50 $5.50 * Grow-out cost may be less for summer months than for winter months. **If repotting and larger pots or bags are required for large trees, there may be extra cost.

Bees and pollination

Bees were found to be important for pollination of Pongamia trees at Kununurra (Arpiwi, 2013). In 2008, only 49 trees out of 133 nine-year-old trees produced seed when there were no beehives. After placement of beehives, 109 trees (82%) produced seeds. There was a big difference in yield with bees.

Flowering in Kununurra commenced in the first week of October and lasted until the first week of November. The inflorescences were 16 cm long with 78 flowers, on average. Each flower opened for one day only, and there were 10-15 flowers open on an inflorescence per day. Flowering on an individual tree took nine days.

On hot days, nectar was available from 6am to 11am, with only a negligible amount detected after this time. The flowering period at Kununurra is just before the wet season and has some of the highest daily temperatures of the year. It is common for temperatures to reach 40 °C, and it is possible that the lack of nectar is a result of evaporation driven by these high temperatures. Bees were found not to forage past 11am on hot days, and this may result in more bees being needed in these areas, compared with more temperate areas or locations closer to the coast.

Given the importance of bees for the pollination of Pongamia, there are two options – firstly, attract beekeepers to come at flowering time; and secondly, to develop a bee enterprise. The first option is likely to cost money and have an attached risk that not enough hives are present at the right time, while the second option may be quite profitable and not have as much risk that bee numbers are low.

The 2018 Australian Honeybee Industry Survey found that in Queensland, there were 320 beekeepers (with 50 or more hives) managing 84,806 hives (Clarke, 2019). If a couple of large Pongamia projects were established and, for example, 10,000 hives were required to pollinate 10,000 hectares, it would require a significant portion of the local bee industry and as many as 10 or 12 beekeepers.

The survey included questions on impediments to commencement or expansion of paid pollination services. The most common response (44 per cent) was that the payment received for pollination services was not high enough. Pest and disease transfer from other beekeepers (35 per cent) and an inability or unwillingness to travel longer distances (27 per cent) were also common responses. About one-quarter of beekeepers reported lack of control or knowledge about exposure to agricultural chemicals as major impediments. Less commonly reported impediments were poor accessibility to suitable build and re-build conditions for colonies, such as public land (11 per cent), and the absence of institutional arrangements to enter into contracts with farmers.

The difficult question, according to Monson (2007), is “How many hives per hectare are needed for the best yields?” In the US, an average of five hives per hectare are used on almonds, with high- yielding orchards using seven. In Australia, seven is common.

Another question is posed by Monson is: “How far will bees fly and successfully pollinate almonds?”

We currently place bees on sites 500-600 metres apart with no noticeable problems. But no research has been done to discover the maximum distance they would fly and pollinate.

Bees appear to be important for pollination of Pongamia, but due to a longer flowering period, fewer bees per hectare may be needed than for almonds. Muirhead of Bioenergy Plantations (pers. comm.), who has bees foraging Pongamia trees, says one hive per hectare should be adequate, but it is possible that more would be better, particularly if there are limited numbers of local wild bees and the Pongamia trees are in a location that commonly has high temperatures at flowering.

Depending upon the location of the Pongamia trees, it may be possible to plant some leptospermum species, which flower in August and September and produce medicinal honey, with the same DHA

levels as Leptospermum scoparium, the species that produces Manuka honey in southern Australia and New Zealand.

This could be attractive to beekeepers. Leptospermum polygalifolium occurs from southern coastal NSW to Far North Queensland. Varieties that are frost-tolerant and drought-tolerant are being tested. There may be a problem, however, with building up numbers on leptospermum because there are reports bees do not seem to thrive on leptospermum pollen. Bees may need to be managed to make sure they stay in good condition.

The major crop requiring paid pollination services in Australia is almonds. Hives placed in an almond orchard earn about $110/hive for a six-week pollination, and are then available to the beekeeper to place in crops or forests and generate income from honey. This cost is similar for other crops requiring paid pollination. The fee paid by crop growers for paid pollination is forecast to increase as demand from crop growers increases (Clarke, 2019).

An estimated 150,000 hives are required for pollination of almonds in NSW, Victoria and South Australia, assuming 25,000 hectares of almonds and six hives per hectare. If this service is for six weeks in early spring, some of these beekeepers may be interested in moving to a Pongamia plantation by October.

The fee required to attract pollination services for Pongamia may be less than almonds, because it has been reported that good-quality honey can be produced, whereas honey from almonds is reported to be not sellable. However, depending upon the location of the Pongamia, beekeepers may have to travel long distances and require significant compensation for this. If fees of $110 per hive were required, then pollination of 5000 hectares of Pongamia might cost $550,000.

There is potential to make a profit from bees. According to a 2015 ABARES Survey, the production of honey is about 55 kg per hive in Queensland, compared with 50 kg in New South Wales and 92 kg of honey per hive in South Australia and Western Australia. Average farmgate prices for honey, over three years to 2018, were $6.70/kg (Clarke, 2019).

If a 5000-hectare Pongamia project required 5000 hives for pollination, some of these hives might be managed by a resident beekeeper. Providing there are other flowering plants available at other times of the year, there is potential to make a gross income of $300 per hive (50 kg of honey per hive at $6/kg), and for the cost of bees to be reduced. Depending upon the location, it may be difficult to arrange 10 or so beekeepers to come to the Pongamia farm at the right time.

Agronomy of Pongamia

Managing Pongamia for high yield requires agronomy, such as application of fertilisers, weed and pest control, and management to prevent low seed yield from less-than-effective pollination. The management of Pongamia is relatively simple because trees do not need to be planted each year and are almost completely free of pests and diseases.

Fertiliser

Most biofuel feedstocks, including sugarcane, canola, maize and trees such as eucalypts, require large amounts of N fertilisers. Pongamia, being a legume, produces its own nitrogen. Other nutrients may need to be added where soils are deficient, and in response to removal over time. This means that in the first four years, only an initial fertiliser application is needed, and from year 5, fertiliser application will start in small amounts and increase according to the nutrient deficiencies in the soil and the removal of nutrients in pods and protein meal.

Most of the nutrients removed will be in the meal left after extraction of oil. If pods are used as a fuel source, rather than returned to the plantations, extra nutrients will be required, particularly potassium (K). However, if ash from boilers was returned, some of this nutrient will be recycled.

The composition of meal is shown in Table 6 from Osman (2009). The removal of nutrient in meal is calculated for a yield of meal of 4.36 t/ha (12 kg/ha seed/tree x 606 trees/ha x 60% meal = 4.36 t/ha).

The fertiliser required to replace nutrients removed in the example in Table 6 would start with a phosphate fertiliser at a rate to supply 17 kg of P per ha, e.g. 77 kg of MAP, which has 22% P. If the soil is low in potassium (K), a fertiliser application of 28 kg of K per ha may be needed. Muriate of Potash (50% K) would be needed at 56 kg/ha.

At the current prices of fertilisers, replacement of the major nutrients removed in seed cake would cost $105.56/ha (77 kg of MAP at $0.92/kg; 56 kg of Muriate of Potash at $0.62/kg). However, if both P and K are required, the cost of replacing these nutrients can be reduced by the use of feedlot manure or biosolids, which, depending upon freight costs, could save more than 40% and have the advantage of supplying other minor nutrients. Assuming some fertiliser and some manure is used, a saving of 20% results in a fertiliser cost averaging $85/ha.

Table 6. Composition of seed cake and nutrient removal (Osman, 2009). Osman Removal in Usharani g/kg 4.36 t/ha g/kg Nitrogen 35-43 153-187 Calcium 2.5 11 7 Phosphorus 4 17 6.2 Potassium 6.5 28 2.3 Sulphur 1.8 8 Magnesium 1.7 7.4 2.4 Manganese 0.076 0.33 0.076 Zinc 0.059 2.6 0.12 Copper 0.022 0.095 0.012 Iron 0.100 0.44 0.023

Calculations can be made for other nutrients using soil testing to indicate whether the soil is deficient or whether fertiliser can be delayed because there is plenty of the nutrient in question.

There is some variation in the reports of nutrient content of Pongamia seed cake, as shown when the figures reported by Usharani (2009) in column three of Table 6 are compared with those of Osman. This is to be expected due to variation in nutrient content of soils and in the nutrient uptake by Pongamia trees. Monitoring of the nutrients removed is a simple process that can be undertaken every year or two.

