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Eucalyptus oil extraction in central Victoria, Australia

Eucalyptus oil production
Results of research studies

Sheila S. Mude
School of Forestry
University of Melbourne


In Australia, the reservation and protection of forests for wood production ensures the future of many of non-timber values such as recreation, catchment protection and non-wood forest products. But collection of non-wood forest products is highly opportunistic and is restricted to relatively small areas of forest where biophysical and socioeconomic factors make production viable.

Examples of non-wood forest products commercially exploited in Australia include eucalyptus leaf oil, tannins, sandalwood (Santalum spicatum) oil, tea tree (Melalueca alternifolia) oil, and species used in the medicinal plant industry. Research at the School of Forestry, University of Melbourne, and the School of Biological Sciences, University of Ballarat, has focussed on the oil extraction from the leaves of blue mallee (Eucalyptus polybractea) and green mallee (Eucalyptus viridis).

The genus Eucalyptus, which is native to Australia and some islands to the north, consists of over 600 species of trees. The planted eucalypts are used mainly for pulpwood, poles, fuelwood, charcoal and sawn timber. Less well known is the use of eucalypts for the production of non-wood forest products such as floral nectar for honey, bark for tannin and rutin and leaf oils for pharmaceutical and industrial purposes (Boland et al ., 1991).

The leaves of most species of eucalypts yield an essential oil which is known in the trade as eucalyptus oil. Over 300 species of eucalypts in Australia have been shown to contain volatile oil in their leaves, but only approximately 20 eucalyptus species are exploited commercially for oil production. The major species are blue mallee (Eucalyptus polybractea), green mallee (E. viridis), broad-leaved peppermint (E. dives) and narrow-leaved peppermint (E. radiata).

Eucalyptus oils are clear liquids with aromas characteristic of the particular species from which they are obtained. Like other essential oils, they are mixtures of organic compounds (mainly terpenes). The individual components of the organize compounds (and their proportions) determine the chemical and olfactory characteristics of the oil and, therefore, its value. The composition of the oil is dependent mainly on genetic rather than environmental factors. The species of eucalyptus from which the oil is obtained is, therefore, the most important factor determining its quality and use (Copper et al., 1991).

The eucalyptus oil industry in Australia once was an important cash generating rural industry and was able to supply the world market with substantial quantities of various types of high-grade oil. However, the cost of producing eucalyptus oil in Australia increased so much that it couldn't compete with overseas oil, and thus lost its leading position in the world market. The cheaper imports are largely by-products of large eucalyptus plantations overseas, grown for sawn timber and pulpwood. In these countries labour costs are low, hence the advantage. Currently, the leading producers are China, Portugal, Spain and Southern Africa, which includes Swaziland and South Africa. Australian oil production is about 150 tonnes per annum, which is less than -3 percent of the world market. The cost of Australian eucalyptus oil is about US$ 3 per kilo; the cost of imported oil is considerably lower (Paul Foreman, pers. comm.).

Currently, there are two main geographical areas where eucalyptus oil production is undertaken in Australia: 1) near West Wyalong, New South Wales; and 2) the St Arnaud-Inglewood-Wedderburn region of Central Victoria. The principal species used for commercial distillation of eucalyptus oil are blue mallee (Eucalyptus polybractea) and green mallee (Eucalyptus viridis). The natural occurrence of these species is limited to the central parts of Victoria.

Mallees are multi-stemmed from ground level and rarely exceed 10 meters in height when mature. Both blue and green mallees have the same growth habits, form large underground lignotubers, and are commercially worked on by the harvesting of coppice regrowth every two years. Even after nearly all their stems and leaves have been cut off, the underground lignotuber supports rapid regrowth. This tolerance of heavy cropping is ideal for harvesting the leaves for oil production. These species also have an advantage in that they produce their leaves in a shrub-like habit, making leaf collection easy (Bosisto. J. et al., 1952).

The eucalyptus oil industry in Victoria has not changed much since the 1950s. It is still a primitive business and no commercial plantations have been established. The oil is extracted by steam distillation in old, poorly insulated and inefficient equipment with virtually no control. Currently, there is not much revenue generated and the distillers have little incentive to improve their distillation methods and equipment. Many of the distillers extract eucalyptus oil because it is a family tradition.

The eucalyptus oil industry in Australia must improve its processing methods and research new value-added products to expand the market if it is to compete with imports. Some of the areas that could be addressed to revive eucalyptus oil production in Australia include:

· investigating the possibility of establishing clonal plantations from high yielding species;

· improving the efficiency of the steam distillation process by cohobation (the practice of returning the distilled water back to the vat for re-distillation) and incorporating it into the still design;

· investigating new market demands, diversifying the use of cineole (the active pharmaceutical ingredient) and identifying other useful chemicals from the oils;

· determining the most appropriate time for obtaining the best harvest, so as to achieve the highest percentage of cineole content and oil yield;

· developing alternative harvesting equipment which segregates the stem, bark and leaf; and

· identifying new products and markets for the stem, bark and leaf.

