Australia investing $1.1bn in clean fuel production
The Albanese Government is investing USD$735m to boost low carbon liquid fuel production in Australia.
The new ten-year Cleaner Fuels Program will aim to accelerate private investment in Australian onshore production of low carbon liquid fuels, such as renewable diesel and sustainable aviation fuel (SAF).
The first production of ‘drop-in’ cleaner fuels is estimated by 2029. Australia has access to feedstocks like canola, sorghum, sugar and waste, according a government press release.
Australian treasurer Jim Chalmers said: “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.”
Liquid fuels make up around half of Australia’s national energy use. The country already exports nearly $4bn of suitable feedstocks like canola and tallow per year, but the Clean Energy Finance Corporation (CEFC) estimates a domestic low carbon liquid fuel industry could be worth $36bn by 2050.
Minister for Climate Change and Energy Chris Bowen said: “Across the nation we have 2bn litres worth of projects in the pipeline, many of which are ready to scale up production. A new thriving domestic industry with more jobs in our regions, from farmers growing the inputs to workers refining the fuels of the future is within our reach.
“$1.1bn [Australian dollars] for low carbon liquid fuels production here in Australia builds on the $250 million we have already allocated to low carbon liquid fuels research and development through the Future Made in Australia Innovation Fund,” added Bowen.
Eligibility for funding 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 builds on government support through the Sustainable Aviation Fuel Funding Initiative and the Future Made in Australia Innovation Fund. Recipients will also need to deliver benefits as per the community benefit principles under the Future Made in Australia Act.
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.
A recent report from the CEFC found that a mature Australian low carbon liquid fuels industry could deliver around 230 million tonnes CO2-e in cumulative emissions reduction by 2050. This is equivalent to 2.3 times Australia’s current annual transport emissions.