Weed control

Weed control is important for good tree growth, especially in areas of low rainfall where there is significant competition for water. Harvest, starting in year 4, may be delayed a year if there is poor weed control. Spraying weeds in tree crops is usually carried out using a shielded sprayer, which guides itself around the trees. It is common to spray 1-2 metres along the row and leave (in six-metre rows) the centre 4-5 metres unsprayed.

The use of these sprayers is another reason for planting trees that are 90 cm high. The advanced planting stock will have larger stems with the strength to guide the spray head around the stem.

Cattle may graze these areas when the trees get strong enough to avoid being damaged by the cattle. This is usually in year 2 or 3 and may continue until year 10 when the grass will mostly be shaded out by the trees. After this time, weed control may be a rare event.

Muirhead (pers. comm., 2021) says sheep can be very effective, not only with weed control but trimming up the lower branches of the tree, leaving 900 mm of bare trunk to aid harvesting. He has found merino sheep do not eat any branches or leaves, while dorpers can be too aggressive and eat too much of the tree. First-cross merino-dorper sheep do a good job with weed control and tree trimming.

Sheep would also keep the grass in the middle of the row trimmed and reduce the need for slashing.

Inoculation and nitrogen fixation

Inoculation of young Pongamia trees with B. japonicum strains CB1809 and USDA110 (common soybean inoculum) is recommended. The most suitable time is likely to be when the trees are moved into larger pots.

Research on Pongamia nodulation at UQ has found that the Pongamia can nodulate with several strains of both Bradyrhizobium and Rhizobium. Several strains were tested and B. japonicum strains CB1809 and USDA110 (common soybean inoculum) were the most effective. Nodules produced by these strains were larger and more uniformly filled. (Biswas, 2017).

Experiments demonstrated that high levels of soil nitrate inhibited nodulation, which is common in legumes (Samuel et al, 2013). Therefore, although it is a tree, Pongamia shares the major characteristics found in other better-researched annual crop legumes, such as soybean and pea.

VAM

Mycorrhiza (VAM) can enhance the uptake of phosphorus and other nutrients, which enable plants to grow and yield in what might be otherwise nutrient-deficient soils. P. pinnata was found associated with a number of vesicular-arbuscular mycorrhizal (VAM) fungi (Jamaluddin, 2005).

Selvaraj et al (1996) reported that overall growth response was best with G. mosseae out of the three arbuscular mycorrhizal fungi inoculated. Rahangdale and Gupta (2001) reported the benefits of VAM, while Wani and Sreedevi (2007) found inoculation of Pongamia seeds with arbuscular mycorrhizal

cultures enhanced seedling height by 92% and stem girth by 46% compared with control at three months after sowing in a nursery.

Mutka (2010) summarised that Pongamia performed well on problem soils. Inoculation with a combination of Rhizobium, phosphobacteria and VAM would improve performance.

Pests and diseases

Red shoulder leaf beetle (Monolepta australis) has been found on Pongamia in southern Queensland. They usually move in after rain during the period after leaf drop and when new leaf and buds are reforming. They attack in swarms and have a very fast multiplication rate, which means they can completely strip trees of young leaves and damage flowers as they move through the plantation. There is benefit in control if there are large numbers affecting flowering.

Bulldock 25 EC is the preferred treatment to control fruit- spotting bugs in macadamias and avocados and has worked experimentally (by BPA) on these beetles. Because it is Figure 11. Red shoulder leaf beetle. registered on macadamias, it may be possible to obtain a minor use permit from the APVMA. Bulldock is highly toxic to bees and needs to be sprayed at night, so it has dried off before bees come out in the morning. There may be other control solutions, according to BPA. Eco-oil works but the economics on large plantations may be an issue. A spray produced near Brisbane called Triple red spot is effective but slower acting than Bulldock. It is not toxic to bees.

Early spot-spraying of infested areas can work better than blanket spraying of a plantation, but it requires continuous checking during the critical period. Control is assisted by planting other trees, e.g. fig trees, Melaleuca and Eucalyptus torelliana, on boundaries or in the area where the beetle will often accumulate first and spraying these before the beetles enter the plantation.

An unnamed leaf miner can affect Pongamia. It is a very small green grub that eats away inside the leaf, leaving brown patches. It is probably not of consequence in small numbers but can become a major problem if most leaves are affected.

Leaf miners are found in other trees, citrus for example, and a systemic insecticide, such as Rogor (dimethoate), registered on a tree crop may be an option, but is poisonous to bees.

Alternatives include neem oil, bacillus thuringiensis, and spinosad sprays, as well as beneficial insects such as beneficial nematodes and parasitic wasps.

Pongamia has been infected by the fungus Phyllachora pongamiae, causing a disease known as ‘tar spot’. The fungus causes a leaf discoloration but does not appear to cause mortality or have a serious impact on mature trees. Impacts Figure 12. Leaf miner damage. on small trees may be more serious. Tar spot has been found in North Queensland, but not in Pongamia trees in southern Queensland. The fungus Aspersporiun pongamiae, which causes leaf spot, has also been recorded on native Pongamia in North Queensland (Murphy, 2012).

Climate, irrigation and soils

Pongamia is extremely drought-resistant, but there is still a need for soil moisture storage to make use of rainfall and reduce wasteful runoff. Pongamia trees north of Roma, planted in 2010, mostly survived 12 months without rain in 2019, but a portion of the trees died on areas where the soils were shallow and had limited moisture storage.

It is recommended that, for good yields of Pongamia, soils should have a water storage capacity of 150 mm. The depth of soil required to store 150 mm ranges from 60 cm on a clay soil to 120 cm on a sandy loam.

One reason Pongamia has good drought tolerance is that it is partially dormant during winter, dropping its leaves in spring. This deciduous nature may be an adaptation to the dry tropics where rainfall is mostly confined to five or six months of summer, from November to March, and there is a winter drought from April to October.

Normally, the plant is only briefly deciduous in late spring and while flowering, and quickly replaces leaves with new growth, but drought can extend this period.

Irrigation of Pongamia

A small amount of irrigation may improve yields in dry seasons and help tree growth and survival in the first three or four years. At Roma, only some of the trees flowered during the drought of 2019, and irrigation in October may have produced flowers that would have been supported by good rain in January and February. Some of the trees flowered in October and again in February.

Irrigation during the first three or four years will guarantee establishment of Pongamia trees. By year 3, the trees should have roots down a metre or more and be more drought-resistant. Only small amounts of water may be needed for this establishment phase. A single drip irrigation line would irrigate one metre of a six-metre row, with the result that 1 ML/ha (100 mm) of available water would be almost as effective as 500 mm of rainfall. It may result in a harvestable yield in year 3, whereas a dryland situation may take a year or more longer.

If irrigation water is available and an irrigation system is installed, it would seem advantageous to continue using it in a strategic manner to enhance yield.

Strategic watering may improve the seed set and yield if the flowering period in October-November and the season leading up to this time is dry. In an extreme event, such as the drought at Roma in 2019, irrigation might have enhanced flowering to produce a harvestable yield. In a less-extreme season, better flowering after irrigation could improve yield by 20%. If the income per hectare is in the vicinity of $6000, a 20% improvement would be $1,200, compared with the cost of irrigation of about $120 per hectare.

There may be further benefit from irrigation to enhance the seed weight if the winter season is dry. Data from Kununurra (Arpiwi, 2013 – see Figure 5) shows seed weight in June was only 1 g and this increased to 1.5 g over the next four months. The difference between a light seed weight of 1.2 g in a drought and 1.5 g in a good year is a 25% increase in yield.

Modelling of water deficits can help to calaculate how much water is needed for optimum yield. Kaushal (2014) reported the optimum water requirement (rainfall plus irrigation) for Pongamia in the dry tropics of India was 950 mm. Out of 820 mm rainfall received during the summer monsoon, 52% contributed to evapotranspiration (ET), 34% stored as soil moisture and 14% lost as runoff.

Water supply was adequate in wet years, 10% short in normal years and 20% short in dry years. About 150 mm of soil moisture was drawn down during the dry season.

The study was conducted by ICRISAT researchers in Hyderabad, which has a latitude of 18°, similar to Cairns and Broome, and with a climate similar to Katherine. Average rainfall is 898 mm, of which 80% is received during June to October. Maximum air temperatures exceed 40 °C in May. Estimated potential evapotranspiration (PET) is 1650 mm annually. The soil in the trial was a Vertisol with good depth, and Pongamia roots grew up to 250 cm.

