Eucalypts (oil)


Eucalyptus oil is commercially extracted from the leaves of a number of species of eucalyptus trees, including blue mallee gums, narrow-leaved peppermint gum and Tasmanian blue gum. The main component of eucalyptus oil is 1,8-cineole, a natural organic compound that has anti-inflammatory properties. Eucalyptus oil is used in a range of products from pharmaceuticals to cleansers.


The species of eucalyptus grown for oil production are indigenous to Australia but are now grown in many other countries including China, Spain, Portugal and India. There are over 600 species of eucalypts and all have eucalyptus oil in their leaves, however, only about 20 species of eucalypts have been found to have enough oil of economic value to be produced commercially and the entire world production comes from less than ten species.

In the 1940’s Australian eucalyptus oil production was around 1,000 tonnes a year, down to about 120 tonnes a year in 2011-12, with about 100 tonnes of this exported. The major export markets for Australian eucalyptus oil are the United States, New Zealand, Thailand, Hong Kong and Canada.

Oil-bearing eucalypts (more specifically, oil-bearing mallees, which are the current most likely trees for oil production) grow well in many parts of Australia thriving in steep country and on a wide range of soils. The most commercially successful production to date has been on the light sandy soils of the Western Plains of New South Wales, the drier parts of Victoria and South Australia and in the wheatbelt of Western Australia. Some species can grow well in rainfall down to 350mm per year but do better in slightly higher rainfall areas.

The main species grown world-wide for commercial production of eucalyptus oil is Eucalpytus globulus, commonly known as the blue gum, with many export markets specifying this oil. However, Eucalyptus polybractea is the main species grown in Australia but as it is not the standard for trade it is rejected in many markets. E. polybractea is grown in Australia because it is superior in terms of quality and yield and can be machine harvested, however, available markets can be a challenge. Eucalypts grown for oil production are also grown for salinity control, carbon sequestration and preservation of wildlife diversity.

Commercial eucalyptus oil production in Australia can be considered a risky, complicated and capital intensive operation. Varying grades of oil and a limited range of markets provide challenges for commercial production of oil.

The Essential Oil Producers Association of Australia is the industry body for eucalyptus oil producers in Australia.

Facts and figures

  • World demand for cineole rich eucalyptus oil is estimated at about 3,000 tonnes per year
  • World production potential from existing trees is over 4,000 tonnes per year
  • Eucalyptus polybractea, commonly known as blue mallee, is the tree most widely grown for oil production in Australia
  • Selection of plant material is critical as oil chemistry can vary significantly within a species and the market will be very specific in its requirements for oil quality
  • Consistently high product is essential for the industry
  • New product development is key to maintaining a successful industry in Australia

Production Status

The main areas harvested for eucalyptus oil production in Australia are around Bendigo in Victoria and West Wyalong in New South Wales. Much of the harvest in Victoria is from public land and a royalty is paid to the Victorian Government for harvesting rights.

In 2004, the Western Australia state government established large-scale plantations (14,000 hectares) to address environmental degradation issues, specifically salinity and greenhouse gases, through the profitable growing of mallee trees. The planned outputs include eucalyptus oil and energy generation through the production of activated carbon, charcoal and fuel for electricity.

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Map of current and potential growing regions


Eucalyptus oil is used in a wide range of pharmaceuticals, cleansers, flavours and insect repellent. Different types of oil can be produced but it is oil rich in cineole that is now produced in quantity.

Production Requirements

Growing regions

Oil-bearing eucalypts occur naturally in Australia but oil-bearing mallees specifically, are the most likely candidates for commercial oil production. Sustainable production relies strongly on plantation management and future production will be based on plantations of specific species or harvesting of trees grown for other purposes, such as salinity control.

Oil-bearing eucalypts will grow well in many parts of Australia, but work to date shows that oil-bearing mallees such as E. polybractea, thrive best on the light sandy soils of the Western Plains of New South Wales, the drier north western areas of Victoria, drier areas of South Australia and much of the wheatbelt of Western Australia.

Soil type

Eucalypts can grow well in a range of soils but the most commercially viable eucalypt for oil production, E. polybractea, grows best on light sandy loams through to heavier and deeper red loams. Black and red clay soils, self-mulching clay soils and soils that suffer water logging should be avoided. Some eucalypts do well in saline soils, and are often grown to manage soil salinity.