Eucalyptus oil production

Eucalyptus oil production in Victoria is undertaken in three main stages:

· plant harvesting;
· oil extraction;
· spent-leaf extraction.

Plant harvesting

Eucalyptus leaf destined for the commercial production of essential oil can be obtained by one of three methods:

· Recovery of "waste leaf' from felled trees which are grown primarily for their timber.

· Short-rotation harvesting of plantations managed specifically for oil production. Under such a system of coppicing, plants are allowed to grow for no more than about 20 months before cutting.

· Regular harvesting (coppicing) of natural stand (peculiar to Australia). The last method is used extensively in Victoria.

In Australia, a system of harvesting has been developed that has low labour intensity: mechanical harvesting using a "forage harvester." The blue and green mallee species are ideally suited to mechanised harvesting as they coppice freely after repeated cutting. The natural stands in Central Victoria have been repeatedly harvested for over 100 years on a two-year rotation basis. It is claimed that there is no apparent loss of vigour or reduction in oil yield over time. However, this practice may eventually cause problems due to the death of stumps during harvesting and lack of seedling replacement.

During mechanical harvesting, the plant is harvested by a "forage harvester" which is towed by a tractor. The harvester has a series of rotating "hammers" with cutting edges that slice through the plants at ground level. The cutting height of the forage harvester is set so that the hammers do not thrash or damage the ligno-tubers or pick Up all ground-level litter. The chopped pieces are blown Up through a chute, into a separate rectangular box-shaped "bin" trailing behind. When the bin is full, the leaves are tipped over at a collection site and are later collected by the loader. The loader feeds the harvested leaves into a mobile vat and they are then transported to the distillery. The mobile vat serves both as a means of transport and a distillation vessel.

Oil distillation

The eucalyptus oil distilleries of Central Victoria are basically the same and each has the following components: steam supply, distilling vat(s), connecting piping, a condenser, and an oil-collecting vessel. In most of the stills the distilling equipment is antiquated and no updating of this equipment is evident.

At the distillery, the vat containing the harvested leaf is positioned Underneath a removable flat lid which can be lifted completely clear of the mobile vat for ease in loading and unloading the leaf material.

Three evenly-spaced pipes, running longitudinally along the floor of the vat, allow steam to be fed through a flexible steam line at the bottom of the vat. The steam line is fed by a spent-leaf fired external boiler. The lid is lowered on to the vat and tightly secured using locking clamps, and steam is injected. One charge consists of approximately 8 tonnes of green, uncompressed leaves. Distillation begins when the vat is full of leaves and the steam then passes through the charge and the oil is vaporised. The vat has a drain at the bottom which allows for the removal of the residual black liquor which consists mainly of tannins.

There are three outlets for the vapour and these are connected to one central duct in the centre of the lid, allowing for the discharge of the oil/water vapours during distillation. The condenser consists of a length of pipe running from the vat to a pond. The condensate is cooled and the condensed liquid flows into the oil collection vessel.

The oil collection vessel is the device for collecting the condensed distillate and allows the separation of the oil from the water. This consists of an open drum partly embedded in the ground. Since the oil is largely insoluble in water, it separates and is scooped off the surface. The distillation process Usually takes 3-4 hours and a typical distillery can distill three vat loads per day. The oil is then put into 44-gallon drums and sold in crude form for approximately US$3 per kilo (Paul Foreman, pers. comm., 1994). No further processing of the oil is undertaken on site.

Further refining of the oil is done in Melbourne. This is done by rectification. Rectification is a more controlled distillation process which is used either to upgrade the oil or to isolate the major components of the oil. The chemicals are then used as precursors for chemical reactions or may be used as discrete aroma chemicals. For cineole-rich eucalyptus oil, rectification is employed to increase its market acceptance. Cineole can also be isolated by rectification and this is more expensive than basic oil and it is mainly used in high quality products (Boland et al., 1991).

Spent-leaf disposal

The spent leaves remaining after distillation is deposited in a vacant plot adjacent to the distillery. By tipping the vat over, the wholemass slides out and is left to dry in the sun. Some of the dried leaves are then used to fuel the boiler for steam generation, and the rest is sold to parks and gardens for use as mulch.

Steam distillation of harvested eucalyptus leaf is the only commercial method of extracting the oil in Australia. Other potential methods could include solvent extraction. Conventional techniques based on steam distillation have been shown to have serious shortcomings when compared with solvent extraction procedures. Ammon et al., (1985) found that there is a 30-35 percent loss of terpenes in steam distillation of fresh E. leucoxylon, E. globulus and E. plenissima leaves of the same age when compared with solvent extraction.

