Fresh off their declaration to be a net-zero carbon emissions business before 2050, oil and gas company Carnarvon Petroleum (ASX: CVN) has committed $2.6 million into a joint venture project aiming to produce renewable diesel and other sustainable products, including graphene.

The fund will secure a 50% equity stake in the venue in partnership with Frontier Impact Group (FIG) which has been progressing a biorefinery business, a process of producing multiple sustainable products from biomass or other biogenic feedstocks. Current methods of biorefinery can only produce biodiesel once blended with petroleum-derived diesel, however FIG’s process is a direct substitute for the petroleum-derived diesel.

This method therefore produces renewable diesel by processing feedstocks that would otherwise be destined for landfill.

The venture further offers Carnarvon with exposure to the renewables space beyond their core oil and gas business where their Dorado oil project recently entered the formal development engineering and design phase with production scheduled for 2025.

“This opportunity underpins our core business endeavours, most particularly around funding Dorado, whilst enhancing our portfolio exposure to oil price linked products and for the future, building a value focused position in the renewables sector of the energy industry,” said Carnarvon Managing Director, Adrian Cook.

“This joint venture demonstrates a clear and pragmatic start to delivering on our net-zero commitment, while ensuring long-term, sustainable shareholder value remains a key determinant in our decision making.

“We believe this opportunity makes strong business sense for Carnarvon. There is a clear link between the delivery of our core projects, securing carbon offsets for these through this venture and producing valuable products such as renewable diesel.”

While the joint venture secures a pathway towards their future reduction of emissions, the venture will proceed under FIG’s guidance for the time being, assisted by Carnarvon’s $2.6m. Also located in Western Australia, FIG’s biorefinery is targeting production of renewable diesel for late-2022. Although diesel will be its primary output, there will also be opportunities for the high-grade biochar to be further refined onto graphene which would further reduce wastage while producing additional sales for the venture partners.

Graphene is actively being researched around the world for its many next-generation applications such as aerospace, electronics, batteries and material composites.

The technology being applied to the venture’s biomass refinery has been hugely successful overseas as a means to process lignocellulosic biomass as a feedstock and produce renewable diesel, high-quality biochar and wood vinegar. Carnavon and FIG’s implementation, however, would be the first time it will be applied in Australia.