Table 7. Water balance of Pongamia at ICRISAT (Hyderabad) for a 10-year simulation period. June to October Change Type of Number Sept. to May Annual Runoff + in soil Stress season of years rainfall rainfall rainfall drainage ET water factor Dry 2 612 40 652 95 710 -153 0.21 Normal 6 820 91 911 115 830 -34 0.1 Wet 2 1179 71 1250 249 953 48 0

Figure 13. Water balance of Pongamia at ICRISAT (Hyderabad) for a normal rainfall year. Source: Kaushal, 2014

Hyderabad has significant rainfall and Vertisol soils, which have good water-holding capacity. If rainfall and soil water storage are lower, then the importance of irrigation will increase. An irrigation water balance constructed for Yarraman, a 780 mm rainfall environment, shows a need for 7.8 ML of effective rain plus irrigation per ha for low-stress production. It was assumed the Pongamia trees had 70% coverage. Effective rainfall on 0.7 ha is 4.66 ML, leaving an irigation requirement of 3.14 ML. Pongamia is expected to tolerate some dry spells and stress during the year and in this case about 2 ML/ha of water applied strategically to enhance flowering and seed weight would likely optimise production. However, this is an average figure and more water would be beneficial in dry years.

From the available data, it is calculated that economically useful amounts of irrigation water might start at 1 ML/ha in 900-1000 mm rainfall areas and increase to 3 ML/ha for 700 mm rainfall areas, while 3-4 ML/ha may be optimal for the monsoonal tropics, which have a dry winter.

Restoration of mined lands

Pongamia is tolerant of low fertility and salinity and is a good candidate for restoration of land after mining. Trials in India found Pongamia was the best species to plant on mine spoils of bauxite, coal and aluminium with different amendments (Jha et al, 1987; Singh and Singh, 2001; Singh et al, 1995).

In Queensland, several hundred Pongamia trees were planted in 2015 at the Meandu coal mine, near Nanango, in a trial of rehabilitation of mined areas. Six years on, with almost 100% survival, the trees are looking good, mostly three metres high and fruiting well. This is despite two years of very low rainfall, which included the drought of 2019.

The Pongamia trees on the rehabilitation area were adjacent to a trial planted to eucalypts, wattles and brigalow. Where the Pongamia trees had a good grass cover, there was almost no grass growing in the native trees and, as a result, there was serious soil erosion on the steeply sloping site (Figure 14).

The apparent reason in this case was nitrogen. Grasses like nitrogen and were not growing well on the infertile mining waste that was unplanted or planted to native trees. On the Pongamia site, it is likely the Pongamia trees had improved soil nitrogen levels, which encouraged grass growth. In fact, the grass growth was so good, it appeared to have outcompeted most broadleaf weeds.

This nitrogen effect was also observed at Spring Gully, where buffel grass growing between 10-year- old Pongamia trees was much greener and about 25 cm taller than the buffel grass growing sward nearby. Grass between the trees was yielding 50% more than grass without the Pongamia nitrogen.

The conclusions are that Pongamia trees will establish and grow well on poor soils with low fertility, with their contributions of nitrogen resulting in better grass growth and grazing potential. Pongamia appears to be an opportunity to turn the rehabilitation of mined land into a profitable enterprise.

Figure 14. (a) Pongamia trees on mined land, Queensland; (b) Native trees on mined land. Grass was growing well where Pongamia was enriching the soil with nitrogen

Frost

Pongamia has been observed to survive and recover from frost events. Tree damage from frost becomes less as the trees grow in height. At Spring Gully, north of Roma, there is considerable incidence of frost and trees have died where there is no slope or air drainage. Trees close to these ‘frosty hollows’ have remained stunted as the regrowth appears not to have been able to achieve enough height to avoid damage, and are frosted in successive years. Trees on a good slope and on the tops of rises, where temperatures of -4 °C have been recorded, have been unaffected by frost in terms of their size after 10 years.

Pongamia was planted at Toogoolawah on a slight slope, but adjacent to a low-lying area with no air drainage. Trees survived much better where they received additional water by way of overflow from nearby ponds, but most appeared to be affected in a bad frost year, when the trees were young. As a result, most trees have multiple stems due to regrowth after frost killed the main stem. Multiple stems are a problem with shaker harvesters.

Pongamia trees at Boonah were planted on land with more slope and with no restrictions to air drainage, and this resulted in much less frost damage. Trees also planted in 2015 on a slope of 8-10% at the Meandu coal mine, Nanango, appear to have been unaffected by frost.

In summary, Pongamia trees have been planted in several inland locations in southern Queensland that experience frost. Damage has been minimal where there is a slope of more than 3% and good air drainage, and where temperatures do not get colder than -4 °C.

Where trees are planted in areas that receive frost, trees should be 90-150 cm tall and planted in spring, so that the trees grow to 2-3 m before the first winter.

If plantations are being considered on flat land in areas where frost occurs, other techniques for frost mitigation, such as mini-overhead sprinklers or high-capacity fans, which are sometimes used in citrus and other trees, should be considered in the first three or four years to enable trees to grow to a height of more than four metres, which will usually enable them to avoid frost damage.

Figure 15. Pongamia trees damaged by frost.

Harvesting and pruning

Harvesting of Pongamia trees has been conducted by tree shakers. The Tenias harvester (Figure 16) is now used for olives and almonds and should harvest Pongamia trees. Other potential machines include the Colossus (Figure 17), which is used for olives and other fruits, including oranges for juice. This machine uses vibrating fingers which are likely to damage the bud set of the next Pongamia crop.

Pongamia seeds typically take 11 months to mature after flowering, which generally starts in October and continues for 3-4 weeks. This means that by harvest, or soon after it has started, the buds for the next season’s flowering have started to develop.

In harvesting trials, BPA used a hand-held implement with electrically driven fingers to shake the branches of trees. They have noted from observations and from trials aimed at testing a theory that yield is reduced in the following season due to negligible pods forming in areas where it was used. Hence a harvester which shakes the tree is regarded as better than a finger shaker.

A problem with harvest is that it is very slow. The Tenias machine moves continuously, with a shaker that clamps around and shakes a tree, releases and moves forward to the next tree. It shakes about five stems per minute, which, if they are 2.75 metres apart, is only 13.75 m/min or 0.825 km/hour. For six- metre rows, that equates to 0.5 ha/hour. Over 30 days working 20 hours/day, one machine would harvest 300 ha and 16 machines are needed to harvest 5000 hectares.

It would be advantageous to start harvest in early September rather than late September, to reduce the numbers of harvesters and labour required. Data from Arpiwi (2013) showed 0.2 g of weight was added to the seed over the last 6-8 weeks of maturity at Kununurra (See Figure 4). Even 0.1 g less weight in the seed, for 15,000 seeds per tree, is a yield reduction of 1.5 kg/tree, or 900 kg/ha at a density of 600 trees/ha. The value of 900 kg of seed is approximately $1000/ha.

Given the large cost of harvesting, further investigations are worthwhile. The seed may fill up earlier in areas that have more winter and early-spring rainfall and/or irrigation is applied. The use of abscission chemicals to enable earlier fruit drop could be investigated, bearing in mind the potential loss of yield. Moreno (2015) found harvesting with a trunk shaker was improved with the abscission chemical ethephon, but only for certain varieties of citrus.

The second problem with harvest is the potential size of the tree. Pongamia can grow to more than 20 metres high and 10 metres in canopy width if growth is unconstrained. Specifications for the Tenias harvester are that trees should be less than six metres high and five metres wide. It is also likely that a large trunk girth will reduce the effectiveness of shaking.

Arpiwi (2013) said: “Millettia pinnata is potentially a large tree and its size will need to be managed, for example as a hedge, to be able to use current or modified harvesters.”

Pruning was combined with the use of the plant growth regulators paclobutrazol and Promalin to determine whether they might assist with managing tree size and shape. One-year-old trees were pruned to 20 and 50 cm, and while this increased branching a little, there was no observable difference at four years. At four years, growth regulators were applied, but these had little effect on the Pongamia trees. Pruning 10-year-old trees to 120 cm produced a host of new shoots, but most stems and trunks rotted due to pathogen infections, and pod development was reduced.

Figure 16. The Tenias harvester in almonds. Figure 17. The Colossus harvester is used for olives. Sources: tenias.com; leda.net.au

Pruning is likely to have a deleterious effect on the next year’s harvest. If the pruning event is carried out after harvest in October, there will be branches with buds about to flower removed by the operation. It is possible that pruning might be carried out every two or three years, to restrict this yield loss to one year in three, but close observation of the effect of pruning may confirm the best strategy.

