Answer: The University of California did a study a few years ago with different mulches including one made with eucalpytus, because there were so many anecdotal stories about it. They found that the eucalyptus was not detrimental to another plant's ability to grow. They used all the same type of plants, with no mulch, and several different types of mulch, and the plants with the eucalyptus mulch had some of the best growth rates. I don't know about the odor after composting--that wasn't part of their study!
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