Results of research studies

In Victoria, the current practice has been to harvest the blue and green mallee plants together. Current research has illustrated that the oils from the two plants have different chemical constituents and different oil yields. In both the blue and green mallee, 1,8-cineole was positively identified as the chemical component in the largest proportion. The average percentage cineole yield for the blue and green mallee was 2.4 percent (wetweight basis) and 1.0 percent respectively, with blue mallee having a cineole content of 91.3 percent and the green mallee having 63.6 percent. Other components identified in both blue and green mallee, but in smaller proportions, were limonene, r-cymene, terpinen-4-ol, cuminal (cuminyl aldehyde) and a-pinene. Viridiflorene was present in green mallee but not in blue mallee.

There appears to be a seasonal variation in the concentration of cineole in the two species. There is a general decrease in the percentage of cineole in the oils of blue and green mallee during the winter months. Experiments are still underway to characterise seasonal variation.

During sampling it was observed that some plants growing within the mixed stands of the blue and green mallee had different leaf characteristics. The leaves had the shape and size of the blue mallee but not the distinct blue or green-gray colour of the blue mallee. Instead, they were dark green in colour like the green mallee. This could be attributed to crossbreeding between the blue and green mallee, resulting in a hybrid. It has not been possible to get botanical classifications because there has not been any fruit, seed, bud or flower available for proper identification.

Leaf analyses indicate that the percentage of cineole from ethanol extraction of the "hybrid" is higher than from the green mallee and lower than from the blue mallee. The average oil yield based on the wet weight for the green mallee, blue mallee and the "hybrid" is 1.60 percent, 1.89 percent and 1.86 percent respectively. There is a significant difference at the 5 percent level between the oil yields of the blue mallee and the green mallee and between the green mallee and the "hybrid." There is no significant difference at the 5 percent level between the blue mallee and the "hybrid." Chemotaxonomy supports the hybrid hypothesis, and qualitative analysis illustrates that there are chemical compounds present in the "hybrid" that are found in both the blue mallee and the green mallee.

Yield analyses indicate that cohobation, the process of returning the condensed water (minus the separated oil) to the still for redistillation, can improve the quantity and quality of the extracted oil. The condensed water will be saturated with the oil being distilled and if this water is discarded, there will be some loss of oil. For the blue mallee, green mallee and "hybrid" there was a 34.9 percent, 70.9 percent and 54.8 percent increase, respectively, in the oil yield when steam distillation with cohobation was carried out.


The eucalyptus oil industry in Victoria is constrained by a lack of product diversity. There is no separation of leaves, bark or stem. Whole plants are harvested and subject to distillation, even though the oil is effectively restricted to the leaves. Other products are potentially available from the bark and stem, but there is a lack of research to identify potential products or uses. The exploitation of only one product will inevitably result in the instability of an industry that suffers from fluctuating prices of what is essentially a low-commodity oil.

Potential products have been identified from other eucalyptus species. This includes a livercuring compound (2 alpha hydroxyursolic acid) isolated from acetone extraction from spent leaves. Leaf extracts from Eucalyptus globulus have recently been identified as a suitable nematicide (worm treatment) for livestock (National Forests and Timber, 1994). Bark extracts are used as tribal medicines. Tannins have a variety of uses as scavengers for heavy metals, glue manufacture and leather curing. The tannins of some species are reported to have potential as mudblock stabilisers to improve surface hardness and water repellency, (mud is gaining in popularity as a building material in Australia).

Spent eucalyptus leaves are very effective for mulching and reducing weeds. In forest areas where spent leaves are left for drying, the soil is left devoid of vegetation for some time after the leaves have been removed. This may indicate the presence of a natural weedicide in the leaves after oil extraction. The identification of other products from "whole tree utilisation" would go a long way towards stabilising a vulnerable, but potentially valuable, rural industry.

Blue mallee has been shown to have a much higher oil and cineole content than green mallee. However, propagation and utilisation practices have failed to enhance the potential oil yield. The variability in oil yield between plants indicates potential for genetic selection for higher oil yielding plants.

Yield studies also indicate that simple practices like cohobation can be used to increase oil production. However, the eucalyptus oil industry in Victoria has reached a senescent phase. Failures in research, innovation and technology transfer will witness the demise of a potentially valuable rural industry.

Effective research, innovation, and technology transfer are needed if the demise of a potentially valuable rural industry for Central Victoria is to be averted.


Ammon, D.G., and D.A. Clarke, and J. Tjandra. 1985. Rapid and accurate determination of terpenes in the leaves of Eucalyptus species. Analyst 110: 921-924.

Boland, D.J., J.J. Brophy, and A.P.N. House. 1991. Eucalyptus leaf oil: use, chemistry, distillation and marketing. ACIAR. Canberra, Australia.

Bosisto, J. and Co. Pty. Ltd. 1952. A century of gum leaves.

Coppen, J.J.W., and G.A. Hone. 1992. Eucalyptus oils: a review of production and markets. Natural Resources Institute Bulletin 56.

National Forests and Timber. l 994. Eucalypt product may be worm breakthrough. National Forests and Timber 5(4): 18.

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