Rio Tinto Signs Bio Pellet Deal to Cut Up to 90,000 Tonnes of CO2 at Gladstone

Rio Tinto has signed a five-year offtake agreement with Australian bioenergy company SuperChar Limited to supply locally produced bio pellets for use at its Gladstone alumina refineries, with deliveries targeted to begin in 2028. At full contract volumes, the agreement could reduce reported Scope 1 emissions by up to 90,000 tonnes of carbon dioxide equivalent annually under Australia's National Greenhouse and Energy Reporting framework, following trials that demonstrated bio pellets could replace up to 30 percent of the coal used to generate steam in refinery boilers. The project remains subject to regulatory approvals and operational readiness at both Gladstone sites.

 

Why Bana Grass Was Chosen as the Feedstock

 

SuperChar plans to establish a bio pellet production facility in the Gladstone region using locally grown bana grass, a high-yielding perennial energy crop suited to Central Queensland's climate. The crop's practical advantages are significant for a commercial bioenergy supply chain: it can be planted and harvested using conventional sugar cane equipment already familiar to the region's agricultural sector, and it remains productive for more than 15 years once established, avoiding the annual replanting costs and disruption that many energy crops require.

That combination of existing equipment compatibility and long productive lifespan is what makes bana grass a commercially viable feedstock choice rather than merely a technically suitable one. A biomass supply chain depends on farmers being able to grow, harvest and deliver feedstock reliably and profitably over many years, and choosing a crop that fits into existing regional agricultural infrastructure lowers the barrier for local farmers to participate in the supply chain SuperChar is building.

 

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How Bio Pellets Actually Substitute for Coal

 

Alumina refining requires substantial steam generation to process bauxite into alumina, historically supplied by burning coal in refinery boilers. Bio pellets, compressed biomass fuel made from bana grass, are designed to be blended with coal and burned in the same boiler infrastructure, meaning the substitution can occur without requiring entirely new combustion equipment, a significant practical advantage since replacing boiler infrastructure outright would represent a far larger capital investment than adjusting the fuel blend feeding existing boilers.

Under the agreement, Rio Tinto plans to test bio pellet blends ranging from 5 to 50 percent as a supplement to coal, a range considerably wider than the up-to-30-percent replacement rate the initial trials demonstrated. That broader testing range suggests the company is deliberately exploring both more conservative and more ambitious blend ratios to establish where the practical and economic limits of substitution actually lie, rather than committing immediately to a single blend level based on trial results alone.

 

Why the Qualifications Matter

 

Several explicit caveats run through this announcement that are worth taking seriously rather than glossing over. The demonstrated 30 percent coal replacement figure was achieved "under trial conditions," which may not translate directly to sustained commercial-scale operation. The 90,000-tonne emissions reduction figure applies only "at full contract volumes," a ceiling rather than a guaranteed outcome, particularly since the agreement explicitly frames this as an initial offtake with "scope to increase supply over time if the project is successful," language that signals the current agreement is a stepping stone rather than a locked-in commitment to that full volume.

Most significantly, the establishment of the production facility, the commencement of bio pellet production and the use of bio pellets at either Gladstone refinery all remain subject to regulatory approvals and operational readiness. That combination of qualifications means the pathway from this signed agreement to the stated 90,000-tonne emissions reduction involves several discrete steps, planting bana grass at scale starting late 2026, building and commissioning the production facility, securing regulatory approval, and successfully scaling operational trials, each of which could affect the timeline or ultimate volume delivered.

 

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What This Means Beyond the Refinery

 

Rio Tinto's Armando Torres framed bio pellets as one of several practical options being explored to reduce the alumina refineries' reliance on fossil fuels, alongside other technologies and partnerships, rather than a singular solution. He also pointed to a secondary benefit: the potential for the project to support new agricultural and industrial supply chains in Central Queensland, connecting local farmers to industrial energy demand in a way that could create regional economic opportunity beyond the emissions reduction itself.

SuperChar's Michael Palmer described the agreement as demonstrating the potential for regeneratively grown local biomass as an alternative industrial fuel, building on years of prior collaboration between the two companies. Whether the operational demonstrations across the 5 to 50 percent blend range confirm the trial results at commercial scale, and whether the necessary regulatory approvals and bana grass planting proceed on the timeline needed to hit 2028 deliveries, will determine whether this agreement scales toward its full 90,000-tonne emissions reduction potential or remains a more limited initial step.

 

Source: Rio Tinto