Australia’s Federal Government has announced a $1.1 billion Cleaner Fuels Program to help unlock the economic and industrial opportunities from lower carbon liquid fuels, as the nation transitions to clean energy and net zero carbon emissions.
It is hoped that the new ten-year program will stimulate private investment in Australian onshore production of lower carbo liquid fuels, such as renewable diesel and sustainable aviation fuel.
“This investment will help ensure we have strong supply chains for the more sustainable fuels that can power our trucks, cargo ships and planes into the future,” said the Hon Catherine King MP, Minister for Infrastructure, Transport, Regional Development and Local Government.
The first production of ‘drop-in’ cleaner fuels, which can be directly substituted for existing fuels and work in today’s engines, is estimated to take place by 2029, the Department of Infrastructure has said.
“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 our advanced farming practices and access to cheap and reliable renewable energy, 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. Liquid fuels make up around half of Australia’s national energy use. Replacing those fossil fuels with cleaner alternatives would deliver a massive climate and economic opportunity,” the Department said.
It added that Australia already exports nearly AUD$4 billion of feedstocks like canola and tallow, and that the Clean Energy Finance Corporation estimates that an Australian low carbon liquid fuel industry could be worth AUD$36 billion by 2050.
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 new production-linked incentive follows-on from the Federal Government’s support through the Sustainable Aviation Fuel Funding Initiative and the Future Made in Australia Innovation Fund. The Government is also expanding the Guarantee of Origin Scheme to include low carbon liquid fuels, and has established fuel quality standards for renewable diesel.
Australia’s Treasurer, the Hon Dr Jim Chalmers MP, commented: “Low carbon liquid fuels are an enormous economic opportunity for Australia. 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 down-payment 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. 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”.
Detailed design of the Cleaner Fuels Program will take place later this year through consultation with industry.
