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
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.