North Queensland sugar industry invests in renewable energy and ethanol as transition strategyUpdated

North Queensland's sugar industry — centred on the cane-growing districts of the Burdekin, Herbert, and Johnstone river valleys south of Townsville — is in the middle of a strategic transformation that is diversifying its revenue streams beyond raw sugar export to include renewable electricity generation from bagasse combustion, ethanol production from mill-generated molasses, and the speciality food markets that pay premium prices for raw, organic, and specialty sugars.

CSR Limited's Mackay Sugar operations and Wilmar International's North Queensland mills are the major producers, collectively processing approximately 85 per cent of North Queensland's cane output. Both companies have invested in co-generation infrastructure that burns bagasse — the fibrous residue after cane juice extraction — to generate electricity that is exported to the Queensland grid during the crushing season, providing a significant renewable energy contribution and a meaningful additional revenue stream.

The ethanol program, in which molasses is fermented and distilled to produce fuel-grade ethanol blended into Queensland's petrol supply under the state's mandatory ethanol blending policy, has developed into a commercially significant activity for several mills, diversifying their revenue beyond the raw commodity exposure of the sugar market where prices are set on the New York and London futures exchanges.

The industry's carbon footprint has been a growing focus, with cane farming's use of pre-harvest burning — which releases particulate and smoke over communities near the cane fields during the crushing season — subject to increasing regulatory scrutiny and community pressure. Several growers have trialled green harvesting methods, which do not require pre-harvest burning, and the industry's own research body is assessing the economic and agronomic implications of a transition to green harvesting at scale.

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