Figure 18. Tree-pruning machine. Figure 19. Tenias grab-and-shaker bar Sources: tol-inc.com; tenias.com

Marketing biodiesel feedstock

The price of biodiesel has increased substantially in California during 2021 in response to the stimulus provided by the incentive system, which taxes fossil fuels to subsidise renewable fuel.

Global demand for advanced feedstocks from sustainable sources is outstripping supply, with hydrotreated vegetable oil (HVO) demand expected to increase substantially. Refiners in Europe are currently building three times more HVO production capacity than what can be supported by readily available feedstocks. In the US, a 10-fold overcapacity is estimated, meaning worldwide HVO refiners might face large-scale short supply (Bioenergy International, June 2021 – see Appendix 1)

The Renewable Fuel Standard (RFS) and RIN markets in the US subsidise biofuels by increasing the cost of selling gasoline and diesel. Bushnell and Lade (2016) described how the RIN market works. “RFS establishes biofuel mandates such as 25% by 2022. The Environmental Protection Agency (EPA) created an accounting system where every gallon of biofuel produced in or imported into the United States generates a credit, known as a RIN. To comply with the RFS, refiners must turn in their required number of RINs to the EPA at the end of each year. How they obtain those RINs is up to them. Petroleum refiners can buy RINS from independent biofuel producers or get into the biofuel business and produce RINs themselves. Importantly, the price of RINs is set by market forces. The RFS determines the demand for RINs by specifying how much biofuel, and therefore how many RINs, need to be sold in aggregate each year.”

A support process and similarly high prices in Europe mean that any oil or biodiesel produced in Australia is exported, because these higher prices also raise the price of feedstock like canola oil, making biodiesel unprofitable in Australia. For example, to match the price of diesel in Australia, crude Pongamia oil would need to be priced at 55 cents/L.

Figure 20. Price of biodiesel on world markets. Source: neste.com/investors/market-data/biodiesel-prices-sme-fame#19d53655

FAME diesel refers to the esterification of vegetable oils to produce fatty acid methyl esters (FAMEs), which are esters of fatty acids. The physical characteristics of fatty acid esters are closer to

those of fossil diesel fuels than pure vegetable oils, but properties depend on the type of vegetable oil. A mixture of different fatty acid methyl esters is commonly referred to as biodiesel. FAMEs have physical properties similar to those of conventional diesel. They are also non-toxic and biodegradable.

Hydrotreated vegetable oils (HVOs), commonly referred to as renewable diesel, and hydro-processed esters and fatty acids (HEFAs) are produced via hydro processing of oils and fats. Hydro processing is an alternative process to esterification to produce diesel from biomass.

HVOs/HEFAs are straight chain paraffinic hydrocarbons that are free of aromatics, oxygen and sulphur and have high cetane numbers. HEFAs offer a number of benefits over FAMEs, such as reduced NOx emission, better storage stability, and better cold flow properties. Hence, HEFAs can typically be used in all diesel engines. Also, the use as an aviation (bio jet) fuel has been approved.

Commercial production of HEFAs/HVOs is carried out by Neste Oil in Europe and Asia, and by companies such as Renewable Energy Group Inc, US (ETIP Bioenergy, 2021).

Significant advances have been made in the refining of biodiesel. The American company Honeywell UOP announced in 2020 that they had achieved a one-step conversion to renewable diesel – for quality plant oils, not rendering fats or used cooking oil. Renewable diesel is new technology that overcomes some of the problems of biodiesel. It features up to an 80% lifecycle reduction in greenhouse gas emissions compared with diesel made from petroleum, and can be used 100% neat instead of in 5-20% blends like biodiesel or in 10-15% blends like ethanol.

The new process uses a combination of catalysts in a single unit to clean and remove oxygenates and other contaminants from the feedstock, and then isomerizes the feed to improve its cold-flow properties. Due to its simplified design, the single-stage Ecofining technology can be put into service quickly, and with lower capital expense than other designs.

The single-stage Ecofining process also provides greater flexibility to expand into a full two-stage Ecofining process that can produce renewable jet fuel.

Advanced biodiesel can be produced via the gasification of lignocellulosic feedstocks or biogenic wastes to produce syngas, which is then converted from biomass to liquid (BtL) via the Fischer Tropsch process, which converts a mix of CO and hydrogen into liquid hydrocarbons (ETIP Bioenergy, 2021). This process could be used to produce diesel from the seed pods and meal of the Pongamia tree if other uses and markets were not attractive.

Carbon production and pricing

Pongamia exhibits fast growth and high seed production potential, which means there are several ways in which it reduces the use of fossil fuels or sequesters carbon.

Replacing diesel use

If Pongamia produces 3000 litres/ha of oil per year, with an 80% reduction of CO2 output compared with diesel, this is a saving of 1.54 t/ha of C and 5.7 t/ha of CO2. This is based on the emissions data used by the EPA in the US, where 2778 g of C is attributed to the burning of a gallon of diesel.

The conversion from C to CO2 is a result of carbon with an atomic weight of 12 combining with two molecules of oxygen, weighing 16, which means the CO2 weighs 44. Therefore, to calculate the amount of CO2 produced from a gallon of gasoline, the weight of the carbon in the gasoline is multiplied by 44/12, or 3.7.

Use of pods as a biomass fuel

The pods that contain the seeds are about the same weight as the seed, which means that for our conservative yield, there will be 7.14 t/ha of pods. If the pods are 50% carbon, this means that if used as a biomass fuel instead of coal, there will be a saving of 3.56 t/ha of carbon and 13.17 t/ha of CO2.

There are several ways in which pods can be used for fuel. These are described later in this report.

Carbon from meal

The Pongamia meal can help to reduce carbon emissions if it is fed to dairy or beef cattle. Methane emissions from beef and dairy cattle are large and are highest when cattle are feeding on dry grass, low in protein, during the dry season or drought. Vázquez A. et al (2017) found that feeding a protein supplement in the form of Leucaena reduced methane energy loss by 40% when beef heifers were being fed low-quality forage.

Other studies (Charmley, 2012) have found that improving poor-quality diet reduces methane emissions, but to a much lesser extent. But there is another mechanism at work here. If the supplement improves weight gain and reduces the time to turnoff, then the methane produced per kilogram of beef is lowered (Charmley, 2008)

Combining the two mechanisms, it still may be possible that feeding a protein meal, such as Pongamia meal, could reduce methane emissions by 40%.

If 2 kg/day of Pongamia meal was fed as a supplement on dry grass during late winter in northern Australia for 100 days, 1 t would supplement five steers. Extra weight gain of 50 kg/head at $2.50/kg would return $125, enough to provide a surplus to the supplement cost of $80 (200 kg at $0.40), with reduced methane a bonus. If methane output per head is normally 100 kg in a year, it would be about 30 kg in 100 days, and a saving of 40% is 12 kg of methane per head. It could be higher than this because methane output is highest when cattle are on low-quality feed, which would coincide with the 100 days of supplementary feeding. The amount for five head is 60 kg of methane saved per tonne of meal, which is equivalent to 1500 kg CO2, and for a hectare of Pongamia producing 4.28 t/ha of meal, this is 6.42 tonnes of CO2.

In this situation, it is difficult to know who should be paid for a reduction in carbon emissions – the producer of the protein feed or the livestock producer. It has not been counted in carbon income, but at the end of the day, it is a positive outcome from the planting of Pongamia.

Feeding the protein meal to cattle also can help to improve pasture growth due to the input of nitrogen that gets returned to the pasture by dung and urine. This can help restore the soil organic matter, which cannot build without extra nitrogen inputs. Although it is only a small amount, it can offset the removal of nitrogen by animals, which has over time impoverished the nitrogen levels of our soils.

Carbon sequestration by trees

Pongamia trees have been found to sequester an average 25 kg/ha of CO2 per annum during the 10 to 15 years of their growth (Indrasumanar, 2017; Prasad, 2019). Carbon sequestration starts at about 2 kg of CO2 and has been measured at about 40 t/ha of CO2 during years 10 to 15, after which growth drops off as trees fill the space available to them.

The price of carbon

The price of carbon is likely to rise as more and more countries adopt targets of zero net carbon and because the price of carbon is now global. The nominal value of carbon certificates in Australia of $16/tonne of CO2 has to rise if Australia is to get serious about joining the world to beat global warming. Even without any policy change in Australia, the price of carbon will effectively rise to the level it is in Europe and the US as the carbon taxes on imports are implemented and have an impact.

These taxes will impose tariffs on carbon-intensive goods from countries that have not adopted a realistic carbon price or a 2050 net-zero emissions target, such as Australia.