Eucalypts can grow well in a range of climates with low to medium rainfall of 250-600mm per year. E. polybractea grown for essential oil production can grow in areas of rainfall down to 350mm/year but does better in slightly higher rainfall areas.


There are a number of species of eucalypt that have been grown in Australia for oil production. The highest quality oil is obtained from E. polybractea which also produces better yields and is suitable for mechanical harvesting. However, it is important to understand that E. polybractea is not the standard Eucalypt for trade and will be rejected in many markets providing an additional challenge in finding a buyer.

Eucalypts grown in Australia for oil production:

Eucalyptus polybractea commonly known as ‘Blue Mallee’ is a medium size mallee tree with rough grey bark and varying coloured leaves. It grows well on a range of soils from sandy duplex to heavy clays. It has some tolerance for salt and waterlogging but does best on well drained sites. Polybractea is not suited to light country in dry areas of variable to low rainfall. The yield of oil varies between 1.5% and 2.5%. The crude oil is high in cineole at between 80% and 88%.

Eucalyptus radiata var. australiana, commonly known as ‘narrow-leaved peppermint’ is a medium size tree with fibrous bark. It occurs in extensive areas in Victoria and the south coast districts and southern highlands of New South Wales. The yield of oil averages between 2.5% and 3.5%. The crude oil has a cineole content of 65-70%. The leaves cannot be mechanically harvested in the same way as E. polybractea and so production has fallen as costs have become too high.

Eucalyptus citriodora, commonly known as the ‘lemon-scented gum’or Corymbia, is a large tree with a smooth whitish pale pink bark. Readily identified by the fragrant ‘citronella-like’ odour of the crushed leaves, it grows extensively in Queensland in natural stands. The oil yield from forest trees varies from 0.5% to 0.75% and from cultivated trees up to 2%. The principal constituent of the oil is citronellal and the oil is used for industrial and perfumery purposes. Large quantities of oil were once distilled in Queensland, however, Brazil and China which have extensive plantations, now produce almost all the oil from this species.

Eucalyptus loxophleba ssp. lissophloia, is a tall mallee with large glossy leaves and smooth bark. This species grows on a range of sandy, duplex and clay soils but does best on heavy clay/loam sites. It has some salt and waterlogging tolerance but does best on well drained sites.

Planting and crop management

Sourcing trees for planting requires careful management as it is essential that the trees have a high cineole content. Oil quality is a trait that is inherited from the parent tree but also needs to be managed by growing under environmental conditions suitable to the species. Unfavourable regions, soil type, climate and competition from other species can affect oil quality. Growers manage this through ensuring the trees express the correct chemo type.

There are no Australian registered or assured suppliers of eucalypts for commercial oil production and so growers must manage the sourcing of trees very carefully, for example, when ordering a nursery to grow thousands of trees for commercial oil production, a grower must ensure the trees are grown from seed of high cineole parents.

To maintain commercial viability, it is essential to be able to mechanically harvest plantations and so planting in straight rows is preferable. For pest and weed control, trees should be spaced to allow machinery access and land should be no more than a gentle slope. Rows need to be ripped as deeply as practicable and just before planting the surface layer on both sides of the rip broken down to about 25cm to allow the use of planting machines. Once planted, the trees must be kept weed free for at least 12 months and protected from insect attack. To protect young seedlings from dehydration, watering at or immediately after planting is essential and must continue until the first effective rainfall.

Weeds, pests and diseases

Control of weeds during the first 12-18 months of early planting and regrowth phases is critical. If plantings are spaced sufficiently, machinery can be used to spray and slash for weed control. Herbicides are the most effective method for weed control with glyphosate being the standard practice prior to planting. Spraying established trees is more difficult as there are only limited products available for use on eucalypts. Grazing sheep is also another method used by some producers to manage weeds after the early stages of tree growth.

Livestock, feral pigs and kangaroos can cause damage in the early stages of tree growth and so young trees may require some protection to prevent animals gaining access to the trees.

The main insect pests of oil-producing species are sawflies and case moths which cause some limited damage during the establishment phase of trees. Insecticides are not commonly used on commercially grown oil-bearing eucalypts due to the risk that some components of the chemicals may remain in the oil.

