The Circular Economy in Action: How Northern Oil Refinery’s Success at the Gladstone SDA Offers Hope for Australia’s Low-Carbon Future

3 Jul 2023

Mining and heavy manufacturing sectors are responsible for one-third of Australia’s carbon emissions, and there’s a strong and growing expectation from government and community that these companies rapidly decarbonise. We sat down with Troy Collings, Director of Corporate and Regulatory Affairs, at Northern Oil Refinery, who shared his thoughts on how a circular economy approach to emissions reduction can benefit companies considered difficult to decarbonise.

In 2014, one of the most advanced and environmentally sustainable waste oil recycling plants in the world – the Northern Oil Refinery (NOR) – was established in Queensland by Southern Oil and JJ Richards and Sons. The refinery has the capacity to process Queensland’s entire waste lube oil production, and the vast majority of Australian mining companies send their waste to Northern Oil to be recycled. The location chosen for this ground-breaking, eco-efficient facility was the decarbonisation hub at Yarwun, in the Gladstone State Development Area (SDA).

The availability of SDA land and the ease of negotiations facilitated by Economic Development Queensland (EDQ) proved to be the deciding factor for Southern Oil to invest around $85M in establishing NOR in Gladstone. Collings elaborates: “The SDA facilitated a quick approval process. We always say that our experience of getting our environmental and development approvals was extraordinarily streamlined. The departments [The Department of State Development, Infrastructure, Local Government and Planning; Department of Environment and Science; EDQ and the Coordinator-General] were excellent.”


Re-refining success

Northern Oil is an enviable business. At present, up to 30% of Australia’s waste lube oil – or about 100 million litres per year – is processed at the SDA by the refinery. “We collect the waste oil so it’s not dumped or burnt. It is then transported and refined [to the same quality] as new oil,” says Collings. NOR’s re-refining process is extremely eco-efficient with only one-eighth of the carbon footprint of burning that same waste oil for energy recovery. The refinery additionally produces around 15million litres of Vacuum Tower Bottoms (VTB) – waste from the distillation process – which they refine into a useful bitumen additive rather than disposing of it as waste. Collings adds, “We produce zero trade waste – which is quite extraordinary. There aren’t a lot of businesses – let alone refineries – that can claim that.”


The benefits of participating in a circular economy

Collings credits much of NOR’s success – both economically and as an environmentally and socially responsible business – to being part of a circular economy at the Gladstone SDA. The refinery benefits from its co-location with a large supply of used waste oil (from local mine sites) as well as proximity to transport, skilled labour, a deep-water port, and even built-in customers: “We sell some of our re-refined products to a number of local manufacturers and businesses in Gladstone – as well as exporting overseas – other major benefits of setting up in the Gladstone SDA”.

With Australia’s economy transitioning towards a low-carbon future, companies are seeking to balance reducing their emissions with keeping their business models intact. When asked about the feasibility of affordable decarbonisation for industries typically considered ‘difficult to decarbonise’, Collings responded positively: “The short answer is ‘yes, [it’s doable].’ But you need to consider the full business value proposition and do it in a considered way, acknowledging that one size does not fit all.” Being part of a circular economy, particularly in a flourishing decarbonisation hub like the Gladstone SDA, offers many opportunities for businesses looking to decarbonise their own operations and contribute to Queensland’s sustainable and economic future.

NOR’s operation in Gladstone offers some as yet untapped opportunities for other businesses to benefit from co-location in the region. The company exports much of its re-refined oil to overseas lube and bitumen makers. However, it hopes to see the establishment of domestic lube oil-blending and bitumen manufacturing capacity in the region. This could support local businesses, contribute to Australia’s decarbonisation efforts, reduce the industry’s carbon footprint, and strengthen domestic capability. Collings added, “If we’re actually producing our bitumen locally for our local and state roads, then that surely is [preferable] should there ever be any serious geopolitical issues that causes [supply chain issues or] constraints.”


Accelerating Queensland’s bio-future

Northern Oil Refinery is expanding its waste-to-value operations in the Gladstone SDA with new projects on the horizon, including a possible renewable diesel and sustainable aviation fuel biorefinery. This Queensland biofuel refinery would significantly reduce emissions from airplanes and heavy vehicles as well as accelerating the state’s bio-future. NOR is also working with CSIRO on a project looking into converting waste gases from the refinery into truly sustainable hydrogen, and if successful will adapt the process to harness gases from landfill as well.

The Gladstone SDA is an ideal location for these new projects to come to fruition for NOR and the company’s potential supporting players. As Collings states, “Now we’re looking at sustainable aviation fuel, it links back again to the idea of co-location: [companies] are doing things anyway, individually, but if we were closer together, we’d be better vertically integrated.”

Northern Oil Refinery’s success shines a light on the advantages of working with EDQ and engaging in the circular economy at the Gladstone SDA: an exemplar for how companies can cut their carbon emissions, improve their financial prospects, and contribute to a brighter, low-carbon future for Queensland and the planet.

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