They are already policy in the European Union and the US, where President Joe Biden calls them a ‘carbon adjustment fee’ against countries that are failing to meet their climate and environmental obligations. There are reports the UK is about to follow suit. The Australian Government is concerned, while Canada, which has an economy-wide price on carbon, isn’t worried.

The reason for these import taxes is to prevent unfair competition from imports from countries where there is no carbon tax.

The prices for carbon are highest in Europe. According to the latest World Bank report (May 2021), carbon prices in Germany are $US30/t and for the EU Emissions Trading Scheme $US50/t.

California has a lower carbon price of $US17/t ($A22/t), alongside some impressive outcomes from the implementation of its climate policies. But this price is set by supply and demand in the carbon market, which is still subdued by the effect of the COVID-19 pandemic on economic activity. It is likely to increase as economic activity picks up.

California has a Cap-and-Trade Program that sets maximum greenhouse gas emissions for different sectors each year (the ‘cap’) and enables entities in those sectors to buy and sell allowances for CO2 emissions that they need or do not need (the ‘trade’). The California carbon price is driven by trading.

Australia has a similar scheme in place, but with very weak targets and a floor price of $16/t. GHG- emitting entities have permits for a large number of free emissions, and there is not much incentive to reduce emissions.

The World Bank report said: “Despite progress, carbon pricing efforts are not on track to meet Paris Agreement goals. The majority of carbon prices remain far below the $40-80/t CO2e range recommended for 2020 to meet the ‘below 2 °C’ temperature goal of the Paris Agreement” (World Bank 2021).

Against this background of increasing urgency to restrict global warming, and the carbon price going global, $A20/t CO2, used in the economic model, is likely to be a conservative price of carbon in the future.

Processing and selling the protein meal

Options for using the protein meal from Pongamia include:

• As a livestock feed supplement. • Converting the meal to oil and renewable diesel. • Refining it further as a protein food for human consumption. • As an organic fertiliser.

Meal as a livestock feed supplement

An important development in Pongamia production in the last 10 years has been research on making the meal useful as a stock feed. Once the meal has been detoxified, it appears to have similar quality and value to cottonseed meal.

Cottonseed meal is produced as a by-product of the crushing process used to extract cottonseed oil. Only one plant currently crushes cottonseed in Australia, Cargill’s cottonseed oil facility at Narrabri.

Prices for cottonseed meal vary according to demand, which goes up in dry seasons and drought. In 2018, prices surged from $350/t in early May to $650/t in June as the 2018-19 drought worsened. (James Nason, Beef Central, 11 July 2018) Prices continued to rise above $700/t in 2019, but have come back with the end of drought, but are still in the vicinity of $600/t.

A price of $380/t for Pongamia meal has been selected for the economic model to reflect an average of the standard ‘good season’ price of cottonseed meal ($350/t) and increased prices in 30% of years with dry weather or drought.

Converting meal to oil

As described for the Pongamia pods later in this report, it is possible to convert biomass into syngas, which is converted into diesel using the Fischer Tropsch process

There are alternative processes that involve the conversion of biomass to crude bio-oil, followed by conversion to diesel or jet fuel (Hayward, 2014).

The value of the meal for stockfeed is likely to outweigh the conversion cost to a biomass‐based fuel but the situation can change, and if there is reluctance on the part of livestock producers to use the meal, converting it into fuel may be an option. Large quantities are likely to be needed to make processing facilities viable.

Further refining meal for human consumption

TerViva, an American firm, has gone one step further in developing process methods to make the meal suitable for human consumption. TerViva is involved with plantings of Pongamia in Florida and Hawaii and has shifted its attention to food products from Pongamia. Food products being investigated include meat substitutes and Pongamia flour for baking, which is aided by its gluten-like properties. Pongamia protein is also suitable for beverage applications, with solubility of about 90% as compared with soy, which has about 50% solubility.

Meal as an organic fertiliser

Osman et al (2009) reported on a number of trials where Pongamia seed cake was used as a fertiliser. The seed cake used had 4.28% nitrogen, 0.4% phosphorus and 0.74% potassium, along with useful amounts of trace elements, which included 0.19% sulphur.

At the current prices of nutrients from alternative fertilisers, seed cake would be worth about $85/t (42 kg N at $1.40, 4 kg P at $4 and 7.4 kg K at $1.40), compared with about $360/t as stockfeed and more than this when used in human food products.

Processing seed and detoxification of meal

The first process, the extraction of the oil from the seed, is similar to canola and soybean, except that, seeds need to first be separated from pods. The second process is to remove alkaloids from the meal so that it can be fed to livestock. The stages of processing Pongamia seed to produce oil and meal are shown in Figure 21. Extraction of oil with extrusion generally leaves 10-20% of the oil behind, and so most of the oil mills, at least in Canada and the US, use solvent extraction, which can remove up to 98% of the oil.

Figure 21. Steps in the processing of Pongamia seed.

Separating pods from seed

Machines have been developed in India to separate the pods from the seed, such as the one shown in Figure 22 from Kamdhenu Machinery, Nagpur. Machinery developed in Australia by Satake for dehulling beans might be adapted for Pongamia decortication. Manjunath (2016) described the design and fabrication of a Pongamia decorticator (Figure 23).

Figure 22. Pongamia decorticator. Figure 23. Prototype Pongamia decorticator. Sources: kamdhenumachinery.com; Manjunath, 2016

Flaking

Flaking is commonly used on oilseeds prior to mechanical or solvent extraction to increase oil removal. It aids solvent extraction by increasing contact with the solvent.

Cooking and oil extraction

Cold pressing may only remove 80% of oil. This is increased by cooking but still may only be in the vicinity of 85% and solvent extraction is commonly used to extract more oil. Pressing is still used prior to solvent extraction to reduce the solvent needed and increase the oil recovery.

Removing residual oil by solvent extraction removes the bitter taste and the pungent odour ingredient karanjin. Repeated percolation of hexane will reduce oil to less than 0.5%.

Gaber and Trujillo (2018) found conventional processing of canola, using hexane as a solvent, has safety risks because it is highly flammable and poses environmental and health risks.

Prabhu (2002) concluded that solvent extraction is the best method of detoxification and for recovery of oil. Petroleum ether was used as the solvent. Other solvents might be useful when producing fuel; for example, ethanol is used as a solvent to remove oil from soybean.

Trujillo (pers. comm.) said there were other extraction methods, such as supercritical fluid extraction, but as the output from Pongamia is going into biodiesel, it would be cheaper to stay with solvent extraction. Trujillo suggested exhume or petroleum ether would be the most cost-effective alternatives.

Detoxification of Pongamia meal

It appears the oil-soluble compounds are responsible for most of the adverse effects of feeding meal to livestock, being a reduction in feed intake and growth in animals. However, after removal of oil (solvent extraction), the meal still contains anti-nutritional constituents, including phytates, tannins and protease inhibitors (Vinay, 2008).

De et al (2009) found the oil contained toxic furanoflavonoids and had a dark colour and disagreeable odour. Methanol, isopropanol and dimethyl formamide as solvent under liquid-liquid extraction completely detoxified oil. The furanoflavonoid toxins are more soluble in HCl. His study looked at optimum solvent extraction and the complete refining of oil after HCl treatment.

Rahman M. et al (2011) studied the extraction of alkaloids and oil from Pongamia seed. Using hexane as the only organic solvent, alkaloids and oil were recovered from seeds by two extractions. The oil and alkaloids that were present as free bases were recovered first. The hexane-insoluble salts of the alkaloids that remained in the meal were converted into hexane-soluble free bases by treatment with aq. sodium carbonate or ammonium hydroxide. After the second extraction with hexane, the meal contained very few alkaloids without any protein loss. The alkaloids in the oil were then converted into water-soluble salts by treating them with aq. hydrochloric acid, and removed by repeated washing with water.

In summary, several different methods have been developed to detoxify Pongamia meal. Most just require a second stage extraction with the same solvent after some form of chemical treatment.

Cleaning the oil

De (2009) described bleaching of oil using Tonsil earth and activated charcoal and filtering under vacuum. Deodorising involved steam injection. Detection of the presence of furanoflavonoids was described. Kenkel (2006) described the cleaning of oil by degumming and bleaching.

Feeding meal to livestock

Vinnay and Kanya (2008) said the meal could be used as an animal feed after removal of antinutrients, including phytates, tannins, karanjin and glabrin. Pongamia meal after solvent extraction (SKC) was fed to young cattle up to 160 g/kg in the diet without adverse effect (Vinay and Kanya, 2008).

