The federal government has announced it will invest $1.1 billion into producing cleaner fuel locally, including low carbon liquid fuels.
This investment will help ensure the nation’s transport industry has strong supply chains for the more sustainable fuels that can power our trucks into the future.
The new 10-year Cleaner Fuels Program will stimulate private investment in Australian onshore production of low carbon liquid fuels, such as renewable diesel and sustainable aviation fuel.
“Low carbon liquid fuels are an enormous economic opportunity for Australia,” federal treasurer Jim Chalmers says.
“It’s about making Australians and our economy big beneficiaries of the global net zero transformation.
“Developing this industry has potential to make us an indispensable part of growing global net zero supply chains. This is a downpayment on developing an entirely new industry in Australia.
“From the farm to the refinery, from primary production to processing, this will create more jobs and more opportunities for Australian workers and businesses.
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“It’s another way we’re helping Australians grasp the big benefits on offer in the transformation to cleaner and cheaper energy – to help lift wages, grow living standards, create jobs and grow our economy.”
The first production of ‘drop-in’ cleaner fuels, which can be directly substituted for existing fuels and work in today’s engines, is estimated by 2029.
The government says Australia has the ingredients needed to make cleaner liquid alternatives to fossil fuels, with ready access to feedstocks like canola, sorghum, sugar and waste.
Thanks to the nation’s advanced farming practices and access to cheap and reliable renewable energy, the federal government says Australia is in an enviable position to produce cleaner, low carbon liquid fuels that jets, ships, construction machines and heavy trucks need to reach net zero.
Australia already exports nearly $4 billion of suitable feedstocks like canola and tallow. But the Clean Energy Finance Corporation (CEFC) estimates an Australian low carbon liquid fuel industry could be worth $36 billion by 2050 – highlighting the untapped potential of developing local refining and value-adding capability.
Funding to make cleaner fuel on Australian shores, from Australian feedstock will help back Australian innovators from the farmer to the fuel bowser, make our fuel supply greener and more resilient and make low carbon fuels available for early adopters.
Details about eligibility will be considered through public consultation and design work to take place this financial year. Grants will be awarded through a competitive process.
The government is also supporting the market by expanding the Guarantee of Origin Scheme to include low carbon liquid fuels and has established a fuel quality standard for renewable diesel.
“As demand for air travel grows, and more goods are moved by road and rail, it’s essential we invest in future fuels that allow us to facilitate this increasing demand while meeting our net-zero targets,” federal acting transport and infrastructure minister Murray Watt says.
“Low carbon fuels have the potential to be a $36 billion industry here in Australia, and we have the opportunity to lead the way on the production of these new fuels.
“We have the renewable feedstocks, access to clean energy and a strong agriculture base, all of which will allow us to develop this new industry, create new jobs and power how Australians move for decades to come.”
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