National biofuels consultation welcome – but Australia can’t wait until 2029

Welcoming the Federal Government’s newly released consultation paper on a national demand mechanism for low-carbon liquid fuels, Mr Galligan called it the most significant step forward in national policy on this issue in decades.  

However, he also has warned that Australia cannot wait until 2029 for action while overseas competitors race ahead.  

“Australia has talked about biofuels for decades and it is 5 years since the Federal Government released their first bioenergy roadmap, yet while we analyse and assess other countries have built industries,” Mr Galligan said.  

“The decision by the Federal Government to consult on the implementation of a demand-side policy to support a low-carbon liquid fuel sector is warmly welcomed. The direction is right, but the pace matters. Investment decisions are being made now and industry needs certainty now.”  

The consultation paper proposes an initial national volume requirement for cleaner fuels, potentially commencing in 2029, before a proposed transition to a carbon-intensity system from 2035.  

Importantly, it proposes covering petrol and recognises ethanol as an eligible fuel. However, imported cleaner fuels could also satisfy the requirement, with no guarantee that the resulting demand would support Australian production.  

“If we move too slowly or allow the massive new global demand for low-carbon liquid fuels to be satisfied largely through imports, Australian dollars will help fund factories, jobs and regional development overseas while available capacity here remains underused,” Mr Galligan said.  

“We should not replace our dependence on imported fossil fuels with a new dependence on imported cleaner fuels. That risks leaving Australian families, businesses and essential industries exposed again when the next global shock disrupts supplies and drives up prices.”  

More than 90% of the liquid fuels used in Australia are either imported directly or refined locally from imported crude. Yet Australia has abundant agricultural feedstocks, established regional processing capacity and growers ready to play their part.  

The government’s paper identifies 360 million litres of operational ethanol capacity in Australia. The sugar industry processes around 30 million tonnes of sugarcane in a typical year, and industry estimates suggest it could ultimately produce more than 2.5 billion litres of ethanol a year – equivalent to approximately 14% of Australia’s petrol needs.  

“We are not starting from scratch,” Mr Galligan said.  

“Australia already has the feedstock, infrastructure, expertise and production capacity to make more bioethanol today. We should use what we have now while building what we need next.  

“Sugarcane is a major renewable biomass resource. It can make an immediate contribution through ethanol, while its biomass can also support the development of advanced fuels such as sustainable aviation fuel and renewable diesel.  

“It can deliver real fuel security, real emissions reduction and real regional jobs – but that will not happen without clear policy settings that create demand for Australian-made fuels.”  

Mr Galligan said Australia must learn from the past and keep more of the value created from its agricultural resources in the country.  

“For too long, Australia has exported raw commodities only to import the higher-value products made from them. We cannot repeat that mistake with cleaner fuels,” he said.  

“We need a national framework that gives investors confidence to build here, produce here and create value here. Australia has the resources, the growers and the regional capacity. What we need now is the policy certainty to get on with it.”  

Mr Galligan and CANEGROWERS Chairman Owen Menkens are in Canberra this week briefing federal ministers and senior departmental officials on the opportunities biofuels offer Australian agriculture, regional communities and national fuel security.  

Mr Galligan will also join leaders from the sugar, manufacturing, bioenergy and national-security sectors for a media stand-up at the top of Federation Mall, Canberra, at 2.30pm on Thursday, 20 August.