The Australian Government has committed $1.1 billion to support the production of low carbon liquid fuels (LCLF) in Australia.
This investment will help ensure Australia has strong supply chains for the more sustainable fuels that can power our trucks, cargo ships and planes 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.
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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.
“Australia has the ingredients needed to make cleaner liquid alternatives to fossil fuels, with ready access to feedstocks like canola, sorghum, sugar and waste,” the government said in a statement.
“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 new production-linked incentive builds on the government’s support through the Sustainable Aviation Fuel Funding Initiative and the Future Made in Australia Innovation Fund. Recipients will also need to deliver benefits according to 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.
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.
“Developing this industry has potential to make us an indispensable part of growing global net zero supply chains.
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“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.
“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.”
