Australia's wine industry is investigating a novel solution to its massive surplus: turning millions of liters of unsold wine into biofuel for cars, trucks, or even aircraft.
Industry leaders have confirmed that the oversupply—the majority of which is red wine—now stands at 263 million liters. Australian Grape and Wine chief executive Lee McLean stated that "exploring the economics, barriers, and opportunities of converting some of this wine into biofuel seems sensible given the current fuel situation."
Process and Expert Opinion
Ethanol would be extracted from the wine through distillation, potentially producing about 30 million liters of ethanol from the total surplus.
University of Adelaide plant science professor Rachel Burton noted that the ethanol in wine is not fundamentally different from that in standard petrol blends. "The difference is in purification; distillation is used to isolate bioethanol, similar to making spirits," she explained. Since the wine is already fermented, the ethanol is present—distillation simply involves applying heat to separate the alcohol. For the purpose of biofuels, taste is irrelevant.
Market Context
The scale of the problem is historic. McLean reported that global wine consumption in 2025 has dropped to levels last seen in 1961, when the world population was 40% of its current size.
The industry faces a significant oversupply of both wine and vineyard capacity. Grape prices in many areas are now roughly half the cost of production. Wine consultant Leon Deans stated that distillation could be a viable option to remove the oversupply, though it may require government support, as distillation costs could exceed ethanol revenue.
"Removing the oversupply would help the industry restructure," said wine consultant Leon Deans.
Deans estimated a need for about 15 cents per liter of wine to cover the cost gap, assuming value could be recovered from final products like pharmaceutical-grade alcohol or fuel-grade ethanol. He noted that China was seen as a major market 7-10 years ago, but that market has stabilized and is smaller than hoped. Over 20-25 years of supply-demand imbalance, many growers have sold water entitlements to survive, making exit from the industry difficult.