Several studies have been conducted on using meal in diets of broiler chickens. Panda (2008) found raw expeller cake can be incorporated at 12.5% and NaOH SKC (solvent extracted) up to 25% of the protein in the diets of chickens without affecting nutrient conversion efficiency and economics of broiler production.

However, Panda found that increasing the inclusion of SKC treated with 1.5% NaOH from 6.4% to 12.8% resulted in lower feed efficiency when growing lambs were fed treated SKC. Although karanjin was present in very low concentrations, it was sufficient to affect palatability and food intake.

Vismaya et al (2010) reported 1.9% of karanjin in whole seeds, which reduced to 0.05% after hexane extraction. Soren and Sastry (2008) did not find any detrimental effect on animal performance when feeding solvent-extracted Pongamia cake.

Kumar found similar results under in vitro conditions. There was an increased adverse effect from increased amounts of seed meal, which was not observed with the defatted (solvent-extracted) meal. The results further confirmed earlier animal studies and the view that oil should be removed completely before animal feeding.

Pongamia seed cake was used as a partial replacer of soybean meal in the rations of dairy cattle. It was concluded by Raj (2015) that detoxified karanja cake could be included in the rations of dairy cattle, replacing soybean meal, without adversely affecting milk composition and milk production efficiency.

An important aspect of protein supplements, apart from the protein content, is the amino acid profile. Soybeans are considered a complete protein because they contain all five key amino acids needed for proper nutrition. The five amino acids are lysine, threonine, methionine, isoleucine and tryptophan.

Although there is some variability in reports of the amino acid profile, there is little difference between Pongamia, cottonseed and soybean meal for these amino acids.

Using the pods

The seed pods comprise 50% of yield, with a potential for 7 t/ha or 35,000 t per annum from a 5000 ha project. In the first instance, they have value as a combustible fuel for the heating or cooking of the meal during the oil extraction process. If the pods are not used for this or there is some left over, they could be gasified and used for electricity generation – as back-up to solar power, for example.

Seed pods have biomass fuel potential

The seed pods have potential value as a combustible fuel for the co-generation of energy in power stations. Unpublished data indicated that the seed pods have a calorific value of low-to-medium-grade coal (Kazakoff S., 2011).

Power stations in Queensland are interested in biomass for co-firing with coal, while a Thai-Laotian joint venture is starting a biomass project to export pellets for power generation in Japan (Sapp, 2021).

Green coal from Pongamia

Taking this one step further, pod shells of Pongamia could be converted into briquettes (green coal) to be used as an efficient fuel or heating source in homes and businesses. Density of the briquettes is estimated to be 0.6819 g/ml, with a calorific value of 4052 cal/g. Each tree can produce about 0.1 kwh from the pod shells each year, which comes to almost 6 kwh over its lifetime.

Swami et al (2011) produced fuel briquettes from Pongamia pod shells and glycerine. “Briquettes are an eco-friendly source of renewable energy. There are two different processes to densify the material. The first, called Pyrolizing technology, relies on partial pyrolysis of the biomass, which is mixed with a binder and made into briquettes by casting and pressing. The second technology is direct extrusion, where the biomass is dried and compacted with heat and pressure.”

The most suitable composition of Pongamia biomass briquettes was a combination of Pongamia pod shells and glycerine, which were screened and crushed after drying to a moisture content of 6-8%.

Initially, the crushed Pongamia pods without glycerine failed to hold together as a briquette. Coffee husks and sawdust was used as binders and the briquette combination of Pongamia pod shell (50%), coffee husk (25%), sawdust (20%) and glycerine (5%) yielded the highest calorific value of 4855 Kcal/kg. The sample containing glycerine to 5% was the best product, but as the glycerine rate increased, there was a reduction in the calorific value.

Renewable fuel from cellulose

It is possible that Pongamia pods separated from seeds could be used for biodiesel, and this use may have an income potential better than using them for biomass.

Advanced biodiesel can be produced via gasification of lignocellulosic feedstocks or biogenic wastes to produce syngas, which is then converted from biomass to liquid (BtL) via the Fischer Tropsch process (which converts a mix of CO and hydrogen into liquid hydrocarbons) (ETIP Bioenergy, 2021).

Hayward (2014) outlined a two-step process, with the conversion of biomass to crude bio-oil, followed by conversion to jet fuel. The cost of biomass‐based jet fuels is estimated to be $0.70-1.90 L-1 when the efficiency of conversion of biomass to biocrude and subsequently to aviation fuel is varied by ±10% of published values, with an average value of $1.10 L-1. This is within the range of the projected 2035 conventional jet fuel price of $1.50 L-1. Hayward’s conclusion was that biomass‐ based jet fuel had the potential to contribute to Australia’s jet fuel needs in the future.

The value of pods

If the value of thermal coal is in the vicinity of $100/t, then pods should be, on the basis of calorific value, valued at about $80/t. If they are considered to be a waste product, the pods would probably bring a lower value of perhaps $50/t, but if green credentials or carbon credits are being sought, the pods may be worth $140/t.

Other potential uses and byproducts

A significant aspect of the processing of Pongamia is that the 3-4% of sludge that needs to be removed in the oil cleaning process contains medicinal compounds and other chemicals that have been used to formulate insecticides and antibiotics. Research is being conducted on these compounds in India and Bangladesh, and this sludge may one day become the most valuable part of the Pongamia seed.

Pharmaceuticals and medicines

Pongamia contains useful alkaloids used in many traditional medicines (Usharani, 2019).

Muqarrabun (2013) reviewed current knowledge on the medicinal uses of Pongamia. “Several different classes of flavonoid derivatives, such as flavones, flavans and chalcones, and several types of compounds, including terpenes, steroid and fatty acids, have been isolated from Pongamia, with various biological activities, such as antioxidant, antimicrobial, anti-inflammatory, and anti-diabetic activities.

“The results of several toxicity studies indicated that extracts and single compounds isolated from Pongamia did not show any significant toxicity and did not cause abnormality on rats’ organs. Pongamia has a potential to be used as an effective therapeutic remedy due to its low toxicity towards mammalian cells.

“The traditional medical uses of the seed and seed oil include treatment of Keratitis, urinary discharges, piles, ulcer, chronic fever, rheumatism, leucoderma, lumbago, scabies, leprosy, bronchitis, whooping cough, chronic skin diseases, wound treatment, chronic fever, hypertension, and liver pain.”

Insecticides

The Pongamia tree has good defence mechanisms against attack. Compounds in the leaves and seed deter cattle from eating Pongamia, and very few insect pests attack it. It is not surprising, therefore, that some of the chemicals extracted can provide useful control, not only of insects but also of viruses and bacteria.

Extracts of Pongamia have been reported to be effective against insect pests in stored grains and on crops, acting as a deterrent to oviposition and as antifeedants and larvicides against a wide range of pests (Kumar and Singh, 2002). A water-oil suspension of up to 2%, has generally been used as a spray to achieve the desired insect-inhibiting effect (Pavela and Herda, 2007).

Karanjin is extracted from Pongamia pinnata and is a potent deterrent to many different genera of insects and mites in a wide range of crops (Usharani 2019). “Karanjin has a dramatic antifeedant or repellent effect, with many insects avoiding treated crops. It suppresses the effects of ecdysteroids and thereby acts as an insect growth regulator and antifeedant. It inhibits cytochrome P-450 in susceptible insects and mites.”

According to Copping (2007): “Seed and seed oil extracts exhibited insecticidal activity against a number of species, including head lice and mosquitoes.”

In India, a novel insecticide for mosquitoes has been developed from products left after the extraction of oil from Pongamia seed. Megha (2016) described the process and reported high mortality rates, and concluded that formulations are of low cost, are environmentally friendly and are less toxic than the synthetic active ingredients. It would seem that there is a huge potential for such an insecticide and given that much spraying of mosquitoes is in or close to urban areas, the relative safety of the product may be appreciated.

Antimicrobial activity

Antimicrobial activity is of particular interest, with various extracts exhibiting antibacterial activity against a broad spectrum of gram-negative and gram-positive bacteria. Oral administration of quercetin, extracted from Pongamia, protected guinea pigs against an induced Shigella infection that killed untreated control animals (Muqarrabun, 2013).

A crude aqueous extract of the seed completely inhibited the growth of herpes virus. Seed oil showed antifungal activity against Aspergillus niger and several other species. Effects on protozoa, anti- inflammatory activity and treatment of ulcers were also recorded (Muqarrabun, 2013).

Karanjin at concentrations of 20 mg/kg bw, when administered orally for 14 days, did not indicate any lethal effects and inhibited 50% and 74% of ulcers in rats induced by swim stress at 10 and 20 mg/kg bw, respectively (Muqarrabun, 2013).

