A little patch of Mexico in the ground near Atherton, in Far North Queensland, is about to get much bigger.

Blue agave — which is the base ingredient for tequila — is currently grown on a commercial scale in Mexico, but Queensland's MSF Sugar is aiming to become a world industry leader, with plans to plant 4,000 hectares of the succulent on the Atherton Tablelands.

About 3,000 plants have been growing on unused land close to MSF Sugars' Tablelands mill since late 2017.

"At the moment we've got more tissue culture plants doing a nursery hardening stage," project agronomist Renee Smith said.

"So there's 45,000 in at the nursery at the moment and by the first rains in November we hope to have 50,000 plants in the ground."

Agronomist Renee Smith (R) and MSF business developer Hywel Cook at the blue agave trial site. ( ABC News: Courtney Wilson )

Unlike in Mexico, the spiky succulents are not being grown in Australia to produce tequila, but rather for a green energy initiative.

The agave plantations will form part of the milling company's biomass refinery project, which will operate alongside a $75 million green energy power plant expansion, due for completion later this year.

The mill currently burns bagasse, a by-product of sugar cane crushing, to power the mill, but the production and availability of bagasse is seasonal.

"At the moment we generate seven megawatts of power and we're going to generate 24 megawatts of power, so it's around four times as much power from the same amount of biomass," MSF Sugar's business development manager, Hywel Cook, said.

"Sugar cane is the most valuable part of what we have, but we needed something else.

"We came across agave and agave was really interesting for us because you could grow it on land which wasn't suitable for sugar cane.

"It didn't need irrigation, you got a huge amount of biomass from it, and you could also make ethanol from it, so you got two things from the one crop: fibre plus the ethanol."



Atherton growing conditions similar to those in Mexico

MSF plans to also burn the blue agave plant fibre to produce power and crucially, that could happen outside of cane crushing season, turning the mill into a year-round power generator.

"We've got facilities that we only use for half the year," Mr Cook said.

"The power station that we're putting in we'll only use for nine months of the year, so I'm looking for something to put in it for the other three months of the year which will then make it base load, green renewable electricity for the local community."

But it will take time to work out exactly how the agave and its different parts can be put to use commercially, as it takes about five years for a plant to reach maturity.

"We've chosen this plant because it's in a very similar position in Mexico, so the same distance away from the equator and the same elevation from the sea," Ms Smith said.

"We've chosen it for its drought-proof qualities so we're not going to irrigate it, it's going to be grown in quite rough country."

By the time the plants are ready for harvest, each blue agave can weigh up to 150 kilograms, and unlike in Mexico where they are only harvested for the juice in the stem, MSF Sugar plans to use the entire plant.

"We want to separate the useful parts of the agave plant. So we want to separate the fermentable juice, we want to separate the fibre and we want to separate the waxes as well because there's a high value product that's made from the waxes as well," Mr Cook said.

"So you start to make a factory, a large-scale factory which is worth half-a-billion dollars, which is making sugar, it's making electricity, it's making ethanol, it's making cattle feed, waxes, biodiesel, it makes a lot of interesting things."

What's in a name?

Much like champagne from Champagne, tequila from Tequila is a highly protected brand.

"We had a meeting with the tequila council," Mr Cook said.

"I presented to the tequila council what we were trying to achieve and explained what we were doing, which was not in competition to making tequila, but was actually making a biofuel and a bio-refinery out of the product.

"They were pleased with that."

Yuruga Nursery at Walkamin, in Far North Queensland, is where the next crop of blue agave is currently undergoing a "hardening" stage.

Nursery owner Dennis Howe said it was "certainly an interesting crop".

Mr Howe is well-known as one of the largest banana growers in Australia, but is no stranger to experimenting with different crops.

Banana grower Denis Howe is growing the blue agave at his nursery in Walkamin. ( ABC News: Courtney Wilson )

"I mean, we started off with peanuts. Times change, so unless you're prepared to change and investigate, you go backwards," he said.

"You've just got to be willing to try new crops and not get too tied to the crops you're growing at any one time."

Mr Howe's son James manages the nursery and is overseeing the growth of tens of thousands of baby blue agave sourced from Mexico and others that have been cloned from tissue culture in Australia.

Work is also underway to grow the plants themselves in-house. It is a destructive process as the original plant has to be sacrificed, but from just one blue agave they can make up to 800 plantlets.

"These have been growing in MSF's trial site for a few months now," James Howe said.

"From here we'll chop them up and we'll try and clone them in the tissue culture lab so we'll be able to mass produce our own out of these plants."

Once they have been planted and finished growing, the next big challenge will be how to harvest and process the notoriously spiky plants.

"In Mexico they do it all by hand. They chop the leaves off, they've got a machete type of implement and then they pick up the centre part of the plant and they put it all on the back of a donkey. So we're not going to be doing anything like that at all!"

Instead, the plan is to re-tool old cane harvesters to do the job.

It is hoped that might also encourage cane growers to consider adding agave to their crop rotations.

But the harvest and production process is still some time away. The trial crop will only be ready for harvest in 2022.