Infrastructure Requirements

Plantation grown oil-bearing eucalypts are mechanically planted and harvested. The equipment required for planting and establishing young trees includes:

  • A powerful tractor or bulldozer with a ripper
  • A cultivator
  • A planting machine
  • Either an irrigation system or a water tanker with an appropriate water delivery and pump and motor filling systems.

The equipment required for harvesting and first-stage on-site processing is:

  • Harvesting machinery
  • Still suitable for steam distillation
  • Condenser
  • High density plastic drums for storage and transport.

Harvesting & Processing

The first harvest of oil-bearing species can be made 18-24 months after planting, and at 18-24 month intervals after that. Trees are cut off at the ground and then mulched in preparation for oil extraction through steam distillation. Trees regenerate from the stump and are ready for harvesting when they again reach 1-2 metres tall. Harvesting should not be done during drought.

Blue Mallee, or E. polybractea, is the only major oil producing species which is mechanically harvested. The Blue Mallee is cut by a harvester a few centimetres from the ground. The cut material is thrown up a chute directly into a mobile still which is towed behind. Once the mobile still is filled with about three tonnes of leaf, it is uncoupled and another still attached.   When two or three stills are filled a second tractor tows the stills to the distillery.

Eucalyptus oil is extracted by steam distillation as stipulated by national and international standards. The cost of transporting leaf is high so the initial steam distillation needs to be done close to the harvest area. Second stage processing, vacuum redistillation, is generally not carried out on-farm as the cost of apparatus is too high. The crude oil produced by steam distillation needs to be packed into suitable containers for transport to the refinery for further processing. It is important to note that eucalyptus oil is classified as a class 3 flammable liquid and depending on the stage of oil production there may be special handling regulations.

Risks & Regulations


The main production risk is adapting the specific eucalpytus species to the site to achieve suitable economic growth rates and long term sustainable production. It can be challenging to find agronomic, production, chemistry and marketing advice that is specific to each eucalypt species and of reliable quality.

Oil quality and buyer acceptance are issues when marketing and selling eucalyptus oil. Oil quality is dependent on the chemotype of the plant and so it is critical for viable returns that the trees selected are the chemotype for the correct oil quality. It is essential that a grower source trees of the correct chemotype. There are no Australian registered or assured supplier of commercial oil-producing eucalypts so growers must carefully manage sourcing trees of the correct chemotype.

Selection of plant material is critical as oil chemistry can vary significantly within a species. It is very important to consider the final oil chemistry that your plant selection will produce and ensure that this chemistry is indeed what the market demands. The market will be very specific in its requirements, and consistent high quality product is essential for this industry.

In addition to the risk of uncertainty around securing a buyer, different species of eucalyptus may prove challenging to market. Eucalyptus globulus is the main species for oil production worldwide as it is cheap and abundant. Even though Australian grown varieties such as E. polybractea produce a higher quality oil, buyers may need to be convinced, providing an additional marketing challenge.

Regulatory Considerations

Regulatory considerations depend on what phase of oil production is undertaken – producing crude oil or rectified oil.  Eucalyptus oil is classified as a class 3 flammable liquid and so handling, storage and transport must be undertaken according to these regulations. In producing crude eucalyptus oil the regulations of handling, storing and transporting a class 3 flammable liquid apply. However, production of rectified oil is subject to regulations governing establishing a processing facility and Workcover regulations for establishing and maintaining the storage and handling of dangerous goods.

For further information:

  • Visit the website of the National Transport Commission for more information on the Australian Dangerous Goods Code and transporting a class 3 flammable liquid. The assistance of a special dangerous goods consultant may also be needed to understand the implications and requirements of handling eucalyptus oil as a class 3 flammable liquid.
  • Contact your state and local government for regulatory information relevant to establishing a processing facility.



Eucalypt plantations Forest Products Commission, Western Australia

Image Gallery

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Eucalyptus albens (image courtesy of Australian National Botanic Gardens - photograph by I.G. Holliday)

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Eucalyptus oil plantation, regrowth after harvesting (image courtesy of Australian National Botanic Gardens - photograph by M. Fagg.)

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Eucalyptus polybractea (image courtesy of Australian National Botanic Gardens - photograph by Brooker & Kleinig)

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Eucalyptus polybractea (image courtesy of Australian National Botanic Gardens - photograph by M. Fagg)