A medicinal use being investigated is to develop a Pongamia pinnata general flavone extract in the preparation of influenza virus treatment and/or prevention drugs. The flavone extract is extracted from stem branches and/or leaves of Pongamia pinnata. This is described in the patent application: Application of karanjin or Pongamia pinnata extract in anti-influenza virus drugs (Google Patents, patent application number CN104248654)

Pathways for Pongamia development

Barriers to Pongamia

Pongamia is a carbon factory in the guise of an oilseed crop. But no one recognises a tree as an oilseed crop. One of the biggest barriers for a Pongamia industry to overcome is rejection because it does not fit the mould of a particular sector or interest. It needs to be recognised as a multi-product industry that could help boost the Australian economy in several ways.

A lack of research is another barrier to Pongamia development. There is a need for basic research to improve yield and oil quality, and practical research to solve problems that emerge along the way. But who researches a tree that produces oil, biomass fuel and livestock feed, the leftovers of which can be made into an insecticide for mosquitoes? A change in thinking may be needed and a cooperative research program established.

The cost of a project that requires a processing plant is a barrier. The economic study has used a project of 5000 hectares to justify the cost of the processing plant required to extract the oil and treat the meal. This processing plant is estimated to cost $25-30 million, with the total cost of a 5000 ha project in the vicinity of $116 million.

Although cost is an entry barrier, there are many energy and agricultural firms that could undertake such projects, either alone or in a joint venture. There has been interest from companies in joint ventures to grow a Pongamia industry.

Once processing plants have been built, it is likely there will be opportunities for smaller areas of Pongamia to be grown and for growers to have their seed harvested and processed on contract. In some cases, growers may reclaim their meal for livestock feed or drought management, in much the same way as what happens in the cotton industry.

The time lag for production and income is perceived as a disadvantage, but the profitability of the project is the key element, as shown by investment in macadamias, almonds and oil palm.

One of the current barriers to a Pongamia industry is developing confidence that the technology is ready and the economics stack up. It is a big challenge to be first in a new industry.

Synergies and advantages

A large Pongamia project would complement a large cattle property or group of properties, providing income from oil and a large supply (about 4 t) of protein meal per hectare of Pongamia for cattle and about 7 t/ha of pods, which could be gasified to provide back-up power to a solar farm.

Pongamia is one of the few options that could produce a profit from moving to carbon-neutral beef production. There are some surprising outcomes, like a reduction in methane emissions from beef cattle when a poor-quality diet is augmented by a protein supplement. Most cattle operations in northern Australia would experience a huge lift in annual profit, from about $2 million to $15 million, with 5000 hectares of Pongamia.

A large Pongamia project may also fit well with coal miners and power generators. In some cases, there are land and water assets available that could reduce the project cost by as much as 50%.

Pongamia has been demonstrated to grow well in rehabilitated mines, and is one of the few options that could make a profit in such a situation.

There is also potential in large areas of coastal Queensland, from Kilcoy to Cooktown, where beef cattle production is in slow decline due to nitrogen deficiency.

The general population of Australia will benefit from this research as a result of the contribution Pongamia will make to economic development and to managing climate change.

Implications for potential stakeholders

Industry and communities

This report provides information for individuals, companies and communities to assess the potential of Pongamia.

Whatever the pathway, a detailed feasibility and financing study should independently examine and corroborate the assumptions and projections. The data in this report and referenced material may be a good starting point for this process.

Policymakers

Incentives or grants may help the industry to start and for investors to overcome the reluctance of building the first major project. There is no reason why Pongamia should be less worthy of the assistance and incentive grants that solar and wind projects have received in the past, and batteries and hydrogen in the future. For example, three hydrogen projects were recently awarded grants of about $30 million each.

A feature of Pongamia is that it is ‘home-grown’ and is not simply a project that installs equipment made overseas. The economic stimulus from Pongamia is likely to repay government assistance in the form of taxes of various kinds. For starters, as much as 30% of the development cost of a Pongamia project is likely to come back to the government via income tax, payroll tax, fuel tax and GST.

State governments are also interested in economic development and biofuels, and may have additional roles with regards to the regulatory areas of tree clearing, water management and environmental permits.

Companies interested in Pongamia

Over the last few years, BPA has had enquiries about the production and supply of biofuels and/or biomass. Some of these were referred by Professor Peter Gresshoff at the UQ Centre of Excellence for Legume Research, and some from the business development section of the Queensland Government.

Some years ago, Qatar Airways requested BPA send a delegation to Qatar to present the case for producing biofuel from Pongamia oil for use as a jet fuel blend to help with offsetting carbon taxes imposed at several European airports. One difficulty was indicating there was sufficient cleared land in the suitable climatic zone for Pongamia to enable more than 100,000 hectares of plantations to meet their annual demand.

Interest has been shown from Japanese power generating companies. Their interest was in response to the tsunami at Fukushima and the loss of the nuclear power station. Palm oil is being used, which is not considered appropriate due to environmental issues. Pongamia was considered favourable.

They hoped to do a direct offtake agreement, a joint venture or operate independently in Australia. However, if land was not available within Australia, the intention was to operate in other places, such as Africa or Cambodia, where there were significant areas of underused land and where such projects are supported by the government. One company was in advanced discussions and BPA planned to travel overseas to assist with land evaluation for Pongamia, but this was prevented by the COVID-19 pandemic limiting international travel.

It is interesting to note that a Thai-Laotian joint venture is developing a biomass pellet project to provide renewable fuel for Japanese power stations.

As well as announcing a scale-up of their Pongamia project in Paraguay, Investancia recently secured an offtake agreement with the ECB Group for 300,000 t per year of Pongamia oil.

BPA is also in talks with another major European company with interests in South America, with trials due to commence shortly. The hope is production can be ramped up to enable large-scale supply for a renewable diesel project.

Since the release of a press article on this project reviewing Pongamia, there have been requests for information from a large Japanese energy company, a Queensland energy company, one private cattle company and one large corporate cattle company. Other interest has come from a group looking at options for development in Papua New Guinea.

As well as these enquiries about large biofuel projects, there have been many enquiries about smaller projects from farmers and other interested parties.

Appendices

Appendix 1. Pongamia as a HVO feedstock

Success of Pongamia oil as an advanced HVO feedstock

Article from Biofuels International, 10 June 2021 (extract), https://biofuels-news.com/news/success- of-pongamia-oil-as-an-advanced-hvo-feedstock/

Figure 24. Investancia’s Pongamia Research and Propagation Centre, Paraguay. Source: Biofuels International, 10 June 2021, biofuels-news.com/news/success-of-pongamia- oil-as-an-advanced-hvo-feedstock/

Global demand for advanced feedstocks from sustainable sources is outstripping the supply, with hydrotreated vegetable oil (HVO) demand expected to increase substantially. Refiners in Europe are currently building three times more HVO production capacity than what can be supported by readily available feedstocks. In the US, a 10-fold overcapacity is estimated, meaning worldwide HVO refiners might face largescale short supply.

Controversial palm oil

As corporates are turning their backs on palm oil in energy applications for sustainability reasons, the need for an amplified range of advanced feedstock streams is bigger than ever. This is in light of the EU’s accelerated transport sector decarbonisation trajectory with Renewable Energy Directive (RED II) through the 2030s. By 2030, 14% of Europe’s road transport fuels should come from renewables, a 4% rise from the target adopted for 2020.

As demand surges and HVO refiners struggle to secure sufficient long-term streams of sustainably produced feedstock, agroforestry and research company, Investancia, offers Pongamia as a potential solution to bridge some of the gap.

Investancia was founded in 2013 and is backed by a European group of shareholders. The company is headquartered in the Netherlands, while its local forestry operations are based in Paraguay.

From its tree propagation site in Alto Paraguay, Investancia produces Pongamia oil, an advanced and highly scalable renewable feedstock with low indirect land use change (ILUC) making it one of the best feedstock choices for HVO and SAF production due to its extremely low CI levels.

Positive impact

Unlike most next generation vegetable and waste oils, Pongamia oil has a positive climate impact resulting from its agroforestry practices applied by Investancia. Pongamia, or Pongamia pinnata, is a fast growing, evergreen legume tree that develops pods bursting with oil-filled beans.

The oil is produced sustainably from Investancia’s reforestation activities in Paraguay and goes under the category of low-ILUC as the trees are implemented on cattle land in silvo pastoral systems, a form of agroforestry that combines trees and grazing livestock. This way any issues related to displacement of cattle or any other ILUCs are avoided. Investancia even considers Pongamia to have a negative ILUC value, due to it being a legume tree that fixes atmospheric nitrogen through its root nodes and thereby auto-fertilises itself and the surrounding soil, which promotes vegetation growth, making it possible to put even more heads of cattle on to the same land.

