Australian farmers could soon be growing mallee eucalypts as a source of alternative energy, thanks to the development of a specialised mallee harvester recognised Thursday in Australia's 2013 Awards for Excellence in Innovation.

Oil mallees are genetically-improved native eucalypts, originally planted on Australian farms to help manage water and salinity levels, promote biodiversity and control erosion.

In 2005 electricity producer Verve Energy determined that mallee biomass could commercially generate electricity. However, to be cost-effective, producers required a machine capable of harvesting at least 20 tonnes of oil mallee biomass per hour.

The Future Farm Industries Cooperative Research Centre, in partnership with Biosystems Engineering, developed a mallee harvester over several years, which was Thursday recognised for sexcellence in innovation.

The odd shape and size of the oil mallee required a more robust harvester than existing forage machines, yet lighter and more efficient than conventional forestry equipment.

CRC says this harvester has been crucial in catalysing a sustainable biofuels industry. The IP has now been sold to Biosystems Engineering for production and further development.

"The mallee harvester project has confronted a number of challenges over a 15-year period, and the result truly reflects the innovative research, design and skills of all involved," said CRC Chief Executive Officer Peter Zurzolo.

"I'm sure many others would have given up where they continued to find solutions. Their perseverance has paid off, and the CRC was pleased to sell the IP to Biosystems Engineering last year to progress this remarkable machinery," he added.

The development of the mallee harvester is the next step to firing up the nation's oil mallee industry, according to Future Farm Industries CRC CEO Kevin Goss.

"Mallee trees have now gained recognition as a cheap and clean energy resource, that regrow after harvesting, for electricity production and more recently as carbon sinks," said Goss.

"Interest in mallees is expected to increase as farmers continue to look for new income sources in a drying climate -- particularly incomes that have complementary on-farm environmental benefits," he added.

Future Farm Industries CRC Commercial Director Mark Stickells said that several uses for oil mallee products had been identified.

"The oil mallee is proving to be a versatile plant with a number of promising market options such as activated carbon, oil feedstock and as a component in Medium Density Fibreboard (MDF).

"There also has been research into using oil mallees as a renewable energy source. They could also play a role in a carbon trading scheme," Stickells said.

Stickells added there needs to be significantly more oil mallees planted on a large scale to ensure the viability of a future industry.