As reported by MEO Carbon Solution (part of ISCC), the oil has one of the lowest CI levels of all available feedstocks. In direct comparison with that of soybean oil, Pongamia comes out three times lower on the CI scale. The company has received feedback from an energy and sustainability consultancy firm studying new feedstocks to be included in RED II Annex IX, that showed the crop is already considered to be a waste-based feedstock under part A in Annex IX of RED II.

Reforestation

Deforestation and the loss of biodiversity is a growing issue around the world, particularly in the Gran Chaco, South America’s second largest forest area, where the deforestation rate has been rising, with 14.2 million hectares of native forest land lost to deforestation during a 30-year period.

As cattle ranching is the number one driver of deforestation in the Gran Chaco, Investancia has come up with a business model that aims to reforest these degraded areas and re-establish its biodiversity while also supporting the local economy and the farming industry.

Investancia’s Pongamia R&D and tree propagation centre currently has a production capacity of 1 million trees per year, which on an annual basis reforests a total of 2,500 hectares of degraded land in the Gran Chaco that was deforested more than 10 years ago. The company recently announced a deal with ECB Group to supply its under-construction Omega Green HVO refinery with 300,000 Mt per year of Pongamia ‘reforestation oil’ feedstock by 2030. To meet this demand, Investancia aims to boost its production capacity by planting up to 50 million trees over the coming decade.

Its impact is not limited to reforestation oil. The trees also result in high levels of carbon sequestration from the atmosphere. Each tree sequesters an average of 44kg of CO2 per year, which currently is the most of any oil-producing crop.

The oil has the potential to become a game changer in closing some of the short supply gaps. By sourcing the oil, refiners ensure a renewable low CI feedstock from a climate positive Agro based production enterprise that contributes to the UN Sustainable Development Goals, aligns with corporate ESG efforts and supports GHG reduction targets. For more information: investancia.com

Appendix 2. Carbon prices must rise

Tristan Edis is an energy, carbon markets and technology analyst at Green Energy Markets. The following is an extract of an interview he did with The Eureka Report’s Alan Kohler in September 2020. A transcript of the interview is available here: https://www.eurekareport.com.au/investment- news/is-australia-heading-for-another-emissions-trading-scheme/148708

Tristan, do you think we’re heading for an emissions trading scheme again in Australia?

“I suppose the deluded side of me says, yes, that just [looking] at the underlying logic of economics would suggest, yes, we are … the government already has a type of carbon price scheme in place, it’s called the Emission Reduction Fund, which they’ve sort of rebadged as the climate solutions fund … Taxpayers pay for the purchase of that abatement, but it has a serious problem with it. The money that’s being allocated to it, the funding, is not getting anywhere in terms of buying enough volume to achieve the government’s targets … we’ve had one auction after another and we’re not getting anywhere near the volume of abatement we need … Taxpayers can’t keep on paying for this, it has to be paid for by the polluters themselves.”

They get away with this because they’ve got a relatively soft set of targets for emission reductions, but I suppose the question is whether they actually have to sign up to, in Glasgow in November, a net zero emissions by 2050 target, which – I don’t know, the last time I saw, that was what Glasgow was heading for.

“Yeah, I think there’s two sides to this. One is that it’s obvious to people that closely observe this that the government is not even on track to its relatively weak 2030 target … And the second thing you say is, well, you’re not going to achieve the amount of abatement required from the emission reduction fund. …”

“If Biden wins, then you’ve got both the US and Europe aligned up against Australia, saying, ‘Hey mate, we’re going to pull our weight, we want you to pull your weight and we’re aiming for net-zero emissions by 2050, you need to do the same.’ The other issue we’ve got is China, just in the last week, President Xi has come out saying that they’re going to aim to achieve net-zero emissions, not by 2050, just a bit later, by 2060. If you have those three great powers aligned against us, well, guess what’s going to happen, we’re going to buckle. That means, not only is it about the 2030 target, it’s about net-zero emissions. If you look at net-zero emissions, well, you go the 2030 target’s a joke too, we need to go much harder. …”

If you were a betting man, Tristan, what would you think once that happened the government would turn to? Would it be the old NEG or Alan Finkel’s clean energy target or some other new version of it?

“… Every single major emitter in the country actually has a pollution cap applied to them right now, it’s just that that cap is very, very weak. And so, they could, through no real change of policy or actually even a change in legislation, actually just through a changing regulation, they could steadily tighten the caps applying to emitters under the safeguard mechanism and that way, drive essentially a carbon price.”

Under the safeguard mechanism, can the emitters buy certificates that let them off and which are then tradeable, so it becomes an emissions trading scheme?

“That is already the case. There have been only a small number of cases but there have been some cases of businesses that have exceeded their safeguard mechanism cap and they have had to go out and buy emission reduction credits, carbon credits. That has already happened…”

And where do they buy them from?

“They can buy them from people that are doing planting of trees or enabling very – the main areas are really areas that are marginal farming land and what you do is you simply remove the sheep and the cattle from those areas and allow the trees or really, the bushes, to regenerate. That is one of the main mechanisms through which you can create these carbon offsets.”

Do these carbon offsets that are created like that, create a certificate or something that the over- emitters can buy?

“Yeah, they’re able to create a carbon credit right now under the existing government’s regime, setup by Greg Hunt while Tony Abbott was Prime Minister. That mechanism is well and truly there, it’s working right now but the problem is the scale. There just isn’t enough demand to drive meaningful scale. There is no reason why they could not also introduce a new, what they call methodology, where you could create carbon credits through large wind farms or solar farms. It would be a very straightforward regulatory change and then they could create very large volumes of these abatement certificates, which then would be bought up by heavy emitters.

“My understanding is, that we already have some major oil and gas companies that are entering into agreements – these are all off-market, so nothing is disclosed publicly, but my understanding is a number of them have already entered into major agreements with abatement suppliers like people that are involved in tree planting and revegetation of degraded land, such that they could purchase abatement from them at the point at which they needed it. So they’re already preparing in advance and they’re signing onto contracts just in case this type of policy change were to take place.”

Do those deals involve a price?

“Absolutely, they involve a price. Now, that price is probably not much above what the market premium is now. These carbon credits are traded through a brokered market. There are a series of brokers that you can go to and buy these carbon credits. At the moment, the price is trading at roughly around $16 a tonne, so I imagine these industrial emitters, these oil and gas companies probably aren’t paying much more than that market price and maybe they’re possibly paying even less because they’re signing up for very large volumes over a very long period of time.”

Well, that’s roughly the price that the Emissions Reductions Fund is paying.

“… The government auction is essentially setting a floor price for those credits …”

It makes a lot of sense that that’s how an emissions trading scheme would actually emerge in Australia, that they’d use the safeguard mechanism. Tell us about the caps that currently exist under that …

“… the safeguard is not really acting as any kind of safeguard against emissions continuing to rise. Really, for this to be meaningful … I’d be expecting you need to see something between a 15 per cent and a 30 per cent reduction in the safeguard caps applying by 2030 to be really driving things on a trajectory consistent with net zero by 2050.

“But those safeguard caps do not apply to electricity generation facilities, so you need something extra in the electricity sector to drive change. Either that, or you essentially allow renewable energy projects to create carbon credits and then on-sell them to these industrial facilities.”

What do you think of Alan Finkel’s hydrogen strategy? …

“… [The government has] a target of hydrogen achieving $2 a kilogram … in this low emissions technology roadmap. The issue there is that still works out to about $14-15 per gigajoule of energy and people are complaining about gas at $12 a gigajoule, so you still land in a space where you go, okay, government, you achieve all your targets, people are still not going to buy hydrogen. …

“The other issue though is the money that the government has put forward to drive hydrogen research development and progress is miniscule. …

“The problem is you lend money to a hydrogen project today, it’s not going to be able to pay the loan back, it’s not going to be able to generate a profit. This is about blue-sky research that’s about driving development so that in the future down the track it’s only moderately more expensive than fossil fuel alternatives. But that’s 10 years away and in the meantime, we’ve got no mechanism in place that would drive people to want to use hydrogen instead of the conventional alternatives.”

And you’re saying that the mechanism you need is a price on carbon?

“That’s exactly right, you need that, but in addition you’ll also need other additional funding support like what Germany and France have announced for their hydrogen sector. For it to be serious, you need several billion dollars. …”

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